Cybercorp,
the New Business Revolution
by James Martin
AMACOM, American Management Association
Pages 326, Price 27.95, 1996
Rapid developments in the field of information technology took the business world completely by storm during the last one decade. Larger, established monoliths like the IBM and AT&T had to bite the dust as they crumbled before small, garage- based shops that rose to sudden glory. Notable among the latter were Microsoft, Apple and more recently Netscape Corporation.
One common, unifying thread among these start- up companies has been their thrust on Information Technology (IT). But not all IT based startup companies have been equally successful. What has made the difference, in addition to the whiz kids in their teens and twenties, is the fact that successful companies recognized the need not only of the great opportunities that IT brought forth, but also the strategic business understanding of how modern corporations in the age of cyberspace must work in order to succeed. Those who realized, and can still realize, the working of a 'cybercorp' have the chance to succeed.
One fundamental way in which a cybercorp differs from a traditional corporation is that it is 'predatory', 'virtual', 'networked' and 'self- learning'. Besides, it must understand its 'ecosystem' and its workings.
Predatory corporations or capability predators are terms used to refer to a corporation that has built expertise in a strategic work area to a level of unbeatable excellence and something which is not easily copiable by competitors, and then it uses this to move aggressively into new areas. One example is the Wal-Mart in the US, which established itself as the cheapest chain of retails by using the latest techniques in IT, and then it rapidly moved into the selling of bulk goods (warehouse clubs called Sam's Club) and within a few years grew to be three times its nearest competitor. Similarly, Microsoft quickly used its capabilities (or incapabilities, some might aver) in the field of operating systems to capture a huge chunk of the word- processor, spreadsheets and related office automation market.
A 'virtual' corporation, on the other hand, is the one in which understands its limitations and is concious of its lack of expertise or resources in a given area. It, therefore, outsources part of its work to a third party. Nonetheless, it provides a complete solution to its customer, and not just a standalone product.
A 'self- learning' organization must keep developing its expertise and capabilities. As a result of rapid technological developments, there has been an avalanche effect- technology is running against itself, as it were. This requires not only constant training, retraining (and perhaps, hiring and firing) of employees, but also learning- by continuous measurements- of the corporation itself.
A cybercorp, asserts the management guru James Martin, must 'network' itself with partners who share core competencies, than merely supply components. Agile manufacturing, the term used for this phenomenon, permits companies to offer individualized solutions while maintaining high production volumes in fast specializing market. Pooling together is the need. An example is the coming together of a number of car manufacturing companies (GM, Ford and Chrysler) to form a consortium to manufacture catalytic converters in order to conform to Federal regulations, which resulted in the sharing of one common plant. Another form of networking can be that of a cybercorp web in which companies with different core competencies come together for a short time to meet the market demand. These associations must be as quick to form as to dissolve.
Finally, the complexity of products has increased so much that it is no longer possible for a growth- oriented company to stick to one product or even one area of work. It requires understanding the dependencies and linkages in the dynamically evolving market. A cybercorp ecosystem is a community of cybercorps constantly interacting with one another and with their environment, evolving each component to keep pace with the change.
The book is targeted primarily for the senior executive. Hence it is easy to read, has numerous graphs and pictures and a sufficient number of buzz- words.
On the whole the book offers an interesting peep into the world of big corporations in the era of IT. The discerning reader may find a lot of old wine in new bottles. For instance, the ecosystem concept is an extrapolation of the long- known concept of backward linkages (in which our own Dhirubhai Ambani excelled)- indeed that is a fundamental way of operation of the modern monopolies since early twentieth century.
'Core- competency' is a concept more likely to be misused against the underdeveloped world- for an implicit connotation is that in the age of globalization, the core- competency of the Third World is lies in export of raw material and cheap labor. Martin himself hints at this repeatedly. The core competency of the First World, on the other hand, lies not in the activity of muscles, but in the activities of the mind, in research and development.
Bhupinder
The Tribune, 24 March 1997
