ISCM Home  »  Sponsors  »  Events  »   2000   »   Intel Supply Network University Day

hosted by

Manufacturing Technology Committee
Chandler, Arizona Facility

Complex Adaptive Giants

Oligopolies of transformed and rejuvenated giants come to dominate as the initial Internet expansion slows

Structure of Commerce

• Growth in the new economy slowed as shares of market for Internet-based services and products hit ceilings
  • Many instances of over capacity as too many players vied for the same opportunity
• As Internet-related growth slowed, a natural period of consolidation ensued in most markets
  • Many incumbents saw acquisition and consolidation as the only way to reduce destructive competition
  • Oligopolies have become the norm in relatively mature markets
• Mergers between old and new economy firms have been common; "click and mortar" integration of virtual and physical commerce is critical to success in almost any market
• High volumes of products or services are required in a world where margins have shrunk through increased competition
  • Being able to effectively manage a large-scale operation on a multinational basis is a key competency
• The giants learn to co-exist with smaller new entrants and leverage their strengths

Business Architecture

• Large companies have also succeeded at transforming into efficient, flexible e-businesses
  • They have made radical changes to their processes, systems, and organizational structures
  • Federated models are dominant
  • They have replaced top-down command and control structures with internal markets that can respond to new challenges quickly
  • Internal markets reward achievers and defuse traditional power politics
  • Managers see the organization in terms of complex adaptive systems that are influenced not controlled
• The architecture inside corporations is largely the same as the architecture outside: federations, ecosystems, and markets
  • The same standards and interfaces are used so that internal and external activities can be easily combined
• Scalable process management is a critical competency

Enablers

• Competition authorities remain generally favorable to large mergers and acquisitions
• Process automation software is widely adopted and successful
• Technology for integrating systems of acquired companies is effective
• Very large-scale computing and communications utilities handle most IT needs now with very high levels of reliability and extremely low unit costs
• Platform technologies for e-business have matured making it easier to find people to support them