VOSTER VOSTER Workshop 17.6.03-1- VTT Industrial Systems Work Package 1: VO-Concepts VOSTER –...

VOSTERVOSTERVOSTERVOSTERVOSTER Workshop 17.6.03 -1- VTT Industrial SystemsVOSTER Workshop 17.6.03 -1- VTT Industrial Systems

Work Package 1: VO-Concepts

VOSTER – Virtual Organisations Cluster

Workshop 17.6. 03 Espoo

VTT Industrial Systems

Iris Karvonen


WP1- VO ConceptsPresentation Overview

1. Objectives of Workpackage 1 in Voster

2. VO Concepts & definitions

3. Analysis & Conclusions


Vision and Objective:To define a European reference for VO core concepts

Collect, aggregate, synthesis and consolidate VO practices and results in research and industry : First round:

Voster cluster projects, Second round:

Activities outside Voster

Analyse, evaluated and consolidate approaches for different Virtual Organisations Concepts and types

Establishing a common framework of Virtual Organisation Core Concepts

1. VOSTER WP1: VO ConceptsVision and objectives

Description:


WP 1: Procedure

T11 - Information acquisition on VO concepts and approaches

with focus on VO Cluster Projects (Phase I)External sources (Phase II)

Developmentof the questionnaire

for the analysis Questionnaireanswered

by partnersPerform the

analysis & synthesis

Report

Common VO terms r


Smart organisation

Virtual OrganisationVirtual Enterprise

Enterprise Network

Breeding Environment

Extended Enterprise

Source Network

Enterprise Constellation / Constellation of Enterprises

Regional Network

Cluster of Enterprises

Virtual CompanyBusiness Network

Strategic Alliance

Networked Organisation

Advanced Fractal Company

Dynamic Inter-Organizational Network

Inter-firm Network

Dynamic Network Arrangement

Networked Corporation

Supply Network Flexible Value Network

Network Enterprise

Dynamic SME Network

Organisational Concepts in eBeW 2002 (Challenges and Achievements in e-Business and e-Work)

Virtual factory

?


VO Definitions

“The virtual organisation is a set of co-operating (legally) independent organisations, which to the outside world provide a set of services and a functionality as if they were one organisation. The set of co-operating organisations can change with time; it can be a dynamic configuration depending on the function/service to be provided at that point in time. It can also be a more stable configuration with a sizeable time span and a stable set of services and functions.” [Source : EC; http://europa.eu.int/ISPO/ecommerce/books/aecev2/2_1.htm]


“A virtual organisation is one that is compromised of semi-independent entities with separate core competencies that band together to achieve a prescribed or subscribed business objective via the Internet. The most common industries for virtual organisations are information technology, manufacturing, and consulting, but can exist in any industry where the marketplace desires multi-faceted services or products that require very costly logistical or infrastructure investments.” [Source: MBDA, 2001, http://www.mbda.gov/templates/ printer.php?content_id=538]

VO Definitions


“Organizational structures are called virtual, if legally independent enterprises, institutions and/or individuals, which appear and cooperate with the others as one enterprise, in order to pursue common business interests. Co-operation can be based on either a stable (static) or a dynamic network. A characterizing feature is a substantial application of information and communication technology (ICT) for the support of intra- or inter-company coordination and cooperation for the compensation of central management functions of the enterprise. Virtual organizations aim at the optimization of the value creation chain by bringing in core competencies, as well as the spread of risk, costs, etc. of the individual partners.” (Peter Weiß, Forschungszentrum Informatik, “Virtual Business Networking – State of the Art”, Karlsruhe 2000)

VO Definitions


VE Definitions

Virtual Enterprise: A virtual enterprise is a particular case of virtual organisation. Typical definitions of a virtual enterprise are the following:

"A virtual enterprise is a temporary alliance of enterprises that come together to share skills or core competencies and resources in order to better respond to business opportunism, and whose co-operation is supported by computer networks." [Source: The virtual enterprise concept; L. M. Camarinha-Matos, H. Afsarmanesh, in Infrastructures for Virtual Enterprises, Kluwer Academic Publishers, 1999]

“A customer solutions delivery system created by a temporary and reconfigurable ICT enabled aggregation of core competencies.” [Source: GLOBEMEN.]


VO/VE

• using core competencies from independent organisations/ enterprises

• temporary alliance for a specific purpose/ customer solution

• ICT enabled and supported


Voster glossary

VO/VE is used for describing an operational structure with a specific business purpose as opposed to a non-operational source network of organisational entities, from which the VO/VE can quickly be formed.


