Mobility Breaking the Tightly Integrated Corporate Value Chain

Enterprises like control. They like superintendence over as much of the value chain as possible. The rationale behind this behavior is that they want to control the quality of the product. Remember how Henry Ford built huge factories in Detroit, MI, to exercise control over the Ford ancillary industries. That is a fairly standard corporate tactic. In order to save the communication costs and exercise authority, they try to keep as many components of the value chain co-located as feasible. However, the new wave of technology is changing all that. Let us see how.

The primary factors responsible for the trend of  “Keep your support structure close” were –

The cost of communication was high

The workforce and the data they used had to be kept close

The core enterprise had to own the cooperation and co-ordination between different teams to keep the cost down and ensure quality

Corporate data and information needed to be kept secure and protected from exposure

Due to these factors, the organizations were forced to maintain a ‘tightly coupled’ ecosystem. This model percolated into the industry, and for over a hundred years, enterprises, irrespective of their field of endeavor, aligned themselves to it. However, in the context of the modern technology fundamentals, this model is not just obsolete, it is actually detrimental to the businesses in many scenarios. The Social, Mobile, Analytics and Cloud (SMAC) incursion into the business domain has introduced enough entropy into the ecosystem model, that the tight coupling is now shattered.

That does not mean that the ‘value’ of the value system has diminished. If anything, it has gone up. Instead of a chain of closely integrated support functions, we now have a network of loosely coupled, value centric, interconnected nodes, which function independently, and collaborate to create great products and services. To understand how this was made possible, we have to understand how the 4 key factors have been overcome with the modernization of technology.

1. Social – Democratization of knowledge creation and management: Knowledge is no longer proprietary to individuals. The social initiatives within enterprise are focused on making the organization as a whole ‘intelligent’. Collapsing the silos of knowledge into a single corporate knowledge-sharing platform ensures that when people leave an organization, their knowledge stays back. The next level of knowledge collaboration is the various communities like developer and partner extranets that the organizations have created to crowdsource intelligence.

2. Mobile – Surpassing the separation: Mobility has effectively turned the world into a global community. Distances do not matter anymore. Telecommuting is a reality. Distributed teams are as and even more effective, than the co-located teams. People do not need to be chained to their desks in order to be productive. They can participate in the furtherance of the corporate agenda while on the go. This also helps them strike a better work – life balance. The best part is, for the most part, there is no additional cost of giving people this freedom. Skype video calls are free!

3. Analytics – Unlocking the power in the data:  Advanced data models and analytics allow a much better understanding and interpretation of data than was even imaginable a decade ago. The advent of big data into the mix has transformed the way business activities like marketing and CRM are conducted. Now distributed teams can enjoy the access to data interpretation, and participate in planning and management activities. The data and users can be geographically separated.

4. Cloud – Virtualizing the datacenter: From search to mail to document storage to compute, all the standard corporate IT functions are available through a remote (and universally accessible) interface today. The best thing about cloud is that despite all the concerns to the opposite, the cloud is very secure, if you invest in the right platform.