CyberCorporation
Home ] Up ] [ CyberCorporation ] Chairman Resume' ]

 

Alamco Business Model

Electronic Commerce as business Strategy

Cybercorp The New Business Revolution 

by Napoleon Toquero Submitted to Dr Bernard Glasson , Requirement for EC561-Curtin University of Technology, Masters of Commerce (Electronic Commerce) November 1998.

Summary

The book is all about survival strategies in re-inventing the corporate organisation adding to the equation the maximum use of the advancement of technologies in Electronic Commerce. The advancement centres on microelectronics, cyberspace, cybernetics and the Internet super-highways that dramatically enhanced how an organisation communicates and interrelates with the rest of the world. The rest of the world includes its customers, its competitors, its partners, its suppliers, investors, and relevant information about its environment or ecosystem in which it will survive.

The book is organised in three parts. Part I of the book defined what a Cybercorporation is. Part II of the book defines the characteristics of a Cybercorporation. Part III of the book tries to study its impact on people and on management.

[UP]

Cybercorp Predator

As an analogy, a cybercorp as an electronic organism with jungle creature of prey (predator) like characteristics. The corporate organism has a clearly defined objective or prey. It has keen sensors to understand the ecosystem or the environment it has to thrive and hunts and remains constantly alert so that it may adapt to take advantage of changes. With its keen sensors (electronic feedbacks, data mining, intelligence etc) it knows and continuously learns the behaviour of the prey in real time. An important point is that we are in a time of rapid change, and the Cybercorp must be "optimised" in order that it may take advantage of change; further, we are in an era of instant gratification and "just-in-time everything".

Value Stream Idea

The successful hunt is an efficient interfunction or interworking of the components that make up the jungle creature. The components (Value Streams) need not be perfect but must be efficient in performing its task in relation to whole in the attainment of the objective. The value stream need not be owned because it can be virtual. Virtual means that an ally or partner can own it or it can be hired. The important thing is that the value stream (service or the component) performs its function effectively when required in the hunt. The partner may even be a competitor of the Cybercorp in some area.

[UP]

Dominate the Ecosystem

To gain dominance and excellence in what it does, it has to study and analyse its value streams to learn where it excels above the rest of other jungle creatures (competitors) in its ecosystem. This strategic value stream has to be the object or focus of enhancement and sharpening to a point of extreme excellence. This is what will separate this predator (CYBERCORP) from the rest of the pack. If the prey is large and difficult (e.g. BHAG or big hairy audacious goal or its wants to position itself to dominate the ecosystem) it teams up with other predators, (in a permanent or dynamic virtual relationship) into a powerful, well-organised and coordinated hunting pack. It orchestrates the skills of its allies to its advantage in a manner that it seems to others as its own (virtual -- David and Goliath paradigm).

 The Agile Hunter

Its goals are clear. Its desire to dominate its ecosystem is clear. Its methods and strategies are clear but changing effectively, quickly as it senses changes in the environment and the prey’s behaviour (agile), as these are perceived by its powerful sensors (research, electronic feedbacks, artificial intelligence, data mining, intelligent agents network etc). With its understanding of the ecosystem and the behaviour of its prey, it adjusts its speed and strategies according to changes in the ecosystem and the events. This is the nature of the cybercorp beast.

[UP]

The facts

Cybercorp is characterised  as a corporation that takes full advantage of the cyberspace revolution – agile, virtual, global, cybernetic. A Cybercorp employs maximum use of technologies in microelectronics, cybernetics and the Internet super-highway.

Character of a Cybercorp

Cybercorporation have a keen understanding and takes advantage of -- Cybermarketing: An inversion of traditional marketing norms. Modern electronics is changing the nature of marketing and inverts most of the traditional wisdom. Value Streams: Creature within a creature. The purpose of every component is clear and measurable. The value stream cut across traditional departments and function areas and may even cut across other organisations. Predator Value Stream: Creating competitive strength by focusing and sharpening it most strategic value stream. Virtualness – exploits virtual relationships, virtual products, virtual operations which gives the appearance of something which in reality does not exist – eg look like a single organisation, but, in fact many working together. Network Agility – has electronic (web) links to other partners to virtual organisation can be assembled and disassembled dynamically to seize new opportunities. The relationship can be static or dynamic – to suit the purpose. Ecosystem is the cybercorp: cybercorp become linked in into cross-industry ecosystem. Survival depends on understanding the ecosystem and managing its relationships. The David Syndrome: Small new comers are beating the Goliaths. (As in the case of Bill Gates vs IBM in the race for control in the IT industry. Computerised Choreography: Use of computers to coordinate functions of value streams.Counterintuitive behaviour: Artificial intelligence. Beyond Darwin: Successful cybercorp evolve change and learn at a very fast pace. Experiments: Parts of the cybercorp need to be designed as learning laboratories.

