“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.
Recently I gave a talk to a group of, rural based, micro-enterprises entitled “Getting more from your business through technology”. I had 20 minutes in which to say my piece. Here were my main points:
No one knows your business like yourself. It is difficult, nay impossible, for anybody to tell you how to get more from your business through technology without them first understanding your business model (especially in just 20 minutes).
Are you clear on how you compete? Are you following a low cost strategy or a product/service differentiation strategy? Why? How do you seek to create and sustain a competitive advantage? If you know the answers to these questions then you can start determining how to get more from your business through technology.
Know your value stream, that is, be clear as to how you add value to the customer. Seek out technologies that either
help you increase the customer value you provide or
help you provide new customer value.
Technology is generally a means through which customer value can be provided. Customers value the products of technology and not usually the technology itself.
Develop a technology strategy which focus on realising your business strategy through, technology assisted, customer value creation. Don’t over document such a strategy.
Continuously ask the question “How does this technology add customer value?”.
The use of technology is, for most businesses, no longer optional. Ignoring technology is akin to ignoring your competitors and your customers.
Areas in which technology can assist you create customer value:
Marketing e.g. web site, blogs, online advertising, email
“As a doctor and researcher, Hans Rosling identified a new paralytic disease induced by hunger in rural Africa. Now the global health professor is looking at the bigger picture, increasing our understanding of social and economic development with the remarkable trend-revealing software he created.” (TEB Web site)
Below is a recording of a talk he gave at TED 2007 entitled “New insights on poverty and life around the world”. This is one of the most enjoyable presentations I have watched in a long time and is a great demonstration of Dr Rosling’s (now Google’s) way cool statistical software.
