Companies in every sector have streamlined their internal processes by integrating systems and el... more Companies in every sector have streamlined their internal processes by integrating systems and eliminating the manual activities once needed to coordinate the flow of information across the enterprise. Streamlining processes that involve interactions between companies has been more difficult, however: the automated connections that they currently forge with one another can funnel only certain types of information and require negotiations over the value of these expensive connections. Web services--new technologies that spring from the Internet and are used mostly to automate linkages among applications--might at last make such connections not only possible but also easy and cheap. Today, connecting systems inside a company (a procurement system and a finance system, say) can require the IT staff to write customized code that "glues" them together. Making connections between companies and their applications exponentially increases the job's complexity and cost. But thanks to the emergence of Web services, programmers can now write a layer of software that sits on top of an application and connects it to any other Web services-friendly application quickly, cheaply, and flexibly. In the new book Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow through Web Services, McKinsey alumnus John Ha gel argues that companies will use these technologies first at the "edge" of the enterprise--where business activities involve communications and transactions with other organizations, such as trading partners and customers. Companies that had better and cheaper connections with one another could gain cost savings in the short term and look forward in the longer term to collaborating more innovatively to give customers more value. The editors In the decade ahead, companies will pursue strategic opportunities and performance improvements abetted by a new generation of technologies called Web services. Such companies will adopt this novel approach at the edge of their enterprises, where they bump up against customers, dealers, and suppliers, as well as in activities requiring frequent interaction with any number of people and organizations--activities like customer support, marketing, procurement, and sales. As a result, these companies will forge connections among existing systems and applications less expensively and more rapidly and flexibly than they can using today's conventional technologies. Automating the flow of information between a company and its business partners has always been difficult and expensive. Many interactions thus require human intervention--for instance, employees who key into corporate systems the data retrieved from business partners through faxes, telephone calls, or even lists printed out from the systems of other companies--a practice that leads to human error. Furthermore, many companies maintain larger stocks of inventory than they really need, because the flow of information among partners in the value chains of most sectors just isn't efficient enough. Since activities near the edge of businesses abound in inefficiency, the opportunities for creating near-term value from Web services are substantial there, which makes it likely that companies will apply them in this way before using them to knit together core internal systems. Until now, though, integrating the systems of one company with those of its partners has been less feasible than integrating internal systems. Web services promise to change that. Better connections among trading partners are going to mean that companies will be able not only to streamline their edge activities but also to collaborate on improving internal processes, such as product development. But the real long-term prize of business collaboration lies in mobilizing the assets of partners to deliver more value to their customers. When cooperation among different businesses resembles the activity of a network, they can increasingly focus on innovation in their core activities, and the network becomes more efficient and flexible in what it can offer. …
Insights from organizations that are navigating the novel challenges of the digital workplace. Ho... more Insights from organizations that are navigating the novel challenges of the digital workplace. How can technology and analytics help companies manage people? Why do teams working remotely still need leaders? When should organizations use digital assessment tools for gauging talent and potential? This book from MIT Sloan Management Review answers questions managers are only beginning to ask, presenting insights and stories from organizations navigating the novel challenges of the digital workplace. Experts from business and academia describe what's worked, what's failed, and what they've learned in the new world of work. They look at strategies that organizations use to help managers and employees adapt to the fast-changing digital environment, from the benefits of wool-gathering to the use of anonymous chats; examine digital tools for collaboration, including interactive spreadsheets and analytics that increase transparency; and discuss such “big-picture” trends as expan...
A seemingly endless stream of books, articles, reports, and blogs make similar claims: The world ... more A seemingly endless stream of books, articles, reports, and blogs make similar claims: The world is flattening; the economy has picked up speed; computing power is increasing; competition is intensifying. Though we're aware of these trends in the abstract, we lack quantified measures. We know that a shift is underway, but we have no method of characterizing its speed or acceleration or making comparisons. Are rates of change increasing, decreasing, or settling into stable patterns (e.g. Moore's Law)? How do we compare exponential changes in bandwidth to linear increases in Internet usage? Without times series data and a methodology for integrating those data, we cannot identify, anticipate, or plan for change.
