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In order to defend themselves against commoditization and disruptive innovation, leading companies are now gaining competitive advantage through networked business models and tapping into talent from outside their company. Rather than implementing rigid "built-to-last" processes, organizations are now constructing more fluid "built-to-adapt" networks in which each member focuses on its differentiation and relies increasingly on its partners, suppliers, and customers to provide the rest.
With contributions by the biggest names in business network transformation, this book offers cutting edge research and an in-depth exploration of critical topics such as customer value, supply networks, product leadership, global processes, operations, innovation, relationship management, and IT.
The book also provides practical guidance for successfully engaging in BNT, and is filled with illustrative case studies from some of the world’s largest and most successful companies. It contains the vital information business leaders need to enable their companies to deliver faster innovation to customers at lower cost by sharing investments, assets, and ideas across their business networks. An essential resource for all business leaders, Business Network Transformation shows how to transform any business network to achieve competitive advantage and increase the bottom line.
Contributors include Geoffrey Moore, Philip Lay, Marco Iansiti, Mohan Sawhney, Ranjay Gulati, David Kletter, Venkat Venkatraman, John Hagel III, John Seely Brown, Gautam Kasthurirangan, Randall Russell, Henry Chesbrough, Jeffrey Dyer, and Andrew McAfee.
- Sales Rank: #2925239 in Books
- Published on: 2009-08-17
- Original language: English
- Number of items: 1
- Dimensions: 9.30" h x 1.10" w x 6.45" l, 1.10 pounds
- Binding: Hardcover
- 304 pages
Review
"Operational excellence can no longer be achieved by focusing only on a company's internal resources. Companies today operate with tightly-linked global business networks. This book provides managers with vital insights on how to achieve alignment and process efficiencies across their entire virtual organization of suppliers, customers, complementors, and alliance partners."
—Robert S. Kaplan, Baker Foundation Professor, Harvard Business School and chairman, Professional Practice, The Palladium Group
"This book makes the connection between the wave of new technologies and their ability to create entirely new value throughout a business network. It's about the creation of revenues and profits by working in a wholly different manner with your extended business network. If you have to pick one book to get the whole picture on the new world of business networks, then get this one and share in the common understanding a remarkable collection of business leaders have brought to the topic."
—Andy Mulholland, Global Chief Technology Officer, Capgemini
From the Inside Flap
From the Introduction:
"This book is about the evolving nature of global business and the ways that a company's network of relationships (with suppliers, customers, and other partners) is being reconfigured to derive competitive advantage and increased profitability.
Business network transformation is a true market movement and isn't something that can be ignored. As the pace of business change accelerates and businesses become increasingly connected, business networks provide the new source of competitive advantage for companies. We are now witnessing a global transformation into dynamic and orchestrated business networks in which each entity is focused on its key differentiation while collaborating with others in its network to deliver higher shared customer value, speed of innovation, and cost benefits.
Companies rely on partners not only to take on non-core activities so that resources can be funneled into innovative activities, but also to collaborate with them for new product development and new ways to enter attractive markets. Globalization and deregulation are empowering companies to discover innovation and talent from all corners of the world and to enter emerging high-growth markets that require new partnerships. Companies in the value chain must act as one entity to serve the end customer, who is armed with more information and has more choices than ever before."
Contributors include
- Geoffrey Moore and Philip Lay, TCG Advisors
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Marco Iansiti, Harvard Business School
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Mohan Sawhney, Kellogg School of Management, Northwestern
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Ranjay Gulati, Harvard Business School
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David Kletter, Booz Allen Hamilton
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N. Venkatraman, Boston University
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John Hagel III, John Seely Brown, and Gautam Kasthurirangan, Deloitte
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Randall Russell, Palladium Group
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Henry Chesbrough, University of California at Berkeley
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Jeffrey Dyer, Brigham Young University
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Andrew McAfee, Harvard Business School
From the Back Cover
Business Network Transformation offers cutting-edge research and an in-depth exploration of critical topics such as customer value, supply networks, product leadership, global processes, operations, innovation, relationship management, and IT.
"Operational excellence can no longer be achieved by focusing only on a company's internal resources. Companies today operate with tightly-linked global business networks. This book provides managers with vital insights on how to achieve alignment and process efficiencies across their entire virtual organization of suppliers, customers, complementors, and alliance partners." —Robert S. Kaplan, Baker Foundation Professor, Harvard Business School and chairman, Professional Practice, The Palladium Group
"This book makes the connection between the wave of new technologies and their ability to create entirely new value throughout a business network. It's about the creation of revenues and profits by working in a wholly different manner with your extended business network. If you have to pick one book to get the whole picture on the new world of?business networks, then get this one and share in the common understanding a remarkable collection of business leaders have brought to the topic." —Andy Mulholland, Global Chief Technology Officer, Capgemini
Most helpful customer reviews
3 of 3 people found the following review helpful.
