This includes the primary transaction process around proposals, invoices, payment, and so on. The second is the complimentary knowledge flow that goes along with that. This can be the exchange of strategic information with a partner, the exchange of collaborative knowledge with a customer, and so on. This flow of knowledge doesn't generally get incorporated into the traditional value chain. The third is the flow of value.
Value is the benefit that goes beyond actual service.
An Internet service provider might provide you with online access, but what it's really trying to provide is a sense of community. In exchange, it's trying to get not just a monthly service fee, but also customer loyalty. The service fee is part of the traditional value chain. The customer loyalty is the value flow. The goal of thinking in terms of intellectual capital and knowledge management is to understand and legitimize these value exchanges that have been invisible because they don't appear on the balance sheet.