A brief glance at the evolution of strategic focus reveals dramatic shifts in relevant context wi... more A brief glance at the evolution of strategic focus reveals dramatic shifts in relevant context with potent implications for organization and control, rooted in the reversal of a century-old “long wave { XE "long wave "} ” centered on internalizing various economic activities to control them that gave rise to the integrated firm, the corporation and the conglomerate (Chandler, 1977; Chandler & Salsbury, 1974). Where companies from the mid-1860s to roughly the 1980s created strategic advantage by internalizing activities for greater stability, efficiency and control, increasingly since then advantage has centered more and faster learning and innovation (IBM { XE "IBM "}_Global_Services, 2006; Prahalad & Krishnan, 2008; Schramm, 2006). But no company can control all the resources needed for innovation (Prahalad & Krishnan, 2008), so creating strategic advantage has increasingly required collaborative, outsourced, strategic alliances
How online marketing could shift the balance of power loan scenarios A key issue information liqu... more How online marketing could shift the balance of power loan scenarios A key issue information liquidity Future competitors will include these who might capture information you want The history of consumer marketing during the past two decades reflects a growing realization that information about customers is a key competitive asset. Airlines have spearheaded the development of loyalty programs, which offer valuable incentives to airline passengers in return for the ability to capture much more detailed profiles of frequent flyers. Banks have invested heavily to integrate information systems that facilitate access to broad activity profiles of customer across the major product categories offered by a bank. Credit information bureaus have compiled detailed credit histories of individual consumers. And retailers have developed point-of-sale information to track product movements and improve merchandising and promotion programs. Yet much of the information marketers want most about consu...
Companies in every sector have streamlined their internal processes by integrating systems and el... more Companies in every sector have streamlined their internal processes by integrating systems and eliminating the manual activities once needed to coordinate the flow of information across the enterprise. Streamlining processes that involve interactions between companies has been more difficult, however: the automated connections that they currently forge with one another can funnel only certain types of information and require negotiations over the value of these expensive connections. Web services--new technologies that spring from the Internet and are used mostly to automate linkages among applications--might at last make such connections not only possible but also easy and cheap. Today, connecting systems inside a company (a procurement system and a finance system, say) can require the IT staff to write customized code that "glues" them together. Making connections between companies and their applications exponentially increases the job's complexity and cost. But than...
... Virtual Communities – Towards a ... Figure 4. The B2C virtual communities efficiency funnel I... more ... Virtual Communities – Towards a ... Figure 4. The B2C virtual communities efficiency funnel Index 100 visits Source: McKinsey e-performance ...
Companies in every sector have streamlined their internal processes by integrating systems and el... more Companies in every sector have streamlined their internal processes by integrating systems and eliminating the manual activities once needed to coordinate the flow of information across the enterprise. Streamlining processes that involve interactions between companies has been more difficult, however: the automated connections that they currently forge with one another can funnel only certain types of information and require negotiations over the value of these expensive connections. Web services--new technologies that spring from the Internet and are used mostly to automate linkages among applications--might at last make such connections not only possible but also easy and cheap. Today, connecting systems inside a company (a procurement system and a finance system, say) can require the IT staff to write customized code that "glues" them together. Making connections between companies and their applications exponentially increases the job's complexity and cost. But thanks to the emergence of Web services, programmers can now write a layer of software that sits on top of an application and connects it to any other Web services-friendly application quickly, cheaply, and flexibly. In the new book Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow through Web Services, McKinsey alumnus John Ha gel argues that companies will use these technologies first at the "edge" of the enterprise--where business activities involve communications and transactions with other organizations, such as trading partners and customers. Companies that had better and cheaper connections with one another could gain cost savings in the short term and look forward in the longer term to collaborating more innovatively to give customers more value. The editors In the decade ahead, companies will pursue strategic opportunities and performance improvements abetted by a new generation of technologies called Web services. Such companies will adopt this novel approach at the edge of their enterprises, where they bump up against customers, dealers, and suppliers, as well as in activities requiring frequent interaction with any number of people and organizations--activities like customer support, marketing, procurement, and sales. As a result, these companies will forge connections among existing systems and applications less expensively and more rapidly and flexibly than they can using today's conventional technologies. Automating the flow of information between a company and its business partners has always been difficult and expensive. Many interactions thus require human intervention--for instance, employees who key into corporate systems the data retrieved from business partners through faxes, telephone calls, or even lists printed out from the systems of other companies--a practice that leads to human error. Furthermore, many companies maintain larger stocks of inventory than they really need, because the flow of information among partners in the value chains of most sectors just isn't efficient enough. Since activities near the edge of businesses abound in inefficiency, the opportunities for creating near-term value from Web services are substantial there, which makes it likely that companies will apply them in this way before using them to knit together core internal systems. Until now, though, integrating the systems of one company with those of its partners has been less feasible than integrating internal systems. Web services promise to change that. Better connections among trading partners are going to mean that companies will be able not only to streamline their edge activities but also to collaborate on improving internal processes, such as product development. But the real long-term prize of business collaboration lies in mobilizing the assets of partners to deliver more value to their customers. When cooperation among different businesses resembles the activity of a network, they can increasingly focus on innovation in their core activities, and the network becomes more efficient and flexible in what it can offer. …
Insights from organizations that are navigating the novel challenges of the digital workplace. Ho... more Insights from organizations that are navigating the novel challenges of the digital workplace. How can technology and analytics help companies manage people? Why do teams working remotely still need leaders? When should organizations use digital assessment tools for gauging talent and potential? This book from MIT Sloan Management Review answers questions managers are only beginning to ask, presenting insights and stories from organizations navigating the novel challenges of the digital workplace. Experts from business and academia describe what's worked, what's failed, and what they've learned in the new world of work. They look at strategies that organizations use to help managers and employees adapt to the fast-changing digital environment, from the benefits of wool-gathering to the use of anonymous chats; examine digital tools for collaboration, including interactive spreadsheets and analytics that increase transparency; and discuss such “big-picture” trends as expan...
