Management in the Age of Network Abundance

Cigref TV presents its study : Rethinking Enterprise 2020 for Networked Abundance in the Value-Shifting Age of the Internet of Things 

Pour consulter l'étude en français, cliquez sur le lien suivant : Repenser l'entreprise de 2020 au regard de l'abondance en réseaux

Companies are faced with the emerging context of the Internet of Things. The wealth of new data collected by wearable devices, vehicles and objects leads to an age of “Network abundance”, to quote two renowned professors of the University of South California, Omar El Sawy and Francis Pereira. Their term comes as a reminder that this ecosystem is not only about Big Data and the interconnection of things. It’s rather a whole new network of people and data which co-create value through new APIs and enable a brave new world of innovative business models.
They define two dominant meta-dimensions of this New IOT Digital Ecosystem. The first dimension is the ability to learn from the customer’s experience, which involves a shift from value in exchange to value in experience. The second lies in the exploitation of the connection between the physical and virtual worlds. Here, the challenge for companies is to determine how much a process can be automated and how much human intervention is needed.
Depending on the level set by companies on the scale of both of these dimensions, El Sawy and colleagues define 4 business models. Firstly, with high experience learning coupled with low human intervention, we get a Network Abundance Enterprise with Real-Time “Power to the Edges”. No company is yet in this position but Google, with its recent acquisitions, seems to be reaching this model little by little. Now with lower automation comes the Digital Customer Orientation Enterprise. These companies improve their services by learning from their customers but are constrained by traditional manufacturing processes. That’s the case for Amazon or Volvo.
Then comes the case of companies less focused on learning from their customers and more on setting a high degree of automation. These “One World Seamless Digital Enterprises”, as the professors call them, provide digital services but have neither developed individualized products nor fully developed their systems to learn from customers. To give an example, global bank Citigroup falls into that category. Finally, some companies have few significant advantages to receive from customer learning and automation because of the nature of their industry. These companies, such as Occidental Petroleum or NuCor Steel, can therefore be classified in the Two World Separate Digital Enterprise  type.
This last example seems insignificant but accurately shows that the nature of the industry as well as the size or the background of a company result in very different approaches to transformation into a digital enterprise. Nevertheless, Pereira’s and El Sawy’s mapping is highly valuable to define their roadmap towards the network abundance age.