Interesting Ideas but beware the bias of patronage.
By Mark P. McDonald
Business Network Transformation, edited by Jeffrey Word, is a compendium of articles on the ideas of business networks, sponsored by SAP. Make no mistakes this book is market-iterature - a cross between marketing and book publishing, but once you know that there are some interesting ideas here. Just know what you are reading and take things with a grain of salt.
The book is easy to read, the concepts clear, and the discussion ample. But the details are few; the ideas seem pretty well established so if you are following this stuff not much new here. Overall Jeffrey Wood the editor from SAP did a nice job of walking the line between getting the company's message out through thought leaders who are able to express themselves.
The fact that this book will get a market push, primarily with business execs means that its one that you should be aware of because people are going to ask about business network transformation - particularly if you have SAP.
Strengths:
* The book's chapters are with real thought leaders and academics who are sharing their ideas presented in a BNT context.
* The book provides a comprehensive discussion of BNT from a strategy, IT, operations, measurement and innovation perspectives. This is not a one trick book.
* The individual chapter authors do a fairly good job of not repeating each other or contradicting each other, so it reads as a book about a single subject.
Challenges:
* The books chapters have been written to order - the idea of BNT - to varying degrees. This seems to be the idea that SAP is getting behind so because they are behind it the authors are at a minimum saluting the idea - this robs the reader of some deep discussion and analysis of the merit and pitfalls of the ideas behind BNT.
* There is little to no treatment of the finances and financial governance of these approaches. One of the things holding BNT's back is how we account for them, particularly in a services environment. The book is largely and surprisingly silent on this point.
* There is much discussion and very little detail in the chapters about actual experiences, what works and what does not work. The authors seem to be at least one or two degrees removed from the actual case experience or the experience is a few years old.
The move to business networks is not particularly new. The discussion of them has been going on for some time and this book makes a valuable contribution to the discussion with 11 chapters focusing on different aspects of business networks. The chapters are:
1. Transforming your business network (Philip Lay and Geoffrey Moore) - a general introduction into the idea and an attempt to brand BNT as a business term.
2. Business Network Transformation IN action (Marco Iansiti and Ross Sullivan) - a discussion of the BNT ideas in general with surprisingly general case studies. This is a repeat of Iansiti's Keystone Advantage HBR 2004.
3. Creating superior customer value in a connected world (Sawhney and Gulati) - provides a comprehensive but conservative view on BNTs.
4. Shrinking core, expanding periphery: the relationship architecture of high-performing organizations (Gulati and Kletter) is a reprint of a California Management Review 2005 article which provides some helpful frameworks for thinking about the different stages. But, it's a little dated particularly if you have been following research in the area.
5. Product leadership in a network era (Venkatraman) - provides a logical and complete description of the product opportunities, but again nothing earth shattering here.
6. Driving collaborating success in global process networks (Hagel III, Seely Broun, Kasthururangan) features some good case studies on Li & Fung and other companies. This chapter is probably the best of the book.
7. Operational excellence: the new lever for profitability and competitive advantage in a networked world (Russell) - perhaps the worst chapter in the book as it is an extended info-mercial for the balanced scorecard and strategy maps.
8. Constructing and managing innovation in business networks (Chesbrough) a good chapter that rehashes the author's concepts about open innovation. I would suggest the book as being better.
9. Value of trust in business networks (Dyer) - a good discussion of the issue of trust in the automobile industry which is highly networked.
10. The role of IT in business network transformation (McAfee) - the discussion is a little overly simplistic regarding the use of IT in creating networks and the examples are more seasoned (older) The author quickly moves to his definition of Enterprise 2.0 and does not provide much guidance.
11. Road map to transform your business network (Lay and Moore) -- Exactly the type of wrap-up chapter you would expect complete with a maturity model for BNT that requires a full suite of ERP tools. I am sure you will see in consulting and other presentations.
3 of 3 people found the following review helpful.
