Creating Business Agility

How Convergence of Cloud, Social, Mobile, Video, and Big Data Enables Competitive Advantage

Rodney Heisterberg, Alakh Verma

• Publisher: Wiley
• Year: 2014
• Print ISBN: 9781118724569
• eBook ISBN: 9781118869451
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Creating Business Agility: How Convergence of Cloud, Social, Mobile, Video, and Big Data Enables Competitive Advantage provides a game plan for integrating technology to build a smarter, more customer-centric business. Using a series of case studies as examples throughout, the book describes the agility that comes from collaborative commerce, and provides key decision makers the implementation roadmap they need to build a successful business ecosystem. The focus is on Business Agility Readiness in terms of the five major changes affecting the information technology landscape, and how data-driven delivery platforms and decision-making processes are being reinvented using digital relationships with a social business model as the consumer world of technology drives innovation and collaboration.

Cloud computing, social media, next-gen mobility, streaming video, and big data with predictive analytics are major forces now for a competitive advantage, and Creating Business Agility provides leaders with a roadmap for readiness. Business leaders tasked with innovation and strategy will find that Creating Business Agility provides important insight from an informed perspective.

Chapter 1
Bridging the Digital Divide

The world of business is changing more broadly, deeply, and rapidly than ever before. As the global marketplace has been flattened by the Internet, the leading industrialized nations are being challenged by the developing economies led by the BRIC countries of Brazil, Russia, India, and China. Today there is no company that is big enough, strong enough, rich enough, or smart enough to lead any market without partners.

As a result of this tectonic shift in their competitive space, market leaders have digitized their business relationships with trading partners to keep up with their ever-changing world in the increasing pace of Internet time. In this manner, these customer-centric digital businesses, which vary in size and scale, product type, as well as market reach, have created digital value chains as virtual enterprises with compatible core competencies in order to compete in their business ecosystems. The foundation of these thoughts has been long established. Marshall McLuhan observed when writing his 1967 classic The Medium Is the Message that “Any technology gradually creates a totally new human environment.”

Business Agility Concepts

Business agility is defined here as innovation via collaboration to be able to anticipate challenges and opportunities before they occur. Accordingly, a gap analysis methodology can be used to evaluate the business agility readiness (BAR) needed to implement successfully an information management system of customer engagement for creating the business agility that produces the culture needed to enable a sustainable competitive advantage.

The recognition of the business value of business agility is not new. It was articulated several decades ago as “management productivity”—timelier decisions with greater insight and impact on business performance. This was as a result of implementing corporate management information systems with an integrated database enabling real-time decision support systems (Heisterberg 1985). Such a computer data-driven “silicon crystal ball” capability creates a culture of adaptive decision-making processes. With the advent of commercial Internet technology, this internal agility evolved as a competitive advantage with ubiquitous corporate intranet deployments.

In order to see the future of business agility that lies ahead, it's useful to look back 20 years across the previous generation of revolutionary business practices, in which innovation has resulted in continuous decision process reengineering (Heisterberg 2001):

• Electronic commerce (e-commerce) along the “information superhighway”
• E-business in the dot-com era
• Collaborative commerce (c-commerce) by virtual enterprises as value chains at the turn of the twenty-first century
• Social business evolution of Web 2.0 over the past decade
• Business ecosystems as the twenty-first-century business model for competition within and between industry markets

Even as these stages have progressed for more than two decades, the enabling technologies have changed more quickly. Information technology (IT) evolution has been measured in terms of Internet time as a set of next-generation hardware, software, and network system technologies that are continually deployed in faster enterprise implementation cycles.

This technology evolution has produced the ability to monetize innovative ideas. During the same period strategic business management theories, principles, and practices have evolved with the development of “customer value” as a framework for organizing resource allocation decision making. The associated abstract concept of Intellectual Capital for measuring the creation and delivery of customer value expressed as intangible assets has become a core element of today's customer-centric business models. As illustrated in Figure 1.1, this new rule of competitive advantage has become the driver for digital business in a knowledge-based marketspace.

Figure 1.1 Intellectual Capital Business Model of Innovation Monetization

Digital Business Organization

Ubiquitous Internet connectivity has created a data-rich business environment. Access to information at any time, in any place, and in any way is now expected as a routine practice that provides a digital “state of presence” that drives personal experience delivery as the new normal of customer relationships. As their customers become increasingly connected to their suppliers and distributors via the Internet, businesses need to develop strategies and organizational structures that reflect this dependency on their digital ecosystems of trading partners. Such a new digital business has both physical and virtual relationships that must be managed for successful execution of that strategy.

