Core & Peripheries

Economic value will shift to the ends of the networks, as a result of the decoupling of intelligence in a network. Subsequently, companies have realized that they need to change their focus to the core – the back-end intelligence that is farthest away from the user – and the periphery – the front-end intelligence that is closest to the user. This separation of value to the ends has thus created an opportunity for organizations to optimize their business functions around the ends. Common Infrastructure

As in the case of the PC at work, there was a clash between what the users wanted: easy-to-use, portable, and flexible at the front-end; powerful and reliable at the back-end. In trying to provide both requirements some necessary design compromises had to be made previously. However, with the decoupling of intelligence in networks the two ends could be separated and a common infrastructure provided at the back-end, in the form of one server in the IT Department of the office, while the front-end intelligence could be made without compromise as specialized machines.

Similarly, disparate elements within the company can be combined to form shared infrastructures that are more cost-effective in their specialization. Modularity The mobilization of intelligence is another pattern that has resulted in a trend that has shifted economic value in the network. Sawhney and Parikh (2001) have discovered that the importance of plug-and-play has been established by the subsequent modularity of devices, softwares, and processes into self-contained modules that can be assimilated into a new value chain as needed.

Sharing of capabilities is more important in this regard, than safeguarding of proprietary assets. Orchestration With increased modularity, it has become more and more economically valuable for there to be companies and managers that are able to coordinate, organize, and connect the different modules into new value chains. HP and Cisco are such examples of companies that are seeking to become the intelligent hubs to coordinate their various stakeholders, and are thus reaping the lion’s share of the value in their respective networks. Conclusion In the words of Sawhney and Parikh (2010, p.

79): “By learning to recognize two simple patterns in the evolution of networks, you may be able to turn chaos into opportunity. ” It is the intelligence of the network, more specifically its location and mobility as established by the recent advancements in technology that determines the way that companies organize disparate pieces of information, products, people, and the market, and consequently, how to maximize the inherent value. References Sawhney, M. & Parikh, D. (2001). Where Value Lives in a Networked World. Harvard Business Review, 79, p79-86. Retrieved May 02, 2010, from Harvard Business Review.

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