Interview about Value Network
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eBuilder’s senior vice president of Product Management, Mikael Ekström, discusses what a value network is and why it’s important to “take control” of it…. Mikael Ekström: Today, more and more parts of a company’s critical business processes are under the control of collaborating business partners, that is, they are outside the direct control of your company. For example, different parts of a process can be controlled by transport companies, suppliers, re-sellers, repair centers, and finance companies. This is a result of enterprise specialization — a concentration on an enterprise’s core competencies, which entails the outsourcing of that which is not a core competency of your business. This drastically changes the need and the methods used to control the business process for what we call the value network. eBuilder uses the term "value network" rather than the more common term "value chain" because a value network reaches beyond the sphere traditionally associated with a value chain, and at the same time it is multidimensional. While a value chain traditionally relates to a single chain of activities and usually applies to one firm operating in a specific industry, a value network is multienterprise and spans over the industries of the numerous e-commerce partners that participate in an end-to-end collaboration. |
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| Thus a value network includes the numerous business processes carried out by the many collaborating partners that contribute to and make up the value network. So, the first thing to note is that you have a more or less serial, unidirectional flow of activities from one collaborating business in the chain to the next. And the flow is made up of a chain of mutually dependant activities, for example: sourcing, manufacturing, distribution, and aftermarket processes. That is, a set of activities making up processes in an end-to-end flow.
Why is it difficult to control a value network? ME: Gains in expertise (and hopefully efficiency) in many currently outsourced activities (business processes) were made at the cost of significantly diminished control, manageability, and visibility over the entire flow in the value network from end to end. When you think about it, you quickly realize the difficulties in controlling, to say nothing of automating, optimizing, and making visible, the activities carried out by businesses that are completely independent of your business. Traditional methods and tools originating from ERP and best of breed initiatives are by no means sufficient to manage the widely-distributed, business-critical resources in the value network. And I am sure you have understood that the poor transparency and difficult synchronization of activities leads to rising costs. Nor can you, for example, dictate to a value network partner which ERP system they should use, or, for that matter, dictate the use of any other system solution under their control. You could, however, decide to integrate with them, but this will be mind-bogglingly complex and, with traditional methods, very expensive, especially if there are thousands of value network partners. eBuilder's Cloud Processes integrate and automate the business processes of the entire value network — all the collaborating parties and their relevant systems. This gives you end-to-end control driven by the business logic and rules configured in the Cloud Process. It gives you end-to-end visibility of the entire value network based on real-time information and access to all key master information, whether it resides inside or outside your own organization. Our Cloud Processes contain business process networks made up of thousands of ready-made integrations to business partners. |
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What are the concrete advantages of end-to-end integration and automation of the value network in the Cloud? ME: Cloud Processes for the value network give the organization, including the IT department, an opportunity to implement a strategy for seamlessly integrating all external business parties (the value network), a strategy that complements the existing ERP and IT infrastructure investment while extending the enterprise-wide business processes into the value network. In the short term, this lowers IT costs and enhances the value of existing investments because the Cloud Processes generate a clear and visible business value within a short period of time. What is eBuilder's track record for implementing control of value networks? ME: During the past decade, eBuilder has successfully enabled numerous multinational companies and Nordic public sector organizations to take control of their value networks (multiple value chains). Today we serve over 120 customers in over 50 countries. These customers together have over 500,000 end users employed in more than 200 legal entities. They collaborate with more than 5,000 partners in their value networks using 10 languages. For example, for the After Sales value network we can provide the following integrations to cooperating business partners (and as you can see below, the number of integrations is growing steadily): Point Of Sales (Retailers and Operators) Logistics Hubs/Warehouses Service Centers Carriers eBuilder is unique in providing a suite of Cloud Processes built on the same technology platform, where the customers leverage the total infrastructure and pay only for their individual use as a transaction fee. eBuilder delivers its Cloud Processes in a standard form – the Community Editions, which are upgraded/improved four times per year based on eBuilder's product roadmaps and input from customers and other participants in their value networks. If a customer needs to implement a unique business process, we implement it as a Customer/Customized Edition and base it on the Community Edition, thus exploiting the advantages of the vigorously reality-tested components of our standard Cloud Process technology. Cloud Processes for the value network enable management to take control of the complex end-to-end business processes and automate the basic interaction among its participants. At the same time, they shorten the lead times in value added activities and the lead time when changing business rules and participants in the value network. To sum up, our Cloud Processes give you significant multidimensional improvements in the way you run your enterprise. Simply stated, eBuilder gives you business excellence, delivered. Mikael Ekström is senior vice president of Product Management of the eBuilder Group. Mikael brings with him more than 20 years of experience in working with R&D, professional services and product management in international technology and services businesses. |