[UP]

Realities of Business

Business either innovate or stagnate. Under the new environment stagnation is the same as corporate demise. Learning must be continuous. The competition in the cyber era is intense. The pace of technology advancement and obsolescence is fast - very rapid frequency of change in a very dynamic environment. Small new comers are beating corporate Goliath in some cases with astonishing rate because they do not have the overheads and built-in inflexibility and burdens of large corporations. Software agents are needed to carry out actions for us in the Cyberspace due to the overwhelming volume of information and information overload. The cost of obsolete thinking can be enormous. This is referring to the arthritic nature of old established organisations. A case in point is IBM – they are not able to move quickly enough to maintain dominance of the eco-system. Only 20% of value stream effort contribute 80% of the total the outcome (Pareto’s Law as it applied to traditional business situations.) Only 10% of value stream effort of a Cybercorp contribute 80% of the total outcome. ( a skewing of Pareto’s Law). The traditional corporate ladder (promotion) is gone.

 

Feelings and Emotions

The James Martin’s book on Cybercorp draws a mix emotional reaction. The idea of Cybercorps dominating the ecosystem to survive draws a tense feeling about the future. To corporations and future workers, it is like an anticipation of the lost of innocence as they march towards a Cybercorp war.

[UP]

Corporate Casualties

Corporate casualties are organisations, which "go under" as a consequence of fierce competition. In most cases many corporations will not survive the Cybercorp eco-system which is characterised by Business environment that is tense. Any corporation vulnerable to corporate raiding of strategic values stream. When one corporation produces good idea others can copy it quickly due to the inadequacy to protect idea via copyrights patents and likes. Information passes around the world at electronic speed. Cybercorps, in their desire to control the eco-system will forever be cream skimming or raiding of strategic value stream. Somewhere along the line, in an environment like this – any corporations tire and not survive the hostile environment.

[UP]

Positive Implications

Competition will drive the price low and improve quality to the benefit of the consumers. The customer is a big influence in telling the Cybercorp what they want. They get individual focus. Small start-up corporations can upstage old establish one by simply getting smarter. (David and Goliath struggle). Davids do not have the overheads of large established organisations and have not lost their ability to think outside the box. It benefits the small companies because of low entry cost to access to global market via the Internet infrastructure. This enables small companies to have global exposure. Internet also breaks down the geographical and time barriers. Business environment will be more thrilling to the individual components of a value stream. More instant feedback and gratification to the customers and Cybercorps. This is what people demand and will get. Less expensive operation because of the use of cyberspace, cyber technologies. There is however start-up costs and significant effort in establishing and implementing technologies and transforming the organisation to Cybercorp.

[UP]

What is Creative?

The Virtual Concept

The idea of being virtual (virtual organisation, virtual relationship, virtual products), strategy is creative. Virtual Offices: People (electronically linked) can work in virtual space, which is devoid of geographical location and time. (not constrained by geography or time). Virtual Board: A board member need not be physically in the board meetings. They can be electronically linked in a secure e-mail and "chat" or debate the issues. (advantage of reducing ‘wasted’ time and jet lag; increased responsiveness of organisation). Virtual Research organisations.

The Partnering Strategy

Partnering: Promotes close cooperation (partnering) to provide lower cost and better service. One example is to tap resources of low-income countries as virtual extensions of corporations in high-income countries. (this may result in a shift of power – perhaps even a re-balancing of economies). Web: Cybercorp webs are group of companies with an agreement that they can quickly form a virtual company in order to seize a market opportunity. The idea of teaming closely with value chain is creative. Innovation is limited, not by the availability of good ideas, or technology, or capital, but by the ability to command cooperation among the ecosystem players. This refers to the creativeness of establishing non-traditional links and web across an organisation and across organisations.

