September 03, 2008, 9:55 AM — There is a lot of noise in the technology market regarding virtualization, but the data points fail to be applicable to the bigger picture of organizational readiness for executing on virtual business processes. We see dozens of vendors and many user conferences promoting a story around hardware-centric solutions to virtualization. However, the greatest value of virtualization that continues to add value exponentially and provide a sustainable competitive advantage to businesses of all sizes is the ability to virtualize business processes. When it comes to technology and technology implementations, it is at the process level that differentiates one firm from another.
This blog aims to explore the virtual business, business process virtualization, organizational readiness and the leadership model necessary to successfully implement a virtual business. The beauty of a virtual business is that it does not have to be implemented all at once. Incrementalization, or the strategy of executing in small, measurable, manageable steps is the secret behind a successful virtual business strategy. The ah-ha behind IT readiness and virtual business processes is the unequivocal need to be able to integrate the companyâ€™s critical business processes. If the technology cannot be integrated across the company, then IT is wasting the companyâ€™s time and money. This is where the role of organizational leadership comes in to play.
Organizational leadership in the virtual firm is fundamentally different than leadership in an Industrial-Era firm. Donâ€™t get me wrong, the works of Frederick Winslow Taylor and Peter Drucker laid the foundation to scientific process management principals.Â However, these bellwethers were coming at business theory during the Industrial Revolution. Their focus was on improving assembly line efficiencies, the core of most companies in their era. Today we seek to improve the flow of intelligence: intelligence on supply chain, customer satisfaction, distribution, research and development, and other processes. Business processes and how they interplay are at the core of the virtual business.
Leadership readiness for the virtual business hinges on senior management being Internet savvy. Weâ€™ve read the differences in Internet savvy-ness of the US presidential candidates, where one is highly Internet fluent and the other isnâ€™t. The net result in this situation is significantly better campaign fund raising success for one over the other. Ask yourself where your executive level management team sits on the Internet savvy spectrum. Good questions to help determine your firmâ€™s leadership readiness would include:
- Is senior management involved in the IT strategies of the firm?
- Are the IT strategies of the organization focused on value creation and productivity?
- Is senior management promoting the use of web-based applications internally and externally?
- Is generating competitive advantage via the Internet and IT a top priority of senior management?
- Are the Internet and IT initiatives integrated with the business strategy of the organization?
- Does the organization have an e-culture, for example: web-enabled business mindset?
- Does the organization have a culture of information sharing?
A "yes" response to all of the above questions indicates your leadership is Internet savvy and ready to explore a more proactive move into virtual business processes. A â€œnoâ€ response indicates there are challenges within the firm that need to be addressed before senior management is leadership ready. The next blog post will identify the most common hurdles to virtual business leadership readiness and how to overcome them.