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Beyond Process-Centering Emerging Capability—and Alliance-Based Business Models

Beyond Process-Centering Emerging Capability—and Alliance-Based Business Models

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Published by: api-3708087 on Oct 14, 2008
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05/09/2014

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Point of View
Ideas that create the future

The considerable rewards of process-centering, as experienced by 15 organizations in the United States, Canada, and Europe, were recently uncovered by the Accenture study, "Process-

Centering: New Relevance for the eEconomy".1The study shows
how these organizations achieved considerable performance
improvements and gained access to new competitive
opportunities by making the monumental shift required by

process-centering.

Process-centering is the shift from a vertical orientation with
distinct functional areas\u2014such as marketing and
manufacturing\u2014to a horizontal orientation with end-to-end,
cross-functional business processes\u2014such as order fulfillment
and product development. This shift permeates all the
components of business process performance\u2014strategy,
organization, performance measures, skills, culture, and
systems\u2014to create an environment that measures and
reinforces process behavior.

But this transition\u2014as dramatic as it is\u2014is not the end to
the story. Many process-centered organizations discovered
that the process-centered organization model, while a
worthwhile destination in itself, can also be a stepping
stone to emerging capability-based and alliance-based
business models.

Emerging capability- and alliance-based business
models
Figure 1 represents the typical progression of traditional

organizations beyond process-centering. In many cases, their
continued focus on process resulted in new or greatly
improved business capabilities: that is, a collection of
interrelated process components that deliver high
performance and value. Whereas the replication of an
organization's redesigned processes may be simple, the
configuration of components that make up a targeted
capability is much harder to orchestrate. Consequently, well-
designed capabilities represent the building blocks of
competitive advantage. Armed with such an advantage, some
capability-driven organizations uncovered new competitive
opportunities and began to divest themselves of capabilities
that did not create value.

These capability-driven organizations were able to form
alliances to address market opportunities they would not
have been able to address effectively alone. Consider Los
Angeles-based New Energy. Following its first year of
operations in the deregulated California market, New Energy
redesigned its processes to build the business capability of
providing reliable, low-cost energy with timely and accurate
bills. New Energy's strategy\u2014to maintain a first-mover
advantage in providing integrated, high-value energy
solutions\u2014prompted it to seek out alliance partners with
complementary capabilities.

One such alliance partner was Johnson Controls, which has
the capability to monitor and switch energy equipment
remotely. This capability, combined with New Energy's
capability, provides customers with a high-value energy

Beyond process-centering: Emerging capability- and
alliance-based business models
Martha M. Batorski and William J. Hughes
Capability 1
Capability 2
Capability 3
Stovepipe, traditional
Process-centric
Capability-driven
Alliance-based
Process 1
Process 2
Process 3
Capability
1
Capability
2
Capability
3
Figure 1: The evolution to new organization models enabled by process-centering

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