Enterprise Toolbox: Radical Organizational Changes

SAN MATEO (04/24/2000) - We are moving quickly toward the creation of "virtual enterprises" that encompass e-business customers, distributors, suppliers, physically distributed management, and staff, as well as a multitude of intermediate-term interconnected business partnerships.

These dramatic changes will surely cause the market to have its share of hiccups along the way. In addition, we'll need to jump through technical and staffing hurdles to compete in this information revolution.

Today the virtual enterprise is in its infancy. Therefore, I believe it crucial to examine the two key underlying elements -- organization and integration -- that will most directly affect your chances of success.

Our current organizational structures are rooted in static, military-based concepts that depend on long-standing business partnerships. I've written previously here about adopting a more flexible, locationless working model (see www.infoworld.com/printlinks).

The folks at the Massachusetts Institute of Technology's Sloan School of Management have also been working on defining what the organization of the 21st century might look like (check out ccs.mit.edu/21c).

In particular, the group's work examines the need to evaluate business performance based on broader metrics rather than just focusing on financials.

The group recently defined the stakeholders of an organization as "the customer, employees, investors, suppliers, the environment, and society as a whole." The paper, at ccs.mit.edu/papers/pdf/wp032manifesto21C.pdf, is worth a read.

Internal or external integration has always added complexities for organizations. What is different now is that the amount of integration needed to compete is greater than ever before. In addition, fixed integration with long-standing business partnerships is changing to a more dynamic, project-oriented set of relationships that requires an on-the-fly approach to integration.

EAI (enterprise application integration) products and services have made progress toward easing the complexities of integration. However, these gains have been mainly in the data and application layers of the organization.

Presently, EAI technology is beginning to blend closely with both e-commerce solutions and application server products. Ultimately, I see EAI technology as a middle-tier commodity, not a separate technology category.

Next-generation EAI will need to address four things to meet the needs of the virtual enterprise. First, integration needs to be multilayered, including data, application components, user interfaces, and business process integration.

EAI vendors have done a good job of supporting data and application integration. And a few are going after business process integration. However, we need greater emphasis on supporting the latter.

Second, the virtual enterprise requires integrations that change dynamically.

Integration tools and technology will have to address the need to rapidly reconfigure integration infrastructure. Although many EAI providers claim such dynamic support, a lot of manual configuration is still required.

Third, the way in which we manage internal and external integration needs some adjustment. Current approaches to integration place control in the application and data layers. Integration administration needs to move up into the business process layer to reduce complexity and increase manage-ability.

Finally, most EAI products today are tightly focused on integrating transaction-based systems. This is only part of the equation. Within the context of the virtual enterprise, the decisions you and your business partners make are much more interrelated.

The virtual enterprise expands workflow well beyond the corporate walls. This wide-area workflow necessitates integrating both decision support and business intelligence systems. This expanded integration will yield smarter, more flexible strategic planning.

The way we conduct business is undergoing a radical transformation. The winners in the new economy will be those who examine and change organizational structures and approaches to integration. What will your virtual enterprise look like? Write to me at maggie_biggs@infoworld.com.

Maggie Biggs is director of the InfoWorld Test Center.

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