I have to say I loved reading this from the IBM Institute for Business Value. It provides a greater fit with much of what I was struggling to articulate in a recent post “Missing the building blocks of ecosystem design in the Energy Roadmap by IEA“; I can relate to what the IBM report conveys as the future way to organize and undertake business or to bring together all the parts of the Energy System roadmap suggested in the recent IEA report.

The report “The Virtual Enterprise – The Cognitive Enterprise in a virtual world.” gives a new view to managing in both virtual worlds and enterprises. I do recommend reading it.

To quote Mark Foster, Senior Vice President, IBM Services:

“Technology is transforming the business models of enterprises across the globe, creating new opportunities for growth and fresh benchmarks of cost and efficiency. The ability to apply AI, automation, blockchain, the Internet of Things, 5G, cloud, and quantum computing at scale has made the promise of Cognitive Enterprises real.

As we place this revolution in the context of an increasingly virtual world, we see even more power arising from the ecosystems, digital workflows, and networked organizations that are made possible.

The Virtual Enterprise is emerging, supported by a “Golden Thread” of value that animates the enterprise and binds ecosystem participants”

The report takes the view “The Virtual Enterprise re-evaluates the need for physical assets, infrastructure, and talent and opens the potential for extreme digitalization as well as extended value chains and new partnership approaches”

Openness is the important characteristic of this new business model

According to IBM in this report, the single most important characteristic of the Virtual Enterprise is “openness.” This openness brings value at three levels:

Inside: Inside the enterprise—connecting divisions and functions in more collaborative and agile workflows
Outside: With partners outside the enterprise who become ever more critical to delivering the core purpose of the business
Out there: With the wider ecosystem that allows true platform economics to play out and the enterprise to take advantage of all those who wish or need to connect with its intent.

I am a great believer in the combined effect of both having the looking inside-out and outside-in for organizations to exploit. Both offer fresh insights and can share different perspectives of understanding; they complement and often challenge a specific view that was standing on their own, this simply narrows the understanding and fails in recognizing the greater potential of having this combined view.

The “out-there” aspect IBM suggests, of allowing the wider world to contribute is getting to become the most critical part of the hearing and responding to. The sentiment, the public opinion etc., is becoming as powerful in its voice and actions and in organizations, there is the need for an excellent set of listening tools and mechanisms to interpret, react and respond to. We always need to listen to and draw inspiration and understanding, be increasingly responsive, agile and adaptive to this “out-there” aspect.

As IBM rightly state: “The potential to align ecosystems as solutions to the big issues of climate, health, and equality is real. As sustainability and stakeholder capitalism become C-suite imperatives, the new technology-enabled business models that are emerging have a critical role to play”.

For me, Sustainability will be at the centre of the business core in the future.

I would argue that sustainability and how we articulate and address that will be the new core of a business. Taking the UN agenda for sustainable developments and its 17 focus points will drive each of us to come in the years to come. I want to give this some “open thinking” in the coming weeks, but this report triggers this thinking “out loud” to add my comment here.

The IBM building blocks to the Virtual Organization

You get an extended explanation and several use-case examples within the report. I only summarize them here from their perspective and definitions:

 

Openness  1. Market-making Platforms and Ecosystems
Openness is the defining characteristic of the Virtual Enterprise. Most importantly, openness animates the stretching of the business platforms envisioned to encompass wider ecosystems.  We (IBM) see organizations recognizing the power of combining platforms to seize new markets, as well as recognizing that the scale of the impact that is required demands this alignment with other substantive players.

By optimizing platform economics, open connectivity, and frictionless engagement, the Virtual Enterprise enables all participants across market-making platforms and ecosystems.

Acceleration  2. Science and Data-led Innovation
The openness of the Virtual Enterprise accelerates access to new sources of product and service innovation. It takes a scientific discovery approach, constantly experimenting, relying on predictive and prospective analysis fueled by the massive amounts of data it can access from itself and its ecosystem partners.

More and more industries are seeing the value that used to be the preserve of R&D-led industries (for example, pharmaceuticals) as they look forward rather than backward and mine the information in their value chains to spark creativity.

Agility  3. Extended Intelligent Workflows
The Intelligent Workflow is the Golden Thread that animates the Virtual Enterprise. It creates the backbone of the value chains that bind the ecosystem participants. As the reach of the workflows is extended, the power of applied technologies such as extreme automation, AI, IoT, and others is multiplied to unlock efficiency and differentiation and render the platforms ever more attractive.

Virtualization adds new opportunities for networks, connectivity, and skills engagement to bring the workflows to life and drive agility.

Purpose  4. Sustainability and Impact
The Virtual Enterprise reinforces the extent of connectedness worldwide and the impact of humans on each other and the planet. It aligns purpose and intent with wider societal impacts. With sustainability and stakeholder capitalism taking hold in the C-suite, new ecosystem business models are helping provide solutions to the biggest challenges of our time around climate, health, security, and equality.

This plays an increasing part in how customers, partners, and employees feel about engaging with the organization.

Culture  5. Inclusive Human-technology Partnerships
The Virtual Enterprise embraces the new tools and ways of working that have become the norm during the pandemic. It takes advantage of the accelerated reset of human-technology interfaces, including digital channels to customers and seamless virtual working across processes.

It also recognizes the need to build new forms of leadership, inspiration, engagement, and connection to deal with exacerbated challenges of human empathy, creativity, and a sense of belonging.

Resilience  6. Open Secure Hybrid Cloud and Networks
The Virtual Enterprise takes full advantage of the flexibility and nimbleness promised by hybrid cloud architectures. It enables the openness of the enterprise to connect with business partners and access the full potential of leading open technologies to drive innovation.

Therefore, the Virtual Enterprise is underpinned by robust networks and secure technology infrastructure, with the right workloads within the right overarching architecture and plug compatible with the world around. Therefore, the dual demands of adaptability and resilience are prerequisites of the journey to becoming a Virtual Enterprise—a journey on which many organizations have now embarked.

IBM’s concluding remarks and recommendation

IBM finish this report by recommending The Garage approach is an effective way to bring the various components and players together in a change architecture that can pursue the Golden Threads of value, build concrete modules of enhanced performance, and tie people, processes, and systems together at scale.

The Garage model of co-creation, co-execution, and co-operation, according to IBM, has proven to be effective in the virtual world that the pandemic has forced.

Perhaps this Garage Model needed further explaining, but it “opens the doors” to investigating and evaluating this more as a change architecture approach.

The report is well worth the read. The use-cases bring it to life. The need is to recognize business is changing; it has to move faster and become a virtual one, reliant on ecosystems of relationships, networks and technology.

Thanks, IBM- a great report and read!

The IBM Institute for Business Value, part of IBM Services, develops fact-based, strategic insights for senior business executives on critical public and private sector issues. Visit them at: ibm.com/ibv.

This report quoted here “The Virtual Enterprise – The Cognitive Enterprise in a virtual world”  is © Copyright IBM Corporation 2021