A "must have" combination of compass, GPS, tool kit, and operations manual for BNT
By Robert Morris
Whatever their size or nature, all organizations have business relationships. In recent years, it has become increasingly more difficult to establish and then nourish them, especially given the reduction of direct human interaction (i.e. face-to-face and voice-to-voice) in combination with the increase of indirect human interaction (e.g. email and texting). What we have in this volume is a collection of eleven essays whose authors explain how to devise and hen execute strategies to reconfigure business relationships for competitive advantage. As the book's editor, Jeffrey Word, explains in the Introduction, "This book is about the evolving nature of global business and the ways that a company's network of relationships (with suppliers, customers, and other partners) is being reconfigured to derive competitive advantage and increased profitability."
More often than not, this means an organizational transformation within a global transformation, "into dynamic and orchestrated business networks in which each entity is focused on its key differentiation while collaborating with others [including former as well as future competitors] in its network to deliver higher shared customer value, speed of innovation, and cost benefits." Companies have no choice but to seek out within and (yes) beyond their competitive marketplace for new or better ways to serve their end customer.
The most appropriate business model is perhaps best described by Henry Chesbrough in his seminal works, Open Innovation (2003) and Open Business Models (2006): "A business model performs two important functions: it creates value and it captures a portion of that value. It creates value by defining a series of activities from raw materials through to the final consumer that will yield a new product or service with value being added throughout the various activities. The business model captures value by establishing a unique resource, asset, or position within that series of activities, where the firm enjoys a competitive advantage."
Having thus established a frame-of-reference, Chesbrough continues: "An open business model uses this new division of innovation labor - both in the creation of value and in the capture of a portion of that value. Open models create value by leveraging many more ideas, due to their inclusion of a variety of external concepts. Open models can also enable greater value capture, by using a key asset, resource, or position not only in the company's own business model but also in other companies businesses."
To those who have relatively little (if any) prior experience with business network transformation (BNT), I suggest that they first read and then re-read Word's brilliant Introduction and the first chapter, "Transforming Your Business Network" co-authored by Philip Lay and Geoffrey Moore, before proceeding to the other material. This approach will provide a frame of reference for Marco Iansiti and Ross Sullivan's discussion of "Business Network Transformation in Action in Chapter 2, and, a solid preparation for the information and advice that follow in Chapters 3-7 on how to achieve these strategic objectives:
o Creating superior customer value (Mohanbir Sawhney and Ranjay Gulati, Pages 39-57)
o Shrinking core while expanding periphery of the relational architecture (Gulati and David Kletter, Pages 59-95)
o Achieving and sustaining product leadership (N. Venkatraman, Pages 97-121)
o Driving collaborative success on global networks (John Hagel III, John Seely Brown, and Gautam Kasthurirangan, Pages 123-150)
o Leveraging profitability and competitive advantage with operational excellence (Randall H. Russell, Pages 151-177)
The material in the first two and remaining four chapters is of comparable scope, depth, and value. Readers will appreciate the fact that at the conclusion of the 11 chapters, rather than a formulaic summary of key points or checklist of "action steps" to be taken (albeit devices that can also have value), the author or co-authors of each suggest what is most appropriate for a conclusion to the given material. For Chapter 8, Chesbrough offers "Practical Lessons for Business Network Innovators"; for Chapter 9, Jeffrey Dyer concludes with suggesting a process by which to identify underperforming business partnerships; for Chapter 10, after explaining the role of IT in BNT, Andrew McAfee shares his thoughts about "Betting on the Next Wave" as he poses "three simple questions" he urges his reader to consider when defining appropriate IT initiatives; and at for the conclusion of Chapter 11, Lay and Moore also pose several questions, in this instance to help management teams to determine when and where to start "their BNT journey."
Again, I presume to suggest to those who have relatively little (if any) prior experience with business network transformation that they first read and then re-read Word's brilliant Introduction and the first chapter co-authored by Lay and Moore before proceeding to the other material. Ultimately, of course, each reader must determine what is of greatest interest, relevance, and value. Also, with all due respect to the quality of the advice offered throughout the volume, the reader must also determine which of it to follow and then, key point, how to execute it in the given organization.
1 of 1 people found the following review helpful.
Business Network Transformation: A Review
By M. Lamoureux
[...]
The book, which is about the evolving nature of global business and the ways that a company's network of relationships (with suppliers, customers, and other partners) is being reconfigured to derive competitive advantage and increased profitability, includes contributions from Geoffrey Moore (TCG Advisors), David Kletter (Booz Allen Hamilton), Randall Russell (Palladium Group), Andrew McAfee (Harvard Business School), Mohanbir Sawhney (Kellogg School of Management), and Jeffrey Dyer (Brigham Young Unversity), among others, and does a great job of not only defining business network transformation (BNT), but also in providing practical advice on how to achieve it and case studies that illustrate the ideas.