VO lifecycle


Voster glossary

Network/ Source Network:Is a cooperative setting of organisational entities with some autonomy.A group of organisational entities with some linkage (ranging from an almost open market setting with just some knowledge about the entities between them to entities within a large company or other organisation) from which the VO/VE can quickly be formed.In the case of different companies cooperating it can be called “enterprise network”: A group of companies who agree to harmonise their procedures and interfaces in order to be able to quickly set up VEs. (Source: Globemen)


Two types of entities

Network

State of Preparedness for cooperation

- collaboration methods, processes, procedures, tools defined

VO/VE

Temporary consortium for a specific task

- customer specific task- creation, operation and dissolution


Smart organisation

Virtual OrganisationVirtual Enterprise

Enterprise Network

Breeding Environment

Extended Enterprise

Source Network

Enterprise Constellation / Constellation of Enterprises

Regional Network

Cluster of Enterprises

Virtual CompanyBusiness Network

Strategic Alliance

Networked Organisation

Advanced Fractal Company

Dynamic Inter-Organizational Network

Inter-firm Network

Dynamic Network Arrangement

Networked Corporation

Supply Network Flexible Value Network

Network Enterprise

Dynamic SME Network

Organisational Concepts in eBeW 2002 (Challenges and Achievements in e-Business and e-Work)

Virtual factory

Long term Temporary


Smart Organisation

Smart organisation:

Knowledge driven, internetworked, dynamically adaptive to new organisational forms and practices, learning as well as agile in their ability to create and exploit the opportunities offered by the digital economy. (Source: IST 2000 work program, Action line II.2.2)

Smart organisation Virtual organisation

but a VO is one possibility to implement a Smart organisation


Interacts with

Goes to

Contributes to

Delivers

Prepares / agreesSupport delivery of

Implements, complies with & uses

VEVE NetworkNetworkProductor serviceProduct

or service

......

StandardsStandards

ICT platformICT platform

ProceduresProcedures

Enterprise(legal entity)Enterprise

(legal entity)

CustomerCustomer

Participates inLeadsInitialises

Coordinatesco-delivery of

Shares,

collaborates using

Entity relationships


2. WP 1: Task 12 Methodology for analysis

1. Concept purposes

2. Characteristics of Virtual Organisations

3. Concepts

3.1 Management concepts for source network

3.2 VO Management concepts

3.3 VO Operational concept

3.4 VO Support concepts

3.5 Structures of Virtual Organisations

3.6 Management Roles of Virtual Organisations and Source Networks

1. Concept purposes

2. Characteristics of Virtual Organisations

3. Concepts

3.1 Management concepts for source network

3.2 VO Management concepts

3.3 VO Operational concept

3.4 VO Support concepts

3.5 Structures of Virtual Organisations

3.6 Management Roles of Virtual Organisations and Source Networks


Analysis of the VO concepts

CE-NET

COVE

E-COLLEGE

EXTERNAL

ICCI

Gnosis

UEML

Symphony

NIMCube

Projects with no relevance for the analysis in WP1

e-MMIDATE

VIVE, ALIVE and BIDSAVER

BAP

eLEGAL

FETISH-ETF

GENESIS

GLOBEMEN

iCSS

ISTforCE

Analysed projects

MASSYVE

NGMS

OSMOS

PRODNET II

VDA

VL

e-COGNOS

ProDAEC

ProdChain

EKMF

ThinkCreative

• 20 projects of the VO Cluster have been analysedin detail, concerning VO concepts and approaches

• 11 projects have no relevance for the analysis

• 20 projects of the VO Cluster have been analysedin detail, concerning VO concepts and approaches

• 11 projects have no relevance for the analysis


VO concept - purpose

Practical purpose of concepts • In many projects business process redesign in the

inter-organisational environment

• Different projects address different product life cycle phases, environments and issues (organisational, human, business, legal, ICT)

• Projects expect benefits of operating in VO’s no analysis of differences between the divergent (outsourcing)

and convergent (coming closer) creation of VO’s. not enough empirical data of the benefits objectives of the projects mainly development of tools,

processes and methods

Practical purpose of concepts • In many projects business process redesign in the

inter-organisational environment

• Different projects address different product life cycle phases, environments and issues (organisational, human, business, legal, ICT)

• Projects expect benefits of operating in VO’s no analysis of differences between the divergent (outsourcing)

and convergent (coming closer) creation of VO’s. not enough empirical data of the benefits objectives of the projects mainly development of tools,

processes and methods


VO concept - Success factors

• There is no sufficient analysis of prerequisites, realisation, or dependencies

of the success factors in the projects

• A critical study of the success factors and business drivers of VO’s can be seen as a requirement for further VO research

• There is no sufficient analysis of prerequisites, realisation, or dependencies

of the success factors in the projects

• A critical study of the success factors and business drivers of VO’s can be seen as a requirement for further VO research


Preparedness of a network

• Level may vary

• Tightness of the linkages between the organisations can also vary ranging from an almost open market setting to entities within a large company

• Includes defining core competencies, harmonising procedures and interfaces, creating and sharing common knowledge, etc.

