Plug and Play: Towards a Component-Based Business

component-based development -> component-based business

towards the component-based business

systems thinking on loosely coupled enterprises

component-based business

examples

resources

book

Three Business Agendas

Constructing business from independent components
Developing independent business components / services
Restructuring business into components

A fourth agenda involves regulating complex and dynamic markets. There is a huge gap between the effective regulators and the others.

Recent News Aspects of the component-based business can be found in the news every day.

mergers / demergers
outsourcing / franchising
mission / coalition

There have been some big failures recently:

Railtrack
Concert (the joint venture between AT&T and BT)

At the same time, there have been some notable successes.

Tesco Personal Finance (joint venture between Tesco and Royal Bank of Scotland)

We need to understand the difference.

Management briefing

White Papers & Background Papers

Read the introduction online

Component-Based Business - Recent News and Comment

veryard projects > component-based business > news


	Eager outsourcers thought they had offloaded all the headaches of manufacturing, reserving for themselves the sexy areas of product innovation, marketing and customer understanding. Alas, the lesson of 2001 is that, even if you outsource the messy details of manufacturing, you cannot avoid economic exposure. Source: Peter Martin, Financial Times, September 24th, 2001 See also: Why Cisco Fell: Outsourcing and its Perils. Lakeman, Boyd & Frey. Strategy and Business, Q3 2001.
	Donald Rumsfeld (Defence Secretary) told CBS television: "The mission determines the coalition and we don't allow the coalition to determine the mission." Yet Colin Powell (Secretary of State) made almost the opposite point, stressing the importance of keeping a broad coalition together. Source: Financial Times, September 24th, 2001
	Abbey National gives franchises to local managers, after a successful experiment with shadow franchises. Source: Financial Times, September 24th, 2001
	BT and AT&T terminate the Concert joint venture. Source: Financial Times, September 24th, 2001 BT publishes plans for the demerger of MMO2. The move was originally seen as a way of releasing the value of BT's mobile operations when mobile telephony was, along with the Internet, the fastest-growing technology business. Source: Financial Times, September 24th, 2001 The demerger of MMO2 is overshadowed by unexpected liabilities in the remaining parent group. The biggest uncertainty stems from BT's efforts to renegotiate the structure of Concert. Negotiations are more complicated than previously realised, because of another joint venture with AT&T in Canada. Source: Financial Times, September 25th, 2001

component-based development -> component-based business
Three Agendas of Component-Based Business
veryard projects > component-based business > three business agendas

Component-Based Business means creating or transforming a business operation or process by connecting components from different companies. There are three ways that a new or established business might take advantage of this.

Constructing a Business From Independent Components Developing Independent Business Components and Services Restructuring the Business Into Components

Typical goals

Rapid low-risk entry into new markets

Short-term profits

Longer-term flexibility, survival and growth

Typical concerns

Defining and maintaining the business kernel

Finding and negotiating third-party components and services

Balancing stability (trust) with dynamic response (freedom)

Typical goals

Creating and marketing an autonomous business component to provide business services

Typical concerns

Defining and maintaining stable yet flexible service interfaces and protocols

Aligning internal capabilities with external demand

Evolving the service to maintain and improve market penetration

Typical goals

Improving organizational flexibility and performance

Accommodation of mergers and acqusitions

Satisfying industry regulation

Typical concerns

Creating and exposing internal interfaces

Overcoming fragmentation - maintaining business integrity

Customer service and brand management