The Corporate Amoebas

The best strategy for Aging Corporation is to spin off new Cybercorps. The idea of old corporations giving birth to virtual puppies (corporate amoebas) is creative. This frees the ‘puppy’ from arthritic nature of the ‘parent’. We are entering an age when many executive realise that instead if attempting to re-engineering arthritic corporations it is far better to create brand new Cybercorp (puppies), designed for fast growth. Experiment: Parts of the Cybercorp need to be designed as learning laboratory. The Cybercorp is constantly learning at the steepest possible learning curve. How do you design it to learn as rapidly and profitably as possible and modify its behaviour accordingly?

[UP]

New Business Paradigms

Internet: The Internet and Intranets provide a means for total redesign of corporate communication channel and structure and for new form of inter-corporate relationship. This provides many advantages, including productivity gains. Enhance critical Value Streams: Successful Cybercorp focus intensely on the most critical value stream. How can you design strategic capabilities that are world-beaters and how are this value stream enhanced by cyberspace. Entrepreneurs or relatively small companies can create ambitious plans achievable by linking the right virtual partners. (BHAG – Big hairy audacious goals - are not exclusive to large corporations). With job security gone, employees must engage in continuous learning process. The new deal is "You own your own employability. You are responsible for your own job security". It may become typical in the future that employees that are uniquely valuable and those who would be expensive to replace are stockholders of the company they work for. To get advantages over competitors the learning curve must be very steep and must go to the highest point in the shortest possible time. Competition will be based on knowledge rather than tangible assets. Non-traditional: Organisations may form alliance with other organisations that may be their competitors. Suppliers may place a person in the receiving organisation’s factory (for example) and may provide each other with access to data, design to promote coordination and closer relationship. This is a non-traditional (hence creative) way of doing business. Agents and Intelligent documents: Use computer programs to form part of the human team. Humanising the machines

 

Conclusion

Survival Strategy: In order to survive the next century, become a Cybercorp. Every business needs to think Cybercorp. Success and survival of the company depends on understanding of the ecosystem and managing relationships. If the old organisation is too rigid to change, evolve cyber corporation puppies out of it

[UP]

Think Value Streams

The key to designing the most effective Cybercorp operation is to think of corporate activities as value streams, whose benefits are clear and measurable. Value streams that are critical to the competitive position of the Cybercorp have to be owned and sharpened constantly. This value stream refers to the creative and proprietary areas. Value Streams that are not critical and can be done better by partners will be outsource.

Think Virtual: Managers should think in terms of virtual operations, virtual office space, virtual board, and corporations that use a web of virtual relationships.

Build Effective Staff

Cybercorp architects, rather than try to suppress emotions because they gum up the works, should create ways to use emotions to release energy, pride, determination, excitement, and the thrill of excellence. There is a big gap between IT technical (technies) and the business world. This should be fused together in the design of the Cybercorp. The Cybercorp world has to meld the alien culture of technies and business people, which are growing far apart. Cybercorp virtuosos (genius with computers) are assets that need to be looked after. Managers need to be able to spot them and develop them. Cybercorp should be designed and managed, as far as possible, so those employees are having fun. People and creativity are the most important assets of a corporation. Management needs to carefully address fears and dysfunctional behaviours.

Think Research

The only sustainable competitive advantage will become the ability to learn and adapt faster than one’s competitor. The cybercorp must learn fast at all levels and implement the results of its learning. The gestation from concept to cash should be short. Many computer professionals focus intensely on making electronics and software works, but not how to create business with IT (Cybercorp) values.

[UP]

Innovate or Stagnate

Organisation that do not adapt and take advantage of technology will fail. Innovate or stagnate. In a Cybercorp environment stagnation is equivalent to corporate death. What is the right way to make Cybercorp transition? This is something which organisations will have to think about – and be very creative about. Also, they will need to understand what it is they have to offer – what their strengths are. 

 

by Napoleon Toquero

[UP]

 

Content

Cybercorp Predator

Value Stream Idea

Eco System Dominant

Agile Hunter

Business Realities

Corporate Casualties

Virtual Concept

Partnering Strategy

Corporate Amoebas

Think Value Stream

Build Effective Staff

Think Research

Innovate or Stagnate