Jabit

“The term ‘extended enterprise’ represents the concept that a company is made up not just of its employees, its board members, and executives, but also its business partners, its suppliers, and even its customers. The extended enterprise can only be successful if all of the component groups and individuals have the information they need in order to do business effectively.” (Information Builders).

The extended enterprise is alive and well. Businesses are concentrating more and more on their core competences and outsourcing all other activities. This results in such businesses being very dependant on their suppliers of both product components and services. This has proved to be a good thing. According to Smith and Reinersten (1995), as much as 80 per cent of a product’s value can be purchased from suppliers.

Key to the Extended Enterprise is trust and information sharing - the latter being greatly facilitated by advances in technology and, in particular, the web. This bodes well for rural based businesses with the appropriate technological infrastructure. The expertise that exists within rural businesses can become part of an extended enterprise. The need for geographic proximity to all parties in a business relationship are quickly diminishing - we need only look to the successes many companies in Ireland have had in outsourcing manufacturing to places as far away as India.

So my advice to rural based businesses, not only do you have to be very good at what you do, you also need to have the technology to allow you to integrate with other businesses. If you don’t currently have the technology then work hard at ensuring you have the capacity to absorb the technology if the opportunity arises.

Information Builders: http://www.informationbuilders.com/extended-enterprise.html

Smith and Reinersten (1995), ‘Developing Products in Half the Time: New Rules, New
Tools,’ John Wiley and Sons Inc.