A smart business network is one that can create better results than its competitors can. In today’s business markets, competition has heightened and therefore any business with survival goals has to be more efficient and effective in its operations.
The attributes of a smart business network include strategic positioning, speed access to market information, excellent customer service, fast sharing of new information, exceptional ability to deal with emergencies, and to adapt to the changes.
Strategic positioning of a business determines the amount of success realized since it is through positioning that one can meet other people in the market.
According to Golden, Hughes and Burke, Kenny’s bookshop, a family owned business which traded in secondhand books, made a venture into online book selling and established strong links with e-retailers; Amazon, Bibliodirect, and Albris, which enabled it to expand its sales volumes tremendously (2005, p.65).
In view of the competition in the business market, for any business to attract customers it shall require to keep itself abreast with developments in the market. In addition, a smart business is also expected to disseminate speedily the acquired information to relevant participants in its network. The fast relaying and sharing of information will help to create an efficient and effective network thereby enhancing business.
Another aspect of a smart business network lies in its ability to establish great customer service relationships. To be able to offer quality customer service one needs to enhance his/her understanding of the business in which s/he is in, which will help in tailoring products and services.
Burt posits that, “a good Customer service relationship (CSR) would guarantee continued receipt of customers’ feedback, which will be used to develop or adjust products and services to meet customers’ specific needs” (1992, p.25). In addition, a smart business network should be able to capture and analyze objectively information from the environment and quickly generate an appropriate response.
van Heck and Vervest in their proposal for a new business network approach to replace the traditional value chain approach identified several aspects in which the new network will dominate the traditional system (2007), Firstly, products offered and services rendered in the traditional value chain system are common and simple, unbundled, and usually take long time before reaching the consumer.
On the other hand, the new business network system approach is quite complex but ensures fast and timely delivery of products and services. Secondly, in the traditional approach value creation is achieved through value chains with very long connected relationships.
In contrast, the new business networks disregard this tradition and only allow for quick connect and disconnect relationships, which allow only relevant relationships for the business.
Thirdly, the traditional approach puts emphasis on hierarchical and centralized control systems; on the other hand, the proposed approach encompasses a large and distributed span of control and decision-making. Lastly, the new approach allows fast and wide information sharing whereas the traditional system limited information sharing to the business partners.
The new business networking approach places great demands for incorporation of information technology to enhance its capabilities. The Networked Business Operating System (BOS) comes handy for while addressing key networking issues such as, membership selection, linking, goal setting, risks and reward determination, innovation, and fault tolerance.
The main role that BOS plays is “to combine business networks insights with telecommunication dimensions” (Nohria & Ghoshal 1997, p.9). As a result, the new approach becomes better equipped to respond and adapt to changes in the environment because the products and services are better tailored to meet specific requirements, the level of coordination is high, and the business processes are more portable.
Reference List
Burt, R., 1992, Structural Holes: The social structure of competition. Cambridge: Harvard University Press.
Golden, W., Hughes, M., & Burke, H., 2005. Node to Network: partnerships in the Second-hand book trade. New York: Heidelberg.
Nohria, N., & Ghoshal, S., 1997. The differentiated Network. Jersey: Bass.
van Heck, E., & Vervest, P., 2007. “Smart business networks: how the network wins”.
Communications of the ACM; An Online, “Guide to Computing Literature.” Web. Web.