Evans affirms that the world is undergoing a re-acceleration of technological change and that something sudden and dramatic is happening. One important aspect of this is how Big Data is reshaping business, and transforming internal organization and industry architecture. He goes on to explain that two information technology drivers are reshaping internal organization: business strategy and the structures of industries. The f irst is deconstruction of value chains: the breakup of vertically-integrated businesses, as standards and interoperability replace managed interfaces. And the second is polarization of the economies of mass, meaning that in some activities, economies of scale and experience are evaporating, while in others they are intensifying.
Straight away, the key features of future companies shall include -
1. Companies will begin to Organize the Business Along Its Potential Fault Lines:
The most important enablers of disruption are standards and interoperability, which break prevailing value chains. The correct response is to organize around that contingency, loosely coupling successive value-added steps and defining organizational units by their distinct competitive economics. Increasingly this means substituting a more functional organizational structure. This gives managers a clear line-of sight on the threats they face, and gives senior managers the option to redraw business boundaries and make incursions into the business models of others.
2. Companies will begin to Devolve Key Activities to Autonomous Communities:
Within such a loosely-coupled, functional structure, some activities emerge as better done by communities of autonomous individuals. These can be users, independent experts, or enthusiasts, most frequently one’s own customers. They can also be communities within the corporation itself: engineers and frontline staff coming together autonomously to swarm over glitches and innovate on features and interfaces. This requires a different mode of management: curatorial rather than hierarchical, enabling rather than directing.
3. Companies will begin to Build Shared Infrastructure:
Both within the corporation and across its boundaries many functions are scaling beyond traditional business unit boundaries, possibly beyond corporate boundaries. In particular data and the distributed commodity computing performed on large data sets, become infrastructure: a resource shared across the company. Private and public cloud computing, and industry-wide data sets built as commons, will be essential to new services in many industries. With personal data, where data rights are crucial, this may require that data repositories be mandated as trustees to protect integrity and privacy.
He concluded by saying and I quote "Ultimately the legitimacy with which corporations use their data, in the eyes of their customers and the eyes of society, will constrain the rate at which the Big Data revolution transforms our world.".
About Philip Evans - Philip Evans is a Senior Partner with the Boston Consulting Group and BCG Fellow. He founded BCG’s Media and Internet practices. He is a Director of the Oxford Internet Institute. He is author of many publications, including “Strategy and the New Economics of Information” which won a McKinsey Prize, awarded annually for the best contributions to the Harvard Business Review. His book 'Blown to Bits: How the New Economics of Information Transforms Strategy(1999)' was a global best-seller.
This excerpt is culled from the BBVA 'Open Mind' publication - Reinventing the Company for the Digital Age
Patrick Ikechukwu(In-house blogger)