Businesses today are now reliant on these trading partners to be able to deliver a whole product with an experience that matches their customer expectations. This expression of the customer-centric value proposition in terms of the bundle of tangible goods and intangible services as a whole product provides insights into the necessary structure of a market-leading organization. A winning digital business strategy requires collaboration with trading partners that have compatible core competencies for developing and delivering a whole product. The organizational structure that is formed by a set of digital businesses around a whole product value chain is called a virtual enterprise. Likewise, coevolution of the collection of virtual enterprises collaborating to grow a rich business environment for their mutual benefit while competing to lead their market space is known as a business ecosystem. For example, Apple and Google as digital businesses with their respective virtual enterprises of iOS and Android whole products compete to lead their tablet business ecosystem while collaborating in order to build it more strongly as a vibrant competitor against the personal computer business ecosystem.

The basis of business competition has also evolved from product-centered financial assets to customer-centered information assets. This business model paradigm shift has moved away from “past is prelude” thinking characterized by business-as-usual planning. With this traditional practice, extrapolation of strategy plans was based on assumptions that the future will continue like the past using historical time-series sales forecasting and static regression analysis models. Now best practices lead to outside-the-box thinking. This is reflected by scenario-based planning that anticipates change via adaptive sense-and-respond business intelligence processes, real-time customer-facing decision support, and dynamic prescriptive analytic models. The growing criticality of digital customer relationship channels that augment conventional physical customer relationships and the inexorable progression of digital relationship management as a core competency are now fundamental enablers of agility for digital business success.

Business Ecosystem Strategic Concepts

This approach builds on the work of James F. Moore in The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems by identifying and defining the business ecosystem as a strategic interenterprise organizational paradigm (Moore 1996). He describes the linking of synergistic core competencies in terms of four stages of strategic business coevolution. This process dynamically strengthens the ecosystem as a whole through an iterative cycle of collaboration and competition. These concepts of coevolution will be explored and elaborated throughout this book.

Collaborative commerce strategic concepts provide the foundation for digital business practices that enable business ecosystem trading partners to create, manage, and use data in a shared environment to design, build, and support their whole product throughout its life cycle, working separately to leverage their core competencies together in a value chain that forms a virtual enterprise (Heisterberg 2003). Sustainable competitive advantage has been realized by creating a culture for adoption of digital business strategies and customer-centric business models. This definition of digital business is made actionable by blending the elements of operations management, performance management, and information management in order to realize virtual enterprise integration within business ecosystems. It is important to understand that a precondition for success of this integration is creating an ecosystem culture that rewards innovation as a strategic customer value proposition based on mutual trust. (See Figure 1.2.)

Figure 1.2 Business Ecosystem

These concepts for business ecosystem success are predicated on collaboration, as the Internet “killer app” and cloud technologies enable the IT agility that drives the sense-and-respond processes that create business agility. Taking a systems approach to business ecosystems, referred to as “ecosystemism,” fosters business agility thinking with twenty-first-century strategic goals: grow revenue, reduce cost, and manage risk. This provides the organizing principles for development of customer-centric business models. As such an approach to articulating a contemporary vision of creating business value, ecosystemism is based on systems theory in general, and specifically the fundamental first two laws.

The first law is known as “synergy” or commonly referred to as “the whole is greater than the sum of its parts.” It has been adopted as the mainstream business practice of collaboration and often implemented using “crowdsourcing” processes. The second law is known as “suboptimization.” This concept may be understood as simply “a chain is as strong as its weakest link.” It is best reflected by the business practice of innovation utilizing core competencies.

An ecosystemism digital divide is defined by the ecosystems that are characterized by their associated enterprise system scale:

• Digital business intranet → Developing a partnership between the chief marketing officer (CMO) and the chief information officer (CIO) that leverages the business value of IT
• Virtual enterprise extranet → Enabling competitive parity of small and medium-sized enterprises (SMEs) versus big enterprises by executing c-commerce strategies
• Business ecosystem Internet → Creating global market spaces in a flat world driven by social business models

As a matter of fact, just as e-business concepts have been subsumed into twenty-first-century standard practice for the management of business, c-commerce concepts are now simply expressed in the context of collaboration. Clearly, the business world has recognized they are all strong at something, yet not everything, and have concluded that two or more heads are better than one. This is evidenced by how ubiquitous the term collaborate is in everyday business conversation, as well as its widespread use in the trade press and in advertising copy of all media.

The expression of digital business management in terms of c-commerce principles and practices is both broad and deep. A complete treatment of t...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Foreword: How to Survive in the Jungle
• Preface
• Chapter 1: Bridging the Digital Divide
• Chapter 2: Disruptive Innovation and Evolving Business Model
• Chapter 3: Hyperconnectivity Drives Innovation
• Chapter 4: Breaking the Barrier of Physical Infrastructure
• Chapter 5: Power of Collaborative Management
• Chapter 6: Mobility Drives Agility
• Chapter 7: Listening to the Voices
• Chapter 8: Role of Collective Intelligence
• Chapter 9: Cultivating Knowledge Ecosystems
• Chapter 10: 2020 Foresight
• Epilogue: Selling Sonoma County Wine CountrySneakaway Marketing Campaign Keystone Scenario Use CaseBusiness Agility Readiness Case Study
• About the Authors
• Acknowledgments
• Index
• End User License Agreement