It starts off with a great introductory chapter by Geoffrey Moore and Philip Lay which explains how most networks these days are either collaborative (like the ones used by Cisco, Boeing, and Goldman Sachs) or coordinated (like Nokia, Nike, or Charles Schwab) and that while each of these network types have their advantages (expertise, innovation, and market development in the case of collaborative networks and efficiency, speed, and adaptability in the case of coordinate networks), each of these network types also have their disadvantages (as collaborative networks struggle with commoditization and entrusting partners with non-core mission critical processes while coordinated networks struggle to enter new markets and achieve downstream visibility). As a result, most networks need to transform to compete in today's economy. This is especially true if your competitors are transforming their networks and their strategies to capitalize on new opportunities. The chapter concludes with a list of seven early warning signs that indicate you will need to transform your network or risk being left behind.
The next chapter, by Marco Iansiti (of Harvard Business School) and Ross Sullivan (of Keystone Strategy) tackles business network transformation in action by diving into the five guiding principles (design for adaptability, plan for scalability, encourage participation, develop a governance framework, and create superior customer value), providing a four-phase implementation framework for you to follow, and presenting case studies on Novartis (which is using BNT to reduce new drug development cycles and cost), Hugo Boss (which is using BNT to manage multiple brand identities through smaller, nimbler sub-organizations), and NVidia (to create and capture niches in the semiconductor industry).
Chapter three, by Mohanbir Sawhney (Kellogg School of Management) and Ranjay Gulati (of Harvard Business School) tackles the all important goal of creating superior customer value in a connected world and addresses digital networks and customer collaboration. In doing so, it discusses collaborative value exchange in depth and provides a guide on how to use today's networks and network technologies to create more value regardless of what industry you happen to be in.
The next two chapters, by Ranjay Gulati and David Kletter (Booz Allen Hamilton) and N. Venkatraman of (Boston University), respectively, tackle relational capital and product leadership, which are critical to value creation in today's modern business networks. An organization with a well designed and well managed network has a lot of relationship capital that it can capitalize on between its suppliers, customers, and alliances; relationship capital that can mean the difference between success and failure in today's economy. Chapter four discusses the dimension of relationship capital and how to move from transactional relationships to ownership relations which take advantage of strategic partnerships to create value that would not otherwise exist. Product leadership is becoming harder and harder, especially when today's business landscape is shaped by the intersection of Moore's law (the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years), Metcalfe's law (the value of a network grows as the square of the number of users), and the Edholm's law (bandwidth rises three times faster than computer power, implying that the speed of communication doubles every six months). Chapter five provides case studies from GM (Onstar), Apple (the iPod), and Microsoft (HealthVault) that demonstrate how companies that can create, and take advantage of, opportunities created by the intersection of these laws can change, and dominate, markets.
Then we encounter the chapter on driving collaborative success in global partnership networks by John Hagel III, John Seely Brown, and Gautam Kasthurirangan (of the Deloitte Center for Edge Innovation) which is one of the crown jewels of the book. Truly successful business networks are business process networks (BPNs) which orchestrate many best-of-breed suppliers and partners together in a distributed, collaborative approach that uses the respective strengths of each partner to create new, valuable, products and offerings that no individual organization can create on its own. An organization that moves from a physical network approach to a process network approach can grow from a niche provider to a global multi-billion dollar enterprise, like the Li & Fung group which went from a small exporter of traditional Chinese items made from porcelain and bamboo, clothes, and toys in the 1970's to a multi-national group of companies with offices in 40 countries and $14 Billion US in annual revenues. Besides presenting a number of impressive case studies, this chapter also discusses the key elements of global process networks (which include product and process modularity, loosely coupled processes, trust in collaboration, and productive friction), common misconceptions (and how to combat them), and a pragmatic path to orchestrating a BPN. This chapter alone is worth the price of the book, but if you stopped reading here, you'd miss the insight on managing innovation by Henry Chesbrough (of the University of California at Berkeley), the discussion on the role of IT in business network transformation by Andrew McAfee (of Harvard Business School), and the full road map to business network transformation presented by Geoffrey Moore and Philip Lay (of TCG Advisors), which I'm not going to cover because I have to leave you with some surprises so you'll buy the book and support the World Food Program. It does a very nice job of building on the innovative concepts I've been covering since I started this blog (including my posts on the innovation revolution on e-Sourcing Forum) and presenting them all in one nice, neat package. It's worth your time.
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