Tag Archives: Supply Chain Management

My Nostalgia Trip to Pre Social Business

As part of my unlearning and learning process towards better understanding of Social Business I’ve been thinking back the time I worked for a Swedish Supply Chain Management (SCM) company IBS.

Yes, I am recalling the attempts we made in order to build a platform for a global wholesale distribution, the concept was called as Virtual Enterprise.

It is now most interesting to follow the discussion about social business design and to find many similar perspectives.

Simultaneously with The Power of Pull, a warmly recommended read, I have been re-reading older European research about business process design (pdf), written by two Swiss gentlemen Elgar Fleisch and Hubert Österle. Already eighteen years ago (!) in 1993 they created an interesting concept of Integration Area that refers to organizational processes which are characterized by high dependency, and therefore require a high degree of coordination.

They discuss the complexity of inter-organizational networking which is associated with human interaction, organization structure, and the culture. In order to reduce this complexity, Fleisch and Österle presented the Coordination Areas. The five coordination areas that are highly dependent of each other are: Supply Chain Management, Relationship Management, Innovation, Infrastructure, and Organization Development.

Here below their model for inter-organizational networking for complex environments:

Coordination Areas. Source: Fleisch & Österle (2000)

The difference between these two concepts is that the integration area pursues integration through integrated information processing, while the coordination area pursues integration through the organization of dependencies.

Related to the latter, organization of dependencies, an interesting parallel could also be drawn to the systems theory and its qualitative determinants. Two system determinants, attributes of the elements and the degree of the organization among system elements, employ the same kind of complex dependencies.

Fleisch & Österle also used a notion of networkability:

“The inter-organizational dependencies within coordination areas are contrasted by the intra-organizational dependencies across areas. Both play a decisive role in the networkability structure of businesses.”

It is easy to find confluence. After reading some of the recently published books related to the social business and comparing the models and messages in those to this older research – you can find many themes that are in common.

Good old SCM and the Social Business

Fleisch & Österle state that coordination of business processes have to cover both outputs and all associated design areas such as process, IT, people, organization structure, and culture. The efforts my company made 10-15 years back, associated with Supply Chain Management, were directed towards this kind of coordination of the inter-organizational processes.

Yes, there’s a clear connection between these SCM development efforts and Social Business/Enterprise 2.0! Exactly as Jacob Morgan tweeted while ago.

Here’s few more pickings from the nostalgia period research (1997-2001):

Fleisch and Österle developed a model called “Five computerization phases towards business networking”. They describe an integration area as an indicator of the degree of “informatization” of an organization. The size of integration area is growing while technology develops. Well, this reminds me of Enterprise 2.0 when seen from a tool & information perspective. However, their model was not yet very social one.

Some of the nostalgic themes of that time were:

  • On the tool side, the new portal technologies as the tools to give a common view of supplier relationship related information and system integrations for integrated processes. For example information stored in the ERP, CRM and Human Resource systems. Very much system and information flow centred approach.
  • On the process side, the concept of Supplier Relationship Management (SRM) was a hot topic as the supplier relationships emerged and companies wanted to create a strategically managed structure around their supplier relationships. In 2001 Gartner Group stated about SRM as follows: “[…] this goes beyond e-procurement and strategic sourcing to embrace the collaborative creation and management of supplier-enterprise products and processes.”

A bit like pre Social Businessian, isn’t it?

Summarized it can be said that the focus were clearly around the processes, work flows and managing information within the processes.  Some initial ideas for the collaboration on the individual level were present, but were still rare in the businesses. What was missing then was naturally the emerging new communication culture and the possibilities enabled by social media – to connect, discuss, and to create value also on the individual level.

From a System Level to a Human Level & The Power of Pull

The focus is now broadening from the system level to the human level: how individuals communicate, interact and create value together has become essential. The core concepts have changed from the pure process view with task descriptions, detailed instructions and strict control towards empowerment of people, enhanced interactions inside and outside of the own organization, away from the information/knowledge silos – all this supported by the new kind of social technology.

However, there’s much to do. Firstly, we are still often calling people as resources or assets, sigh! We do have Human Resources departments, like people were parts in a machine. And secondly, social media is often reduced to a set of tools only.

One of the best readings on the topic is the latest book of John Hagel, John Seely Brown & Lang Davison. They present a Pull approach with which you can turn uncertainty into opportunity, and further enable small moves to make a huge impact. The Pull approach consists of three levels:

  • At the most basic level, pull helps us to find and access people and resources when we need them.
  • At a second level, pull is the ability to attract people and resources to you that are relevant and valuable, even if you were not even aware before they existed.
  • Finally, the third level of pull – the ability to pull from within ourselves the insight and performance required to more effectively achieve our potential.

I do believe that the Pull approach enables us to learn faster and translate what we’ve learned into improved performance; the performance of ourselves but also the people we connect with.

