What is a networked enterprise?

Discussions About Creating and Managing the Networked Enterprise

In a Journal of Marketing article entitled “Marketing in the Network Economy,” Ravi Achrol and Philip Kotler introduced the concepts of a networked organization. They define a networked enterprise as an interdependent coalition of task- or skill-specialized business entities (independent ventures or autonomous organizational units) that operates without hierarchical control but is embedded by dense lateral connections.

A networked enterprise has shared objectives or purposes that interact and build relationships with each other in an online environment across time and space.

– They are created to reduce hierarchy and open ventures to their ecosystems.

– They are organized around customer needs and new market opportunities.

– They maximize the productivity by creating partnerships among independent skill-specialized firms and often seek horizontal synergies across industries to meet new partners and access resources.

As a result, an online “community” of people becomes unified around a common purpose, place, or interest. This community can make decisions, nurture inspiration, solve problems, and learn and innovate faster. The more participation that occurs in the network to identify and respond to customer needs, the greater the value that is created for the members as a whole. The fact is that you worked so hard to bootstrap up the Hillary Step, get market traction, and get on the road to growth, so it is important to focus on keeping your customers.

Creating Your “Womb-to-Tomb Strategy”
Marketing expert Regis McKenna tells us that traditional marketing is disappearing into the information and communication technology (ICT) world: computers, software and communication networks. In Total Access: Giving Customers What They Want in an Anytime, Anywhere World, he frames a discussion of what marketing is quickly becoming by stating that ICT will do most of the marketing activities, such as data gathering, decision making, customer response and care, and much more.

We advise that you should have woven throughout your venture, from front-office to back-office, a digital “womb-to-tomb” strategy for community management and community ownership. This closed-loop integration will give you the management tools to get your finger on the pulse of your venture for the entire cash-to-cash cycle.

You need to be monitoring from when you first invest in a new product or service, to when you get your first inquiries from customers. This continues through when each salesperson engages a customer in the sale titration process, to finally when you deposit the customer’s check in your bank account.

There are three levels of relationships each venture must maintain in the networked enterprise.

The first level is customer specific, of which eBay is an excellent example.

The second level is enterprise specific, which is structured around the roles that are found inside your organization. For example, Hewlett-Packard has one of the world’s richest intranets, featuring more than 100 news groups and many “knowledge bank” databases, which makes possible the global collaboration between their engineers.

The third level is strategic partner specific, which focuses on vendors and other stakeholders outside the organization. One of the best examples is Dell Computer. As a value advisor providing information and services, and in helping customers make the best decisions about computing technology, Dell gets real-time daily input from thousands of customers. This input regarding their products, service, and views on new product ideas gives Dell a sustainable competitive advantage in tailoring its product offerings. Also, this strong womb-to-womb connection from Dell’s customers to suppliers like Microsoft and Intel creates a formidable barrier to entry.

SOURCE: Roadmap To Entrepreneurial Success