Week 4 - de rest Flashcards
(36 cards)
Explain networking through coordination
The processes of the coordinating business partners, together with the outputs they produce, form the operative side of the business relationship. The networking of processes describes the organization of dependencies between the processes and/or tasks of the various network partners.
Explain coordination and networking
Coordination is the ‘management of dependent activities’ and networking is the coordination in networks.
When are processes interdependent?
If processes on both sides of the value chain rely on the same information, they are interdependent. Processes are coordinated exclusively by means of outputs, so coordination must, therefore, be output or part of an output.
explain the coordination capability / networkability
The potential of inter-organizational networking lies in the suitable design of the coordination capability (networkability) of outputs and all associated design areas such as process, IT, people, organization, structure and culture.
Explain coordination area’s
Coordination area’s are processes (or different business units) which are characterized by high dependency and therefore require a high degree of coordination.
What is the difference between coordination and integration areas?
Integration areas and coordination both refer to processes and their tasks. The integration area pursues integration through integrated information processing, the coordination area pursues integration through the organization of dependencies.
LEARN
➢ A: The goal of relationship management is to create a relationship with business partners such as customers or key suppliers which is as close, long-term and thus profitable as possible. The success of relationship management is dependent on the quality of supply chain management and vice versa. Businesses make information and capabilities available to their customers which are generated in supply chain management (product status etc). And supply chain management relies on
relationship management information and capabilities (payment terms, customer information)
➢ B: Relationship management provides the area of innovation first and foremost with market analyses, competitor strategies and products and concrete customer requirements. At the same time, relationship management relies on the area of innovation for information on new products, for instance, or ongoing research projects with image value.
➢ C: Innovation and supply chain management are connected via product design and the process required to produce it. Jointly used documents here include parts lists and production process descriptions.
➢ D: The infrastructure area supplies the ‘operating resource’ information to all other areas. Relationship management, supply chain management and innovation rely on information from external and internal accounting as well as from data management.
➢ E: Organization development forms the basis for all other coordination areas by ensuring suitable organization structures and/or cultural and political attitudes on the part of the organization units involved. The success of the operative coordination areas is dependent on organization development at both the intra-organizational and inter-organizational levels.
Explain Eservices and Standards
eServices
Decreasing coordination costs through the use of ERP are leading on the one hand to the substitution of IT-supported forms of integration for integration through employees. On the other, we see decreasing coordination costs through demand elasticity leading to an increasing number of economical transactions (e.g. micropayments). Every economy needs a national information infrastructure. Every organization needs to plug into this utility with an enterprise information infrastructure.
Standards
Customers, suppliers and services which link customers with suppliers have to be able to understand each other at many different levels of their relationship in order to be able to organize their interdependency. Standards make this understanding possible. Standards are objects which are accepted and shared within a community. Objects are understood te means hardware, software, processes etc. Communities are business units, value chains, geographical regions. Standards are an integral part of the model of the networked enterprise. They make it possible to realize economies of scale at the same time as individualization and constitute a central coordination mechanism.
What is networkability?
Networkability is the internal and external ability to cooperate as well as the ability to rapidly and efficiently establish, conduct and develop IT-supported business relationships (Osterle, 2001).
Networkability is the capability of an organization to collaborate internally and externally at the level of business processes and underlying IT infrastructure (Wigand et al, 1997).
The degree of networkability determines the efficiency of network formation by an individual organisation (Alt & Smits, 2007) and by business networks (Alt & Smits, 2010). High networkability enhances network development and network performance.
What are the design objects of networkability?
➢ Products and services: Networkability of products and services signifies their ability to be customized, and aggregated swiftly and with low barriers so that they are aligned to requirements in the network. Networkable products and services can be altered quickly and inexpensively for specific partners or be integrated into other products. This includes the personalization of services and configurability regarding the information needed (status info, partners’ article numbers).
➢ Process: Networkability of processes implies that they may be synthesized quickly and with low costs to produce agile products and services. Networkable processes can quickly and inexpensively establish and conduct a relationship of coordination with corresponding processes. Automatic requests for various catalogues or automatic orders when stock levels fall below an agreed safety level are examples of this.