One driver for this nostalgia trip was actually this sentence in their book:

“These three levels of pull go far beyond the “on-demand” focus of technology industry in recent years. On-demand initiatives generally seek to facilitate the first level of pull, but they have very little to offer regarding the second and third levels of pull.”

I fully agree with them.

I will continue to study social business design and how to use the power of pull to access new sources of information, to attract like-minded individuals, and to shape serendipity to increase the likelihood of positive chance encounters.

Still much to learn for a Serendipity Hippie like me. The passion will help me on the way.

PS.  Dachis Group describes the Social Business Design in a way I like a lot. Their model covers how customer can participate in the value creation, how to enhance collaboration, and how to rethink and optimize the value network. The latter – Business Partner Optimization – is quite close to the Virtual Enterprise concept I was working with in the end of the 90’s. It is fascinating to notice how the basic ideas of social business have been around for a long time, and now finally becoming part of our daily business.

Related reading from Dave Grey of Dachis Group – The Connected Company.


Playing Social with Words

A quick post about playing with words, notions and associations, and about what I did 10 years ago – and in the end of the post I make a promise!

 

Years ago I was in Supply Chain Management business, and now my startup is developing a SaaS application for businesses, in a #E20 style. That is why I am very curious about Social CRM, SCM and Enterprise 2.0.

Two recent ‘good bits’ started a thought process: 1) Jacob Morgan’s tweet and 2) Seth Godin’s fantastic post.

Seth Godin wrote about “the pleasant reassurance of new words”:

“It’s a lot easier for an organization to adopt new words than it is to actually change anything. Real change is uncomfortable. If it’s not feeling that way, you’ve probably just adopted new words.”

I do agree, seen that happen.

Jacob Morgan tweeted about how we are using new words for something that has been around for a long time:

 

What Seth is saying and what Jacob points out reminds me of two examples of how words are getting new lives – gently or with some violence – or how old and new denotation can live side by side:

Social Business

One example of the phenomenon Seth referred to could be the use of the notion of ‘Social Business’ by the big (legacy) players. In an interesting Forbes article ‘Shining the Limelight on Social Business Services’, by Rawn Shah, he describes how the large vendors are looking for different approaches to integrating collaborative capabilities into the IT infrastructure. In addition he points out an important issue:

“However, it’s important to see that social business is not simply a software one. It is a business transformation involving organizational culture, enterprise business processes, customer relations, and workforce behavior just as much as it is a change to the enterprise IT infrastructure.”

He continues with wise words:

“While it may be relatively easier to push technology onto users, transforming business culture takes much more convincing: changing attitudes to do work in a social space, changing task and workflow behavior, changing motivation and compensation models, changing business metrics and KPIs, changing customer facing processes, working through longer adoption cycles, and ingraining a culture of collaboration. This involves a different lens than just the IT department—it can involve HR, business management, customer service, product development and innovation. Hence, to develop a mature social business, you will need to explore how it applies to these respective areas—this is where consulting services can provide guidance.”

Indeed important, a trinity of the people, process & technology. A very timely topic I’ve touched on in my earlier post ‘A job for a Silo Integrator?‘.

Lean

For me the word lean still denotes strongly to the Japanese car industry! Yes, I worked in a Swedish Supply Chain Management company at that time and the local car and machinery industry was actively applying lean production. And I still recall ABB Sweden’s T 50 project (cutting troughput time by 50%) quite well.

We have seen a clever reuse of the notion ‘lean’. As a startup entrepreneur I do like a lot Eric Ries’s Lean Startup philosophy. His work was presented in Wall Street Journal with these words:

“Mr. Ries’s Lean Startup philosophy aims to help new companies make speedier decisions by taking a more disciplined approach to testing products and ideas and using the resulting customer feedback. “

I definitely want to study Eric’s philosophy and writings in more detail, and maybe I get rid of the Toyota association.

Social Business Process Management

Back to Jacob Morgan’s tweet – what he asked in his tweet gave me an idea: Social Business Process Management! I thought I had invented a new notion, I googled, and of course found a nice post about Social BPM written in June 2010 by Joe McKendrick. In the post McKendrick describes his discussions with Forrester Research analyst Clay Richardson, and shares some SBPM aspects: the need for increased end-user involvement, better understanding and assessing the capabilities, and how the communication and coordination issues between the teams are challenging in many organizations.

Ok, enough playing with words.

What did I write 10 years ago?

What makes me very excited is the fact that I have written about these issues 10 years ago. And forgotten most of it! I just found and browsed through my old Master thesis (from 2001) with the title Value Creation in the Integrated and Collaborative Business Processes. I am reading it now in order to find out how “Enterprise 2.0” my old work is. With quick browsing I saw quite many fitting E 2.0/Social Business key words. And the Analytical Framework which summarizes the thesis is not totally bad.

So, my promise to you is:

As soon as I have had time to write down couple of thoughts around it, I will post again and also, if you like, share the thesis with you. It’s not a masterpiece, but might be of interest for some of you.

PS. Does adding prefix ‘social’ remind you of adding the little e? eCommerce…


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