Technology-based initiatives have long enabled business organizations to coordinate activities with their business partners. For instance, many companies share their forecasts and plans with suppliers and distributors to extract networkwide efficiencies. Other companies, such as retailers, let their suppliers decide when and how much stock to replenish so they can pursue greater efficiencies for all concerned.
Although efficiencies can be extracted by coordinating activities across a business network, such processes can’t sense and respond to unforeseen events. Simply put, such business networks improve performance in a predictable environment, but they provide, at best, a false sense of security under rapidly changing conditions.
Agility requires the dynamic configuration of processes across a business network. This reality is driving a shift toward real-time business networks, which require five key enablers:
1. Processes that support changes in customer requirements: Agility requires customer needs to be sensed and interpreted so they can be negotiated and translated into production and distribution specifications across the business network.
2. The enablement of business network intelligence: Business network intelligence requires disparate information to be first aggregated and then filtered and distributed to where it’s needed. Companies must set up processes not only to share information between two partners, but also to aggregate information across the entire business network and create intelligence for agile behavior. This requires effective decision-making and governance arrangements.
3. Creating agility in business partner relationships: Agile partnering requires companies to initiate, reconfigure or sever ties with others as business conditions and customer requirements change. Both core and noncore activities can be distributed across partners, but the nature of the partnership—as well as service level, responsiveness and cost requirements—must shape the processes needed to drive changes in partner relationships.
4. Allocating and coordinating dynamic business
network activity: Distributing activities for real-time
configuration of products and services requires visibility into contracted resources and capacities, and the service levels at which these activities need to be completed.
5. Achieving and supporting business network service management: This requires a clear definition of outcomes and the approaches needed to achieve them, as well as
metrics and learning for continuous improvement. Governance, contracts and service-level agreements must directly support the defined business outcomes.
Fredric Fishman is senior vice president of solutions and services at BTM Corporation. BTM Corporation innovates new business models and enhances financial performance by converging business and technology with its products and intellectual property.
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