➢ Information systems: Networked information systems are required to be easy to be reconfigured to meet new and changing network requirements. They can be linked up to other IS quickly and inexpensively and support communication on the system level. This especially applies to set up an EDI link with a business partner.
➢ Employees: Networkable employees are the linking pin in the networked organizations, glueing enterprises at the personal level. They are oriented to the customer, understand the relevance of win-win situations and are also assessed according to the way in which they maintain and look after relationships between partners.
➢ Organizational structure: Networkable organizational structures need to be able to morph dynamically to accommodate evolving, interconnected business processes. Networkable organizations can be adapted quickly and inexpensively to new market requirements. Examples of this are the rapid creation of temporary inter-company teams, the relocation of business processes or the joint execution of processes (formation of so-called shared services)
➢ Company culture: Networkable culture refers to the culture-related ability of organizations to allow highly dynamic and trust collaborations between partners in the network. Networkable company cultures promote cooperation by being open to change and by basing cooperation between business partners on a relationship of trust instead of mutual checks (on costs)
What are the basic criteria to measure networkability?
The basic criteria for measuring networkability are time, costs and the quality of the change.
Networkability thus indicates what changes in business relationships a company can cope with and in what time and at what cost it can do so.
What are the three main effects of activities for designing a company’s networkability?
➢ 1: Reduction of time and costs when new business relationships are established when transactions are conducted;
➢ 2: Reduction of the specificity of investments and increased flexibility of existing investments;
➢ 3: Improved opportunities for detecting and occupying new market segments at an early stage.
What are coordination mechanisms?
Processes or rules which organize the relationships of dependence between tasks.
In order to develop concrete ideas on the action to be taken, we interpret the coordination mechanisms more broadly as rules for objects with the property of networkability.
coordination mechanisms: Design of products and services
Design of products and services: The design of products is very powerful but, up to now, rarely considered alternative of action for integrating value creation in networks. The most important coordination mechanisms include modularization, standardization and digitalization of products and services. For example, modularized, standardized and digitalized products and services enable rapid and efficient bundling to create comprehensive products and services which can be directed at solving specific customer problems (mass customization). Concerning physical products, the coordination mechanisms of standardization and modularization allow considerable postponement of the time when a product receives customer-specific modifications.
Coordination mechanisms: Design of processes
Design of processes: Process coordination describes the consistent design of inter-organizational processes of planning and implementation. The coordination mechanisms include process standards and the form of process integration. Standardized processes, such as those developed by OBI or CPFR, reduce the effort involved in the coordination and, in the ideal case, lead to integration on a pragmatic level or electronic workflows between anonymous partners. Principle mechanisms of process integration are loose and close links of processes. The first, for example, is known in the area of indirect procurement (so-called MRO procurement) and allows an appropriate degree of flexibility by means of catalog solutions (e.g. rapid addition of suppliers). Close process links, for example, can be encountered in supply chain management and allow coordinated and completely automated processes in real-time (e.g. strategies of automatic stock-keeping).
Coordination mechanisms: Design of information systems
Design of information systems: The networking of IS is the basis for designing new products/services and new business relationships. Products and services, processes and organizational structures thus depend on the networkability of the ‘basis-forming’ IS. The most important mechanisms for increasing the networkability of IS are communication and data standards as well as the integration of internal information systems. Templates, for example, use the same type of configuration for distributed ERP systems to solve the problem of standardizing data and messages and thus achieve integration on the semantic level. At the same time, they are the starting point for linking partners according to the same pattern. Finally, system integration allows a high quality of data and real-time processing of this data.
Coordination mechanisms: Design of organizational structure
Design of organizational structure: The organizational structure in the sense of the network topology describes the individual business units in a network. The coordination mechanisms of virtualization, modularization and distributed responsibilities are used for designing different networking structures, e.g. dynamic, stable or internal networks. For example, in dynamic networks, several small (modularization) companies cooperate to pursue shared business goals (virtualization) with each participating company being responsible for their own business (distributed responsibility).
