“Business Network Transformation—Strategies to Reconfigure Your Business Relationships for Competitive Advantage” published by Jossey-Bass is the new book edited by Jeffrey Word. The book comprises 11 chapters contributed by leading scholar and industry practitioners in the area of networked businesses together with an introduction by the editor (cf. Fig. 1). The renowned authors include Marco Iansiti, Mohanbir Sawhney, John Hagel III, Henry Chesbrough, and Andrew McAfee, to name but a few. The book is a collaborative effort of these scholars to explore and analyze Business Network Transformation (BNT), a process which describes organizations transition from independent organizations to highly networked companies. In a time of accelerating business change and increasing interconnection of organizations, these business networks provide a new source of competitive advantage for companies. Driven by increased specialization, companies become better at what they do best and focus on achieving higher returns on capital. To achieve this specialization, companies extend their business networks. They not only rely on partners to take on non-core activities to funnel resources into innovative activities but also to collaborate with partners for new product/service development and new ways to enter attractive markets. To achieve this, the authors argue, companies are required to build new competencies in managing collaborative relationships with well understood process handoffs, information access, and service-level agreements; appropriate checks and balances on product quality; and visibility into risk and performance across the business network. The emerging concepts around business network transformation have been studied over the past several years from various angels. The chapters in the collection aim to cover a broad scope including what is happening to traditional value chains, how companies are impacted by the transformation, who is successfully adapting and thriving in the new environments, and where this evolution is headed. The collective assumption of the book is not the question “if” but “when” and “how powerful” organizations have to deal with BTN. Chapter one (by Philip Lay and Geoffrey Moore) sets the theme of BNT by looking at global trends of globalization, context networks (i.e., outsourcing within the value chain) and core networks (i.e., collaboration for innovation). The chapter then describes different types of networks to enable the necessary collaboration. In particular, the stress on the enabling and necessary IT systems is emphasized such as platforms, composite applications, and on-demand concepts. Chapter two (byMarco Iansiti and Ross Sullivan) continues to explore the topic by looking at how BNT is transforming companies. Five guiding principles are proposed: (1) create superior customer value, (2) design for adaptability, (3) plan for scalability, (4) encourage participation, and (5) develop government frameworks. It gives examples of BNT in action using three short case studies of Novartis, Hugo Boss, and NVIDIA. The next chapter (by Mohanbir Sawhney and Ranjay Gulati) explores customer collaboration and open innovation to satisfy increasing demand for innovative products. Here, six capabilities are necessary for success: (1) reach, (2) C. Riedl (*) Technische Universitat Munchen, Boltzmannstr. 3, 85748 Garching, Germany e-mail: riedlc@in.tum.de
Read full abstract