Tuesday, 24 November 2009

The Shape of Business - Drivers for Smart Ecosystems

A report this week from the Confederation of British Industry (CBI) entitled The Shape of Business – The Next 10 Years provides some useful insight into emerging business drivers that reinforce our concepts of smart ecosystems.

Taking at some of the key headlines in the report, you can see the increasing need for organisations to develop ecosystems, and adding smart behaviour.

Movement to a more collaborative business model. The recession has made businesses much more aware of the complexities and interdependencies in their operations, their financing, supply chains and customers, but they are still not able to fully assess or capture these in their business planning. To gain greater control of these uncertainties, businesses will seek to ‘simplify’ their operations and will enter into more partnerships and joint ventures. In particular, this will be important for businesses moving to a ‘core plus periphery’ model

= a need to develop ecosystems
= the need for a smarter supply chain, hence smart ecosystem. Though supply chain optimization is hardly new, the emphasis on this is clearly going to grow. There are also additional ways of thinking about the supply chain – e.g. as a source of finance, not just ‘goods’. i.e. don’t invest in stock, and certainly don’t lend money to buy stock, but rely more on the support of participants in the supply chain and on its optimisation to lower inventory and provide 'just in time' fulfilment.

Rationalization to the Core. The recession accelerated the need to address inefficiencies and non-core activities across the enterprise. It has also provided the stimulus for companies to re-think themselves and re-evaluate their future.

= a need for greater collaboration across an ecosystem consisting of an internal core and an external periphery (what Moore might term context)

Technology will enable new ways of working. Businesses will increase their use of social networking techniques to solve problems – many more companies will use Facebook, Twitter and other web 2.0 developments

= making sense out of what is going on in complex social networks is going to require a lot of ‘smart’. It isn’t going to save money if it requires an army of people to monitor and participate in social networks

There were also some interesting comments that identify the need for agility.

For example, there is a current trend of “localism” in some organisations or industry sectors, relocating certain supply chain activities back to the UK. What is evident is that the decisions about what should be done locally or globally, or what should be in-house or outsourced, will be fluid. It is not a one-off decision but one of constant re-evaluation in the face of prevailing conditions. Equally, large organisations may find that the decision varies across different product lines, with ‘no one size fits all’ solution. As such, organisations will need to be very agile if they are to quickly capitalise on changes in those conditions.

Or course it is very difficult to predict what will happen across the next 10 years. How many predicted the current situation a decade ago?

And there is of course the need to survive 2012 first!

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