A look at how companies can prepare for internet integration Getting ready for global integration

We face today perhaps the most exciting opportunities ever to change the way we look at the business arena. Not since the advent of electricity has there been more mind bending possibilities leaping daily onto the business menu. The digital age will without doubt generate over the coming years more novel applications of technology than we have witnessed before. In many cases we the general public may not even notice in the short term that they are permeating our lives.

In the business world the advent of the Internet has opened up the possibility of economic interactive communication on a scale that most of us could not have perceived 10years ago. The economics of its application means most if not all of the world’s business communities are effective live online together. As access spreads at the current rate market reach is beyond what most corporations could ever have considered possible.

The Internet is not though simply a method of people communicating. It has the capacity to link systems across the world to an extent that previous technology made available only to the wealthy few. Converting data from disparate systems allowing both control and integration at a distance. Systems that can respond to demands whilst the operators sleep. ‘Follow the sun’ working is now a real consideration. As is multi site collaboration whether a major corporation or a specialist one business. Borders have little impact nor does culture, at least in terms of systems.

No one today can doubt the capability and promise. In fact until recently it was difficult to read any newspaper or magazine without being bombarded with E-business offerings and predictions. Then the technology bubble burst and one might have thought it was all over. Nothing could be more wrong. The truth is that the technology is getting stronger and more comprehensive. What has happened though is the realism that business is not just about technology. The hype was founded on poor business ideals often with little substance .Now the traditional business community is stepping to the fore looking at how to harness the opportunity.

The current dilemma though is that unlike traditional cross border trading where there were rules of some sort at either end. The Internet as yet has no common structure for business. The technology may bottom out into common interfaces but the business framework may take years or never reach maturity. It is reasonable to assume therefore that the early movers will be those who already have established cross border activity. Even perhaps some of which that have ongoing collaborative arrangements. The big question is however, are these relationships ready for the degree of closer integration that the Internet offers.

PSL was formed in 1990 as a joint CBI/DTI initiative to foster the development of partnering best practice. On the premise that the competitiveness of UK industry could be improved by companies working in concert on cost reduction opportunities. The concept has been generally adopted as an option for organisations and many have benefited from its application. In the early days many organisations claimed to have partnerships in place. On investigation and analysis of the relationship these where found to be far from the outsiders perspective of excellence and in many cases often delivering well below the original objectives or promise.

In some cases PSL has used its collective experience to identify the problem areas and develop structures and processes to revitalise the relationships. Often completely refocusing the parties to meet expectations. It is from this experience that PSL has been looking at the developments of Internet integration. Where the rules are still far from well defined and the expectation possibly over cooked.

Building relationships where the exchange of information may be more structured but still reflective of traditional contracting ideas is one thing. It is a much different view from opening channels to cross company data on an open access basis. Taking the situation further as the ‘IT’ promotional literature would suggest to the creation of integrated virtual business communities online, opens a vista of issues which have not had to be addressed before.

We should not be negative about the opportunities that exist but it is as well to be cautious before initiating costly programmes assuming a sound relationship base. The technology is already in place and is simply a question of a balanced investment assessment. Along side this must be a balanced assessment of the investment in the relationships involved. Without this there is clear potential for enhanced risk of the initiative failing or worse an impact on the business overall.

Trading globally has shown up its fair share of failures, whether political, commercial or environmental. When the business is a subsidiary you have control in most cases as to how it performs, in all respects. Dealing on a strict subcontractor basis provides boundaries of responsibility. When you take the new concepts of virtual integration the issue is far from as clear cut. If there are not common objectives, processes and aims the mixture could become volatile and counter productive.

Relationships are the foundation of business dealings. Many issues for which it is difficult to build contractual rules affect these relationships. The more global the operations the complex the interaction. It is from this perspective that PSL would suggest a clear strategy for companies running along side their web initiatives. If one take the analogy it is not the gun that dangerous it’s the person that holds it. Investing in the technology without investing in the relationships that use the technology can be equally dangerous.

Developing the right relationship structure will enable the integrated solution to prosper and deliver the potential that is out there.