Coordination mechanisms: Design of people’s roles and company culture
Design of people’s roles and company culture: The role of the employees and managers in networks is distinguished from the roles found in classical hierarchies mainly by “an increase in the requirements for an ability to make decisions and assume responsibility for complete, customer-oriented processes as well as the capacity for teamwork, communication and innovation [… ].“ The important coordination mechanisms are openness, the identification and control of goal-conflicts as well as trust-creating measures. For example, openness and trust-creating measures enable to establish and maintain personal networks.
What does he model of a networked enterprise provide?
➢ An orientation aid for potential analysis: Networked enterprises can orient themselves towards the discussed potentials of the individual coordination areas when evaluating their coordination strategies. This chapter distinguishes between potential derived from (a) process efficiency through networking, (b) enhanced customer benefits and (c) new business opportunities.
➢ An orientation aid for strategy evaluation: Experience has shown that networked enterprises sometimes have a tendency not to devote enough attention to dependencies between coordination areas. They try to coordinate sales processes within an internal network, for example, and neglect the fact that the organization of master data is a prerequisite for a ‘global’ process network. The model lists the major dependencies between coordination areas and can thus serve as the basis for strategy evaluation.
➢ An orientation aid to increase networking manageability: By splitting up the networking problem into coordination areas, the model of a networked enterprise creates domains which differ in terms of culture, employees, processes, and information systems and which consequently the management of networked enterprises can design and run as one unit. At the same time, the model identifies the most important dependencies between the coordination areas and thus creates the right conditions for inter-area management, e.g. for the required calibration of the coordination areas supply chain management, relationship management and infrastructure.
➢ A means of deriving management tasks for inter-company coordination: The model of a networked enterprise supports the derivation of management tasks in a networked enterprise. The most important tasks in connection with networking include (a) strategic positioning of the networked enterprise in the various networks, (b) organization of the coordination areas relationship management, innovation, supply chain management, infrastructure and organization development, (c) organization of internal integration of the coordination areas and (d) organization of IT, standards and services on which the coordination is built.
➢ Infrastructure positioning from the business point of view: Supply chain management, relationship management and innovation are immediately dependent on the coordination area infrastructure. While most companies recognize this connection. The infrastructure area, in particular data management, is underdeveloped. Companies usually lack business arguments to support time and cost-intensive harmonization and networking projects. The model of a networked enterprise establishes the link between the supply chain, relationship management and innovation processes, which are considered to be strategic, and the supporting infrastructure processes, thus simplifying the business argumentation for infrastructure projects.
➢ Positioning of standards and services: The most powerful elementary goal of networking is the m:n capability. This permits the automation of new business functions and at the same time makes it possible to exploit the effects of economies of scope (n customers generate demand for individual, comprehensive output systems which can be configured from the standardized output) and economies of scale (m suppliers specialized in individual outputs). Standards and services are the central mechanisms which permit an m:n network. The model of a networked enterprise positions them accordingly and thus shows the increasing significance of and the necessity for a well-founded evaluation process for the selection of standards and services.
What are the four main areas of the I-Fit Model?
‘IT governance’, ‘Strategic alignment’, ‘Information quality’, and ‘Business Performance’
What means strategic alignment? (Business - IT alignment?)
Strategic alignment, or business-IT alignment, intends to support the integration of IT into business strategy and processes. The classic ‘Strategic Alignment Model’ distinguishes between the business domain (business strategy and business processes) and the technology domain
Explain two types of alignment?
The first sees alignment as an ongoing process of balancing IT supply and business needs, requiring specific IT management capabilities and going through discernable patterns over time. The second sees alignment as a state and as a degree of fit between business and IT functions. There are three reasons for the elusiveness of alignment.
Why is Busines - IT alignment hard?
➢ Alignment is often regarded as ‘how IT is aligned to the business’, lacking the focus on ‘how the business is aligned with IT’.
➢ Alignment has often been regarded as a single item issue (choose right technology) instead of being the result of multiple issues (adequate implementation process, adaptations of business activities and data)
➢ There are no adequate tools to assess alignment in an organization.
What is Strategic intent?
Strategic intent is a concept to stress the importance of balancing the strategic focus of an organization with available internal resources, by establishing communication between managers and shared perceptions of reality.
