Business networks are all the rage, but creating them takes more than just software
Amazon.com. eBay. Facebook. LinkedIn. Flicker. Twitter. Mint.com. Many of us now rely on these networks and communities to manage our personal commerce, relationships and finances. Now, with increasing frequency, companies are demanding similar tools to manage their business.
A decade ago, the Internet was viewed primarily as a consumer application, with limited viability for critical business processes outside of email or perhaps simple e-commerce applications. Today, it is seen as a strategic channel that nearly every company is using in some significant capacity – from discovering suppliers, to buying and selling goods and services, to connecting with customers and trading partners - to execute key business transactions.
What brought about the shift?
Certainly, the Internet has evolved – it is faster, more secure, and proven. But in addition, the business world is also a much different place today. It used to be that management could focus on their internal operations and trust that their companies would realize success. But those days are long gone. As business has become more global, the traditional enterprise as we know it has morphed into something called the extraprise.
In the extraprise, it is not just about executing a process within a company, but also across the entire value chain – especially outside the four walls of the enterprise. It’s not just about the intelligence within an organization, but also the extended intelligence networks that are developed through communities. It is not about just doing things faster, but also tapping insights and best practices to do things better and more effective. It is not about loose integration of processes across companies, but rather having one business process across multiple companies.
In short, today’s business commerce is about being connected, efficient and informed:
Connected to networks that facilitate collaboration around key business processes.
Efficient by automating tactical, transactional work to drive greater efficiency and productivity.
Informed by participating in communities that deliver market insights and best practices to fuel optimal performance and decisions.
It takes more than software and an internet connection.
In business commerce processes such as those supported by Ariba, this new approach to business commerce won’t be driven by enterprise applications. Companies have invested billions in such technologies to simplify tasks like developing proposals, taking orders, extracting spreadsheets, and even streamlining complete functional areas like procurement and human resources. Yet business commerce remains highly inefficient. Why? Because commerce happens between companies. And such closed systems and processes that have long been the domain of installed enterprise applications are not designed to accommodate this fluid company-to-company, extraprise activity.
The key to extending and improving collaborative trading relationships lies in open networks that can be easily shared by everyone that participates in the commerce process – from trading partners, to buyers and sellers, to intermediaries.
New Rules for a New Business Paradigm.
So what does it take to build these networks and communities to drive and support collaborative commerce? A whole new way of thinking and operating. Creating and managing a business commerce network is different than providing software -- even Software-as-a-Service (SaaS). It is also different than simply providing traditional network connection capabilities. To be successful, companies that provide a networked commerce community must completely rethink the way they build, deploy, host, and support software and service their participants. Performing as a Cloud Commerce Community requires a whole new set of rules:
Break Down Application Silos
Participants in business commerce networks want to acquire capabilities – not purchase tools or application models as they did in the legacy software era. To enable this, vendors must break down product-oriented boundaries among applications and make development a more intertwined, cross-suite process.
Make Innovation a Constant
Innovation and capabilities are now expected as part of business commerce networks, not as a product tool to be purchased and installed. No longer just about software features and functionality, the concept of innovation extends to reporting, hosting, monitoring and security and must be frequently streamed in seamless, non-disruptive and easy-to-use updates.
Focus on Quality
While innovation is key, quality – specifically as it pertains to capability function, integrity, and availability – trumps all other considerations when it comes to business networks. In delivering new capabilities, remember the Golden Rule: “Thou shall not break anything.” And when it comes to business commerce, buyers and sellers demand greater integrity. They expect to be able to conduct complete transactions without disruption or any compromise of their data. This also means scrapping traditional notions of software availability - even under the more recent SaaS rulebook, - in favor of a more comprehensive definition of business commerce availability.
Constantly evolving needs and shifting priorities, dictated by a more connected, globally-engaged business environment, have made speed the new market requirement for success. And this means organizing to operate in a more nimble and flexible manner than ever before.
Overhaul Customer Support
Participants in business commerce communities have in essence outsourced much of what used to be the function of their internal IT departments to the network provider. As a result, assistance with software and non-software challenges as well as process enablement to drive more efficient and effective business commerce is not only expected, but required. And in an always-on community, customers demand immediate, proactive response to their issues, particularly as they impact business commerce continuity.
Redefine Customer Relationships
In the legacy software product world, customer relationships were episodic. Upon “go-live”, the relationship was essentially considered complete. In a network-driven cloud community, customers and other participants require more continuous, ongoing assistance with enabling and institutionalizing business commerce capabilities and effectively leveraging solutions to drive them.
Lots of companies are reaching for the Cloud. It’s a more scalable, efficient way to do business on a global basis. It requires no software, hardware or resources to deploy. Time to value is near immediate. And results – in the form of improved performance and profits – can be astounding.
But to reap these rewards, the organizations providing these networked community capabilities must transform in ways that enable them to deliver products and services that meet a completely new set of business challenges and customer needs. Otherwise, the benefit of the Cloud will remain nothing more than sweet, fluffy dreams.