• Enables quick set up of a VO/VE efficient operation over organisational borders

• Investment to the network development needed

Preparedness of a network

• Level may vary

• Tightness of the linkages between the organisations can also vary ranging from an almost open market setting to entities within a large company

• Includes defining core competencies, harmonising procedures and interfaces, creating and sharing common knowledge, etc.

• Enables quick set up of a VO/VE efficient operation over organisational borders

• Investment to the network development needed

VO concept - Source network


Concepts – Management concepts for source network (I)

• Main process considered at the source network level inclusion of a new partner to the network

rules policies tools

• In industrial cases source network already existed no need to create the network from the beginning development of the network preparation

procedures, tools and services for the existing network product development within the source network is also mentioned

• Projects have not aimed to describe the overall picture of network management an overall approach can be found in the GLOBEMEN project

• Main process considered at the source network level inclusion of a new partner to the network

rules policies tools

• In industrial cases source network already existed no need to create the network from the beginning development of the network preparation

procedures, tools and services for the existing network product development within the source network is also mentioned

• Projects have not aimed to describe the overall picture of network management an overall approach can be found in the GLOBEMEN project


Concepts – Management concepts for source network (II)

• Most common issues work management, relationship management, contract management, knowledge management

• Information sharing and ICT infrastructures web-based tools and services for sharing information:

documentation, product information cost and performance monitoring, support for teamwork and design partner management and selection tools

• Modifications implemented redesign of business processes, organisations and roles, human resource development dissemination of quality standards process improvements and redesign needed to benefit from IT tools

• Most common issues work management, relationship management, contract management, knowledge management

• Information sharing and ICT infrastructures web-based tools and services for sharing information:

documentation, product information cost and performance monitoring, support for teamwork and design partner management and selection tools

• Modifications implemented redesign of business processes, organisations and roles, human resource development dissemination of quality standards process improvements and redesign needed to benefit from IT tools


• At the VO level the topic considered in the projects are: set up and configuration of a specific VO, operation and management of VO’s (including project management)

• Evaluation and dissolution of VO’s are mentioned only inthree projects.

• At this level information sharing is developed for a specific task and VO; supporting also the coordination, people and relationship management

• The modifications needed to implement the concept are similar like at the source network level: socio-organisational, process and technological redesign

• At the VO level the topic considered in the projects are: set up and configuration of a specific VO, operation and management of VO’s (including project management)

• Evaluation and dissolution of VO’s are mentioned only inthree projects.

• At this level information sharing is developed for a specific task and VO; supporting also the coordination, people and relationship management

• The modifications needed to implement the concept are similar like at the source network level: socio-organisational, process and technological redesign

Concepts – VO Management concepts


Concept – VO Operational concept

• Partly similar with issues of VO management

• The VO operational concepts focuses on the totalproduct life cycle:

from sales and marketing product development, through engineering and manufacturing (including scheduling and order management), to

product operation, service and renewal.

• Partly similar with issues of VO management

• The VO operational concepts focuses on the totalproduct life cycle:

from sales and marketing product development, through engineering and manufacturing (including scheduling and order management), to

product operation, service and renewal.


Concept – VO Support concepts

• VO support concept in the projects mainly have focused on financial administration, human resource administration and legal services.

• The VO support concepts have not been in the main focus in most of the projects, but are present.

• One project is focused on legal aspects concerningVO support concept.

• VO support concept in the projects mainly have focused on financial administration, human resource administration and legal services.

• The VO support concepts have not been in the main focus in most of the projects, but are present.

• One project is focused on legal aspects concerningVO support concept.


Some types of VOs

Supply chain:- Clear chain of command- Static

Star (Extended enterprise):- One dominant actor- Static

Peer-to peer:- No dominant actor- Dynamic

Different VO structures


Concept - Structure of VO (I)

Source Network: Mainly Star/Consortia and Peer-to-Peer Topologies Not all projects considered the Source Network, but they recognized the importance

Operational VO structure: Mainly Star/Consortia and Peer-to-Peer TopologiesAll projects considered the ‘Operational VO structure’

VO Governance structure: Mainly Star/Consortia and Peer-to-Peer Topologies The projects considered the ‘VO Governance structure’


Concept - Structure of VO (II)

• Part of the projects address only structures in source network or VO Depends on the scope of the project.

