Henry Ford is often thought of as the father of the assembly line, when actually the assembly line existed years before this legendary innovator first put it to use. What Ford did do, however, was apply the assembly line to drive a new business model mass production. Ford defined a new set of business processes and management practices to leverage this new technology; and, as a result, he created a new and better way of doing business. In this sense, the new technology (i.e., the assembly line) did not simply enable improvements in an existing business model, it served as the catalyst for an entirely new one.
This is the opportunity and threat which is presented by the Internet. The Web is a technology which is available to everyone and, therefore, in itself offers no competitive advantage. However, those companies which can transform around the Internet to create a new business model will surely be the superior performers.
Figure 1 represents a framework for operating in the new economy. It depicts four key dimensions in which businesses must excel to attain and sustain superior performance. To support this model, leading companies are just beginning to look differently at an existing asset base corporate data. Data is fast becoming the currency of the Web. Businesses will manage by it, measure with it and personalize through it. Let's use this framework as a reference point to examine the corresponding demands for data-related and decision support technologies in transforming organizations for success in the e-conomy.
Figure 1: E-conomy Operating Model
Organizations must quickly move to adopt a model which optimizes all the interaction points between employees, departments, business units and trading partners. Unfortunately, today most companies can no more synchronize across functional silos than they can up and down their supply chain. That's standalone. Being networked means that your customer, your enterprise, your supplier and your employees are all linked simultaneously. When a customer clicks in and executes a transaction, it's about the supplier knowing that there is inventory space to fill, the employee knowing there's a customer relationship to manage and the fulfillment center knowing there's a delivery to schedule. Transforming to a networked model demands that the business strategy, key initiatives and performance outcomes of the organization are accessible globally and online. When this happens, clarity of vision and communication of the strategy and operations results are assured. This rigorous information management must extend outside the organization. Fully leveraging data within this new business model will allow the winners to rapidly evolve from Internet commerce to inter-enterprise commerce.
Soundness and clarity of vision are important, but the ability to execute is what is rewarded by today's markets. Many organizations have moved from a variable platform by designing consistency of quality, delivery and schedule into operations. ERP systems have brought standardized and integrated processes to hundreds of businesses, resulting in stable operations. But the new framework demands scalability in how an organization performs. Scalable means overnight, 50 percent volume swings can be handled, and we're seeing this with Internet commerce. Being scalable means delivering breakthrough products in a matter of weeks to beat the competition. To enable scalability, decisioning environments must provide information delivery channels which lead the organization's performance and anticipate directional shifts. Proof of performance and accountabilities through visual alignment must bond the company together and ensure a subtle shift in one part of the enterprise is immediately recognized and accommodated in other parts.
A company's offer to its customer is essentially its value proposition. Why should someone do business with them versus the next store (or Web site). Today, the offer extended by many is an array of separate and disparate events. Though product bundling is becoming more prevalent, these packages often simply represent a "shrink wrap" of multiple products together with limited flexibility for the customer. Blurred offerings combine the tangible product, the service and the environment into a distinct experience which the customer selects. Supporting blurred offers requires an information management capability which enhances dynamic collaboration inside the enterprise and beyond. Each transaction with a customer or supplier must be treated as an event, which is orchestrated uniformly within the enterprise and also from enterprise to enterprise. Product configurations, promotions, pricing, service options and logistics are not constrained in this model by what the individual organization can deliver but, rather, are expanded to the collective capability of the company's sphere of trading partners. Robust information exchanges from each member of the trading community will enable this.
Speed in this framework is not about DSL bandwidth, but about speed of operations and decision making. It's about moving key business horizons from months to weeks to days and even hours. This demands the ability for real-time review of the strategy, business unit and personal objectives, and performance outcomes. It also requires management decision cycles to be compressed which is possible through access to timely, relevant and fact-based information.
Internet technology is driving change, not just enabling it. Organizations are being forced to adopt a new operating model, and this model is fundamentally predicated on a core competency in managing information. Look to implement new capabilities within this context to assist your organization in making the transformation.
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