The Chinese motorcycle story is not about an online network, but it illustrates a potential for Web 2.0 technologies that goes well beyond today's relatively simple consumer applications. The motorcycle entrepreneurs build trust through lots of face-to-face time in coffee shops. China has a weak rule of law, making personal relationships even more important.
This is an "emergent" business network, because there is no centrally defined structure. The structure emerges from lots of little interactions that are designed to solve specific problems. There is no "big Daddy" making the rules. These are not markets dominated by say Wal-Mart in retail or Microsoft in PCs.
In the West, these networks can develop online - linking wealthy, sophisticated clients who want a more customized product, with a network of companies who come together to assemble, package and deliver "just in time". Think of these networks as a distributed, multi-company version of the supply chain network that made Dell a powerhouse.
Personalization and Customization
The coming wave of Online Emergent Business Networks is the real Enterprise 2.0 story. The impact on a large company from using Blogs, RSS and Wikis is not significant when the real guts of the business is locked into legacy ERP, SCM and CRM systems. These companies were built to deliver mass produced products for mass markets, whereas the coming wave is about personalization and customization. A couple of Blogs and Wikis won’t make that transformation happen!
These demanding but wealthy customers want something unique; a custom motorbike, grass fed beef from a farm near their weekend home, custom fit designer clothes, a self-published book of family memoirs, a leading edge solution to a relatively obscure healthcare problem. These kinds of products and services require a massive re-wiring of the current mass-market way of delivering products and services.
Food is one case where the transition to a new, more dynamic supply chain is critical. Reading Fast Food Nation will show that this is an urgent healthcare issue, not just a matter of consumer taste. However as this pioneering local food Diner in Vermont discovered, the supply chain is a massive obstacle.
The current Fortune 500 incumbents will not build these emergent business networks; they are threatened by them. Nor is it likely to be built by the few giant ERP vendors left who cater to those companies. So this sounds like a gap that startups can fill.
Key Elements of the Platform
The technical platform to enable these emergent business networks is non-trivial. It will need enterprise-scale technology for complex transactions that have to be 100% correct and secure. Plus everything has to be real time; this is the kind of technology that powers the capital markets today.
However, the word "emergent" is not one you associate with ERP or banking systems today. We are more likely to think of rigid, monolithic, spaghetti code - chaotic and fragile. These new platforms will need to be much, much more adaptable.
Key elements of the required platform will be:
1. Some elements from social networking, enabling market participants to describe themselves and link to trusted partners.
2. Adaptive personalization for consumers, enabling them to see the network through the prism of their specialized interests.
3. Systems for rating all marketing participants, which avoid ratings spam with authentication.
4. Systems for aggregating many small orders for lots of small producers, via one or more service providers, and arranging delivery just in time.
5. Wireless user interfaces for people who don't "live on their PC", but who are out and about doing work.
6. Above all, all market participants need access to a common data pool. Even if some data is private, the meta-tags/model must be consistent. It must also be able to evolve as the network evolves.
7. A model based framework where business analysts can make changes to the business logic; and which creates the code (MDA and so on).
The business model for a system like this has to be transaction fees, as no big company plans to spend millions of dollars ripping out their ERP/banking systems any time soon. So the build has to be VC funded. It will be built on a mix of open source tools, industry standard XML models, open APIs and logical models.
In what markets will this happen?
These emergent business networks will evolve first where most of the following conditions exist:
1. A wealthy and discriminating consumer that wants that "little extra special something". The new money that comes into the network from catering to their extra needs is the fuel that enables the network to grow, without any zero sum disintermediation.
2. Inventory has to be “fresh”; food for example, or even fashion.
3. Manufacturing is light and/or lots of it can be automated. This makes it possible to have production close to the consumer (not half way around the world), so can be delivered very quickly.
4. A network of specialist sub-contractors and service providers.
Let us know your thoughts on this - is this what you want to see in Enterprise 2.0? What other opportunities are there for startups?
Motorbike pic by chrisdrum
No comments:
Post a Comment