The projects, which address all the three structures, mainly have the same topology for all of them In some of the projects more than one topology is possible. (It may even be configurable)

• At the source network level the “star”-topology refers to networks, which are lead by a strong enterprise

often the case in product-centric networks, which are built around a specific product or product family In “peer-to-peer” networks the enterprises are typically more equal the management structure of a VO created from a ”peer-to-peer” network may be “star-like” The equality of the partners means that not always the same company is the leader of the VO.

• Distributed operations, which aim to a common objective (e.g. a product) cannot achieve the goal without centralised management

Most used is a hierarchic structure, in which at each level the level below is managed in the “star”- topology.

• Part of the projects address only structures in source network or VO Depends on the scope of the project.

The projects, which address all the three structures, mainly have the same topology for all of them In some of the projects more than one topology is possible. (It may even be configurable)

• At the source network level the “star”-topology refers to networks, which are lead by a strong enterprise

often the case in product-centric networks, which are built around a specific product or product family In “peer-to-peer” networks the enterprises are typically more equal the management structure of a VO created from a ”peer-to-peer” network may be “star-like” The equality of the partners means that not always the same company is the leader of the VO.

• Distributed operations, which aim to a common objective (e.g. a product) cannot achieve the goal without centralised management

Most used is a hierarchic structure, in which at each level the level below is managed in the “star”- topology.


Concept - Management Roles of VO and Source Networks

• Management roles are addressed for different product life cycle phasesas well as for different network and VO lifecycle phases

• Most projects have not considered the management roles at the sourcenetwork level

the networks operating in the “peer-to-peer” topology do not have so clear management roles.

• In the network of “star/consortia” topology a management role is more stable

• Some of the projects mention brokers and broker services supporting the management of the VO

• Both in the management of Source Networks and operational VOs the organisation or department has a management role

in addition a single person is mentioned in most cases in some cases an individual is in the background of an organisation in some cases the organisation is in the background of a single person.

• Though a single person seems to be important in the VO managementit cannot live alone without the background support of an organisationespecially in cases, where high responsibilities and risks exists

• Management roles are addressed for different product life cycle phasesas well as for different network and VO lifecycle phases

• Most projects have not considered the management roles at the sourcenetwork level

the networks operating in the “peer-to-peer” topology do not have so clear management roles.

• In the network of “star/consortia” topology a management role is more stable

• Some of the projects mention brokers and broker services supporting the management of the VO

• Both in the management of Source Networks and operational VOs the organisation or department has a management role

in addition a single person is mentioned in most cases in some cases an individual is in the background of an organisation in some cases the organisation is in the background of a single person.

• Though a single person seems to be important in the VO managementit cannot live alone without the background support of an organisationespecially in cases, where high responsibilities and risks exists


Two types of organisational forms:

• Network / Source network / Breeding environment More stationary, not static, group of organisational entities

preparedness for the creation of a temporary VO/VE

• Virtual Organisation or Virtual Enterprise The life time of a VO is typically restricted

created for a definite task dissolved after the task has been completed

• Supported by ICT

Two types of organisational forms:

• Network / Source network / Breeding environment More stationary, not static, group of organisational entities

preparedness for the creation of a temporary VO/VE

• Virtual Organisation or Virtual Enterprise The life time of a VO is typically restricted

created for a definite task dissolved after the task has been completed

• Supported by ICT

VO concept - Summary


Virtual organisation?

Not one real organisation,but composed of parts ofseveral organisations

Utilisation of virtual reality: ICTVirtual work & communicationKnowledge & information work

Is a virtual organisation able to perform any real work and create any tangible end-products?

The two modes of virtuality make it more difficult to understand the concept.Converging in the cluster, but not yet understood in industry!

Temporary consortium or longer co-operation environment

Everything clear or misunderstandings ?


VOSTER • The scope of most of the projects has been developing methods, tools and infrastructures for specific business processes in inter-organisational networks. The concepts have mainly been used but not developed (not always defined).

• The concept information has been collected and analysed from the cluster projects.

• Initially the projects used partly different terms, but now the basic vocabulary has been agreed. Thus it seems that the concepts are converging.

Conclusion


• The analysis dealt with purposes, characteristics, management,operational and support concepts, structures and roles of VOs.• In the current analysis each issue is analysed one by one. The dependencies between different issues are not yet identified.• Thus it is not possible to reason why the presented management concepts, structures and roles are applied in the source networks or operational VOs.• Voster will not be able to solve all the questions but it will make new questions and identify new development needs.

Conclusion

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