Tuesday, May 02, 2006

Smart Business Networks

On Friday I attended an excellent talk by Professor Eric van Heck of RSM Erasmus University, Rotterdam on "The Emergence of Smart Business Networks". I didn't have to go all the way to The Netherlands, as he was a guest of the ANU's National Centre for Information Systems Research in Canberra:
The smart business network (SBN) captures the capabilities of many individual organisations to fulfil customer needs and compete more effectively. Rather than performing as individuals in a traditional value chain, organisations combine rapidly to act in highly efficient and effective delivery. These participants are nodes in a loosely structured network in which they are linked according to the customer’s specific delivery requirements to become the smart business network. Indeed, customers become integral participants in the smart business network.

Professor van Heck will show that smart business networks now exist and are growing. Users download Skype’s “business logic” for telephony; eBay combines ad hoc buyers and sellers in an electronic market; Friendster connects over 20 million individuals who create their own online profiles and is introducing trading of digital content. With simple network structures these and many other examples are initiating new behaviour and indicating how nodes in a business network will link and interact.
Professor van Heck went through several examples, including:
  • Kenny's Bookshop: an Irish bookstore which now operates globally selling Gaelic literature,
  • thebigword: translation services company, which uses translators world wide for fast translations,
  • Dutch Flower Auctions: The traditional Dutch auction is now conducted online.
  • Gewild Wonen ("Sought-after" or "spontaneous" housing): This is a residential area in a new town in The Netherlands built using modular housing techniques. This struck a chord as I have been looking at modular building, but had not thought of the role the Internet could play.
It would be tempting for an IT person to dismiss this area of information systems research by saying that it was business people taking the obvious and dressing it up in research terms. The Internet and the web allow individuals and businesses to work together on-line. But is this really such a new idea? It has been possible to use the fax, telex and before them the telegram to work electronically at a distance for at least the last hundred years. Is there really anything that different in a bookstore contacting suppliers and clients via the Internet, than via letter or telegram? Is it a difference of kind or just degree?

What I found more interesting than the examples was Professor van Heck's use of the network theory of Paul Erdos to work out if a potential networked organization was of a suitable structure to work. In this way, for example, you might work out if a potential on-line business idea you had was workable. How many hundreds or thousands of organizations could you have, what structure of franchisees would work?

Professor van Heck also asked the provocative question as to how this might be applied to government. Could government be restructured as a series of networked service providers? He observed that the Finance Department might do well out of this, becoming the natural coordinating agency. Perhaps we could take this a step further: my apartment's body corporate acts as a kind of fourth tier of government, providing some services to residents. Perhaps smart networks could be used to seamlessly blend this with local government.

Professor van Heck has a book entitled "Smart Business Networks" and you can read bits of it on the Amazon web site. I searched for "Australia" and found only one reference on Page 187:
"... excess of 150 U.S. academic and research libraries and have clients in other countries in- cluding the U.K., France, Germany, Australia, Russia and Japan. The success in being able to cost effectively reach existing customers via the Internet and in particular ..."
Hopefully after his Australian visit we will get a bigger mention in his next book.

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