A seemingly endless stream of books, articles, reports, and blogs make similar claims: The world ... more A seemingly endless stream of books, articles, reports, and blogs make similar claims: The world is flattening; the economy has picked up speed; computing power is increasing; competition is intensifying. Though we're aware of these trends in the abstract, we lack quantified measures. We know that a shift is underway, but we have no method of characterizing its speed or acceleration or making comparisons. Are rates of change increasing, decreasing, or settling into stable patterns (e.g. Moore's Law)? How do we compare exponential changes in bandwidth to linear increases in Internet usage? Without times series data and a methodology for integrating those data, we cannot identify, anticipate, or plan for change.
A brief glance at the evolution of strategic focus reveals dramatic shifts in relevant context wi... more A brief glance at the evolution of strategic focus reveals dramatic shifts in relevant context with potent implications for organization and control, rooted in the reversal of a century-old “long wave { XE "long wave "} ” centered on internalizing various economic activities to control them that gave rise to the integrated firm, the corporation and the conglomerate (Chandler, 1977; Chandler & Salsbury, 1974). Where companies from the mid-1860s to roughly the 1980s created strategic advantage by internalizing activities for greater stability, efficiency and control, increasingly since then advantage has centered more and faster learning and innovation (IBM { XE "IBM "}_Global_Services, 2006; Prahalad & Krishnan, 2008; Schramm, 2006). But no company can control all the resources needed for innovation (Prahalad & Krishnan, 2008), so creating strategic advantage has increasingly required collaborative, outsourced, strategic alliances
How online marketing could shift the balance of power loan scenarios A key issue information liqu... more How online marketing could shift the balance of power loan scenarios A key issue information liquidity Future competitors will include these who might capture information you want The history of consumer marketing during the past two decades reflects a growing realization that information about customers is a key competitive asset. Airlines have spearheaded the development of loyalty programs, which offer valuable incentives to airline passengers in return for the ability to capture much more detailed profiles of frequent flyers. Banks have invested heavily to integrate information systems that facilitate access to broad activity profiles of customer across the major product categories offered by a bank. Credit information bureaus have compiled detailed credit histories of individual consumers. And retailers have developed point-of-sale information to track product movements and improve merchandising and promotion programs. Yet much of the information marketers want most about consu...
Companies in every sector have streamlined their internal processes by integrating systems and el... more Companies in every sector have streamlined their internal processes by integrating systems and eliminating the manual activities once needed to coordinate the flow of information across the enterprise. Streamlining processes that involve interactions between companies has been more difficult, however: the automated connections that they currently forge with one another can funnel only certain types of information and require negotiations over the value of these expensive connections. Web services--new technologies that spring from the Internet and are used mostly to automate linkages among applications--might at last make such connections not only possible but also easy and cheap. Today, connecting systems inside a company (a procurement system and a finance system, say) can require the IT staff to write customized code that "glues" them together. Making connections between companies and their applications exponentially increases the job's complexity and cost. But than...
... Virtual Communities – Towards a ... Figure 4. The B2C virtual communities efficiency funnel I... more ... Virtual Communities – Towards a ... Figure 4. The B2C virtual communities efficiency funnel Index 100 visits Source: McKinsey e-performance ...
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