One of the changes that has come with the internet era or the network economy is the fact that - as the word “network” expresses - business is more fragmented over a variety of entities which are linked by chains. In line with this trend, companies ought to focus on a core business and therefore the additional value is provided by a partner or supplier somewhere in the same network.
The advantage of this enormous network is that previous gaps are closed or narrowed. As long as your business is able to (biz) talk with others on the net your potential is unlimited. In the ideal picture it would be possible that you automate your complete business with a variety of business services from providers where in a previous situation you would had to buy a single, complex and expensive (ERP) package from a single provider. For the sake of giving just one example.
The other side of this trend is that with a business that is chained by little links and small autonomous units, the whole is more fragile because the whole “system” is only as safe as the weakest link. This situation is in fact not any different that the common – not internet based - business but in that area we are more accustomed with the phenomenon of a chained business; most of it is represented by the transport sector. Last weeks incidence was a paramount example of such weakest link issues:
The painting, “Children with a Cart, " disappeared last week while en route to the Solomon R. Guggenheim Museum in Manhattan, the museum announced Monday in a joint release with Ohio's Toledo Museum of Art, which owned the oil painting.
The big difference with the internet based economy and the normal economy is that for the former it is much more easier to chain, because it is one of the main features of the net. Increasing the complexity of the net, which is a trend that is hardly to slow down, will make it also more vulnerable. The flexibility of the normal economy is limited by the relative (in)flexibility of the transport sector.
This means that if your business is going with the stream and is opening to connect to others it should equally invest in security. If it does not it will be out of business because the business continuity can’t by guaranteed. If - on the other hand - your business increases its security levels it automatically chooses limit its openness and to increase its autonomy; which means that it will not fully join the internet trend.
© 2006 Hans Bool
Hans Bool is the founder of Astor White a traditional management consulting company that offers online management tools. Have a look at some of our free management tools