Other characteristics that are emerging defining the new business models:
Successful organisations will have agility as a cardinal virtue. A core competency will be the ability to sense changes in the environment, find out how to react and then respond - quickly.
Organisations will have to work in real time as business-to-business interaction becomes more automated. The direct integration of companies with key customers and suppliers will have massive impacts on how businesses relate to each other.
With e-commerce has come the need to manage an expanded set of organisational relationships. The appearance of 'virtual middlemen', such as e-marketplaces, has created this more complex web of connections. Outsourcing of non-core activities is facilitated by the technology but such relationships still need to be managed. In other areas companies are forging direct relationships with customers - who were traditionally at arm's length - because the technology facilitates more timely interactions, and also because e-commerce captures from customers detailed information about them, facilitating precisely" targeted marketing.
Ubiquitous and real-time information
In the late 20th century we moved from data-driven to information-driven economies. In the 21st century we are aiming for knowledge management. Economist Adam Smith's 18th century vision of perfect competition and perfect knowledge seems almost within reach and the prospect of comprehensive knowledge management will affect business models of the ways in which organisations compete. The concept of 'Clockspeed' (Fine, 1999) supports this change of focus, where the ability to capture and share Internet-enabled real time information has dramatically boosted the clockspeed of many industries, dictating the key elements of survival. Industry's rate of evolution increases, manifested in areas such as the speed at which new products and services are introduced and new business model strategies are adopted. Product and service lifecycles will no longer be predictable. Consequently strategies must be swiftly conceived, rapidly executed and flexible enough to be changed at a moment's notice.
Ridderstråle and Nordström (2000) argue that firms are starting to specialise- with the concept of the 'funky firm'. They back up their theory by pointing out that Fortune 500 companies employed 20 per cent of the workforce in the 1970s but less than ten per cent now. They also talk about organisations becoming flatter, so that the time from problem selection to solution implementation is reduced. Organisations will work horizontally, in processes.
Copyright Partnership Sourcing Ltd 2001. All rights reserved.