Journal of Information Technology

This article introduces the novel concept of smart business networks. The authors see the future as a developing web of people and organizations, bound together in a dynamic and unpredictable way, creating smart outcomes from quickly (re-) configuring links between actors. The question is: What should be done to make the outcomes of such a network ‘smart’, that is, just a little better than that of your competitor? More agile, with less pain, with more return to all the members of the network, now and over time? The technical answer is to create a ‘business operating system’ that should run business processes on different organizational platforms. Business processes would become portable: The end-to-end management of processes running across many different organizations in many different forms would become possible. This article presents an energizing discussion of smart business networks and the research challenges ahead.

The need to simultaneously achieve operational efficiency, while accommodating a continuous morphing of alliances and network arrangements, is a key challenge in the modern enterprise and market. Inter-firm interdependence and unpredictable market shifts heighten the need to establish an architecture and governance arrangement that permits rapid adaptation. Fully integrated firms have increasingly morphed into networks of collaborators. The demand for efficient and effective inter-firm coordination is no longer a desired condition, but essential for competitive position. Historically, the cost of this efficiency has been loss of flexibility, yet volatile markets reward efficiency and flexibility. Market trends demand an ability to improvise in the marketplace - converge execution with planning - while being simultaneously efficient. In this paper, we explore this improvisation-efficiency paradox. The architecture and governance issues are considered that seek the strengths of both effects. Efficiency need not come at a high cost in attaining the ability to be adaptive and spontaneous. We explore the key considerations of both network architecture and governance structures that characterize improvisational networks. Trade communities and trading partners establish a discipline of processes and decision rights that serve the community of collaborators.

This paper analyzes the statistical properties of real-world networks of people engaged in product development (PD) activities. We show that complex PD networks display similar statistical patterns to other real-world complex social, information, biological and technological networks. The paper lays out the foundations for understanding the properties of other intra- and inter-organizational networks that are realized by specific network architectures. The paper also provides a general framework towards characterizing the functionality, dynamics, robustness, and fragility of smart business networks.

An organization operates within a network of relationships with economic partners. The translation services market provides rich examples of networks in practice that connect a diverse range of customers who require translation services to a global array of translators ranging from individual experts through to organized groups. This paper examines the marketing strategy of a global translation company, Thebigword. In the case of Thebigword, the network is constructed around shared information systems that encapsulate and define the nature of relationships with both business customers and thousands of individual translators worldwide. The marketing problem for Thebigword is that it must be able to sense and react to changes and requests from large business customers around the world, whether this is a change to their website, or a request for a new document translation. In the financial services market, the request for translation services may also be very time sensitive. The focus of the paper is on how Thebigword has used information systems to create a smart business network that defines marketing channels along the key dimensions of target market, business processes, IT architectures and systems, and network intelligence. A range of business examples is presented that illustrate how the marketing and information technology concepts fit together, including that of an international bank and an airline company. The case also provides technology examples of portal technology, web services and e-procurement.

Information and communication technology enables a firm to maintain more links with more companies at much lower costs than before. This combined with the increasingly standardization of business processes and the application of modularity at the process level leads to embedded coordination. This case study describes how three unconnected business networks were integrated using modularity at the business process, or activity component, level and the role standardization played to implement embedded coordination. The case study was conducted at ABZ, a trusted Business Service Provisioner in the Dutch insurance industry. This study suggests that embedded coordination leads to improved performance of the business network under the condition that standardization is enforced.

We investigate the concept of Smart Business Networks by using Beer's Viable System Model (VSM) to analyse how such a network mitigates the affect of emergent, and therefore unforecastable, demands upon the networked businesses. We examine the requirements for network smartness, highlight some significant properties of one Smart Network and use our case analysis and concepts from systems theory to suggest some general properties such as natural stability and distributed capability. We have found that smartness is distributed and shared behavioural process standards can act to stabilise complex systems. This is important because it mitigates emergent behaviour within increasingly complex business networks. The contributions of our article apply both to academics and business practitioners and are in its illustration and investigation of one Smart Business Network including how the smart capability functions at a strategic, business process and technical level; and the use of Beer's VSM to analyse an electricity market.

Webservices (WSs) are believed to be among the key technologies to enable the transformation of current static supply chains into dynamic virtual networks of enterprises. Others have said that these technologies are not yet ready for large-scale applications to supply chains and propose ‘traditional’ cross-enterprise integration methods. However, there is currently little research available that objectively evaluates the usefulness of WSs to enable smart business networks. In this study, this question is addressed through developing a typical scenario in which we transform a static supply chain into a ‘loosely coupled’ business network. We implement the scenario using state-of-the-art ‘enterprise application integration’ and WSs orchestration technology. The comparison of these alternative approaches reveals that WSs technology has some clear advantages above enterprise integration technology currently in use. However, there are also some limitations and research issues which are presented as a future research agenda for WSs technology.