Network Centric Strategic Planning

Network-Centric Strategic PlanningNik Mohd Hasyudeen YusoffCEO and Thought Leader, Inovastra

Competitiveness Through Innovation and Strategy


Agenda•Network-Centric competition• Leveraging on network of like-minded

partners• Issues in competing using network-centric

strategy•Cultural changes in applying Network-

Centric strategy•Case studies of the application of

network-centric strategy•Concluding thoughts


Network-Centric Competition•Change is something that organisations

and enterprises have to contemplate with all the time

•Politics, Economy, Society, Technology, Environment are change drivers which affect the dynamics in the marketplace

•The pace, frequency and impact of change would require strategic response from organisations and enterprises


YourBusiness

YourCustomers

YourCustomers

YourCustomers

YourSuppliers

YourNetworkPartners

YourCompetitors

YourCompetitors

Economy

Environment

Technology

Society

Politics

Network-Centric Competition


• Re-configure, Re-invent, Re-think• Re-configure your value chain – what is your

unique selling proposition?• Re-invent your business model – how do you

structure your business to interact with business partners and suppliers to offer your USP to your clients?

• Re-think your business process – could it be done differently in a more effective and efficient manner which add more value to clients?



Anenterprisevertically

structured

Market 1

Market 2Market 3

Direct present

VerticalIntegration?

Direct present

Direct present



AnEnterpriseleveraging

on network

Market 1

Market 2Market 3

Direct present

Network-Centric?

NetworkPartner

NetworkPartner

Service PlatformOwner



ClientsProblems

BusinessServicesFirm 1

BusinessServicesFirm 2 Sorry, no capability

Yes, we have solutions!

Knowledgeprovider

SubjectMatterExpert

BusinessServicesFirm 3




Principles of Network-Centric Competition 1

Description Examples

Shared goals and objectives

Common goals bring network members together

Customers community

Shared “world view” Common assumptions, mental models

Open Source Community

“Social” knowledge creation

Interaction among members as basis of value creation

Inventor networks

Architecture of participation

Systems, mechanisms, processes to participate

Open source community

Network-Centric Competition Principles

1 – Adapted from the Principles of Network-Centric Innovation, The Global Brain, Nambisan and Sawhney


Network-Centric Competition Management FeaturesNetwork-Centric Elements

Features

Network leadership Orchestrating the behaviour of network members and network activities in creating value to clients

Network governance A clear articulation of the roles and responsibilities of the members in the network

Supporting infrastructure

Knowledge management, project management, technology platforms, business tools etc which are core to the USP of the network

Intellectual property management and value appropriation protocols

Cover how intellectual property is developed, owned and shared as well as the value created through the use of the IPs are shared

Leveraging on like-minded partners


BusinessServices

Firm

BusinessPartner

BusinessPartner

ExistingClients

NewClients

NewClients

Existing services based on existing capabilities

New services based on partner’s capabilities

New services based on newly acquired capabilities

New services to new clients based on partner’scapabilities

New services to new clients based on partner’scapabilities and new distribution channels

Leveraging on like-minded partners


Issues in competing using Network-Centric strategy•Could an enterprise build strategic

relationships with like-minded enterprises to serve common customers or markets?

•What would bind these enterprises together?•Who should lead the network? What are the

reasons for this right of leadership?•How would the members of the network

benefit from the network?•How should an enterprise structure itself

internally to be effective in the network?


Cultural changes in applying Network-Centric strategy• Leadership – willingness to share strategic

issues and rely on network partners based on agreed parameters

• Team – ability to understand the strategic relationship and execute plans holistically, need to do away with “Not Invented Here” and “We Know Everything” syndromes

• Internal processes and procedures need to be change to accommodate the network-centric strategy – training and re-training needed


• The Big-4 accounting firms are competing on Network-to-Network basis▫Global leadership but innovative structure to

accommodate various domestic regulation▫Offers diversified range or services and some do not

identify themselves as accounting practices but just by their brands

▫Experts need not necessarily reside in all firms but could be brought into the picture from various offices and jurisdictions

▫Share knowledge-base, intellectual assets, business platforms but RISKS are confined to respective jurisdictions

Case studies of the application of Network-Centric strategy


• Boeing 787 Dreamliner project:▫Boeing (network leader) assembled global partners

it trust to create the plane, from concept to production

▫Designs and development not only outsourced to partners, they made financial investment as well

▫Part of the strategy to shift Boeing from being a manufacturer to a designer and assembler of airplanes

▫Facilitated by a sophisticated virtual Global Collaboration Environment system

▫Trust and shared understanding developed across all members of the network



•Salesforce.Com – Leader in software as a service

•Salesforce.Com offers CRM system and provides the platform for external developers to build applications on

•The network leader is Salesforce who own the technology and make decisions on the platform

•Partners develop applications that compliment the core CRM and manage their on IPs



• Li & Fung – world largest sourcing company which does not own a single factory

• It assumes itself as a “network orchestrator”, working with more than 8,300 suppliers serve by more than 70 outsourcing offices in more than 40 countries and territories

• Li & Fung develops and manages networks and designs and manages specific supply chain to meet specific customer needs



•The principles applied by Li & Fung in orchestrating network are:▫Design and manage networks – competing

through networks, the best supply chain will win▫Control through empowerment – empowerment,

trust, training and certification to bind the network together, entrepreneurship is encouraged

▫Create value through integration – bridging borders and leveraging on company’s value and intellectual property across the network



Case studies of the application of Network-Centric strategy• InnoCentive – an open innovation community which

provide solutions to tough business, science and product development

• Launched by pharmaceutical giant Eli Lilly, a match making system links experts to unsolved R&D problems, allowing link to global experts without the need to hire them

•This approach recognises the fact that not all the smart people in the world works for a particular organisation


• International Enterprise Singapore iPartners programme

• Encourages Singapore companies to band together in pursuing international projects

• This would allow the consortia to:▫Combine resources▫Provide holistic solutions to customers▫Achieve economic of scale

• Lead by anchor companies which act as network leader and orchestrate the activities of the network members

• Aims to secure more than $3 billion in the next 5 years



Concluding thoughts• The dynamics in the present challenging

business environment call for a flexible, yet, effective approach in value creation

• Competition has shifted from corporations to networks

• Strong network orchestration ability by network leaders is key in ensuring the effectiveness and sustainability of the network

•Network-centric competition opens enterprises and organisation to new possibilities for value creation

Network Centric Strategic Planning

Business

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