Everything is evolving towards the Internet, this is a reality. New businesses continually appear in the US. Strolling through any American city we can see signs in stores that announce that they are moving to the Internet. It is logical, lower costs, greater capacity for action, a global market, some customers who are getting used to electronic shopping (USA),… All are advantages to transfer the business to the Internet.
Let's reflect, what do companies like Amazon, eBay, PriceLine, and Yahoo have in common? To begin with, none existed five years ago and neither was a recognized brand in its sector. Today they are leaders in their market segment, they are involved in technology-based businesses, they have changed the rules of the game and have energized the competitive environment. Many are losing money right now, but are creating value fast. The reason is very simple, the market is currently discounting the future expectations of these companies.
What seems clear is that not everything is so simple. You have to have a strategy for entering the Internet. Within a few years, companies that do not sell on the Internet will simply not exist (except for very specific sectors).
The current competitive environment has changed dramatically, the rules of the game are evolving at an unusual speed. We do not know what will happen tomorrow, long-term and even medium-term planning has died. The important thing is today and now. Value creation is an imperative for shareholders. The company that does not create value is destined to die in no time.
The Internet is changing everything: the way of doing business changes, new competitors appear out of nowhere (but they are as powerful as anyone on the Internet), but new opportunities are also being created. These opportunities would surely have seemed unimaginable a few years ago, even a few months ago; but today they are a reality and are revolutionizing the environment.
The way of actually doing business is evolving. The distribution channel is changing towards new models. Companies like DELL make the Network a great distribution channel, forgetting about wholesalers and retailers. The consequences of this reduction of links in the chain produce lower costs and therefore more competitive prices.
Currently, the evolution of all systems based on Web technology is taking place. The concepts of internet, intranet and extranet are absolutely equivalent. Unification is already a reality. It is the same technology that underlies all of them. We can integrate the entire value chain of the company thanks to this unification of technology.
We can call this concept of integration of the value chain “integration of Web ecosystems”. The traditional value chain (Porter) is static and linear, both in its intra-company and inter-company vision. Internal and external processes take place in an orderly, systematic way… and ultimately “slow”. The market cannot wait. The old value chain is dead. Relationships have changed, both inside and outside the company.
The value chain in the Internet age is a flow of web relationships in real time, it is like a great spider web in which multiple companies participate, and their connections need speed above all else. A clear example of this is the current evolution of intra-corporate electronic markets; Without going any further, the well-known “mySap.com” is an attempt to automate this type of relationship within an environment and regulated information systems (obviously by SAP). We cannot forget that the evolution towards the so-called Web-EDI is already a reality.
Another reality within the concept of value chain is that it is evolving towards what we could call “The intangible value chain”. Value is no longer created with tangible assets. It is the intangible assets, the so-called intellectual capital, that really begin to differentiate the achievements of some organizations from others. For this reason the great current paradigm of Business Management is Knowledge Management and the Measurement of Intellectual Capital. Undoubtedly, these trends are providing an interesting explanation for how to create value, since the accounting methods for valuation of companies do not produce acceptable results in such a competitive and changing environment as the current one.
It seems clear that what can generate sustainable competitive advantages is the management of that so-called Intellectual Capital or Knowledge. The important thing on the Internet are, without a doubt, the intangibles.
Traditionally, companies have managed their tangible assets (physical and financial assets), but as we have already mentioned, these resources do not allow them to generate essential skills. If we review the Theory of Resources and Capacities, we see that physical and financial resources are not sources of long-term sustainable competitive advantages. On the contrary, the so-called capacities (resources working in groups) are (they are not easily reproducible), and it just so happens that they are intangible…
It is currently evolving towards the so-called Intellectual Assets. The corporate mindset focuses on managing information, talent, and knowledge. Within not many, the evolution will take place towards the management of intangible assets in all its breadth. The corporate spirit will affect things as imprecise as empathy, trust and relationships. Surely at that time they begin to take seriously things so forgotten by current organizations such as people, emotional intelligence, technology, research, improvements in business processes, relationships with customers, partners, suppliers, and groups of all kinds,… and ultimately with everything that surrounds the company and allows it to function. So far the environment has not required the management of all these intangibles,but in not long time it will become a necessity, if it is not already.
In this environment, new roles are emerging in companies: the CKO (Chief Knowledge Officer) and the CDO (Chief Destroyer Officer). The first would be something similar to the Director of Knowledge Management, and would be in charge of making visible and managing the intangible assets critical to the company's strategy (within an environment determined by a country and an industry). The CDO would be in charge of detecting those resources that do not add value to the organization. A destructive task that seems very distant to us, but that in the US is already a reality.
