The Internet Encyclopedia (Volume 3)

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568 VIRTUALENTERPRISES

yy

Supplier

y

Project Mgmt

Product Design

Process Planning

Manufacturing

Testing

Assembly

y

Supplier

Supplier

Figure 1: Intra-nation VE collaboration.

Characteristics of a Virtual Enterprise

The concept of a VE is not new. However, very few partner-

ships can truly claim to have functioned as a virtual enter-

prise. In this context, it is important to highlight a few as-

pects related to the historical development of VEs. There

are various definitions and connotations of a “virtual en-

terprise.” Numerous reports and articles in newspapers

and magazines tout the “functioning” and “success of long

running implementations” of VE-based practices. A ca-

sual reader who peruses the numerous VE-related articles

(that have appeared in the media) might conclude that VE

implementation is commonplace and such a model has

existed for decades. The key misconception relates to the

degree of “seamlessness” of the information exchange in

a VE. The questions that must be asked by every reader

interested in this topic are as follows:

(1) Is the information merely being exchanged by two

partners or organizations by e-mail or the World Wide

Web?

(2) Is the information being re-processed or used to per-

form some engineering or technical task?

(3) Is the information exchange seamless without manual

re-keying of information?

(4) Is the information sharing mainly restricted to keep-

ing business partners informed of new or occurring

activities?

There are distinctive differences between partnerships

that function as “true VEs” and others that are “quasi-VE.”

The criteria (which can serve as a litmus test) by which

organizations can claim that they have implemented VE-

based practices include the following:

The partners involved must belong to different organiza-

tions and have different core areas of expertise (for ex-

ample, Company P may have manufacturing expertise

while Company F may possess skills in testing prod-

ucts);

The partners must be geographically distributed;

The computer platforms used by the partners must be het-

erogeneous in nature (having different operating sys-

tems such as Windows, UNIX, or Macintosh);

The software systems used in the collaboration must be

heterogeneous and be implemented in different pro-

gramming languages (such as C and Java ); and

The information exchange must be through electronic

means and must be seamless.

A quasi-VE is a partnership where one or many of the

above mentioned criteria holds true (but not all). Most

“global” enterprises today function in a manner that can

be referred to as ‘quasi-VEs’. The most difficult criterion to

adhere is the ability to exchange information seamlessly.

“Seamless” (in this VE context) refers to the automated

translation of information from one data format to an-

other without any manual intervention or re-keying of in-

formation. Many market-leading organizations exchange

design and engineering information by e-mail and then

spend substantial time attempting to extract information

by manual means or by using a variety of software in a se-

quence of tasks. The major drawback of such approaches

is that they negate substantially the advantages these or-

ganizations intended to accrue by adopting a VE-based

model of collaboration. Valuable time and resources are

lost by the inability to exchange information from one

data format to another. This is perhaps one of the great-

est challenges facing organizations interested in adopt-

ing a VE model. While the casual reader may conclude

that organizations communicating through the Internet

in some collaborative manner are functioning as a VE, it

is important to underscore the fact that this is a popu-

lar misconception. Simply using electronic means (such

as the Internet) to exchange information does not guar-

antee greater productivity. Possessing the ability to use

the information (obtained from a partner) immediately in

an accessible format to perform a specific target activity

is the key to realizing the benefits associated with a VE-

based approach. This ability contributes toward the part-

ners being “agile” in a highly competitive environment,

where customer needs keep constantly changing. When

these needs change, a VE partner may decide to team with

a different group of organizations, who may be using a dif-

ferent set of computer tools and data formats. After the

virtual teams and responsibilities have been identified, a

major issue that must be addressed is the nature of the

information and data being exchanged. If this issue is not

adequately addressed, then the distributed partners will

lose substantial time in accomplishing their collaborative

activities quickly. Consequently, the role of computer ar-

chitectures that support the seamless exchange of infor-

mation and the importance of data exchange standards

needs to be better understood.

Quasi-VEs began appearing in the late 1980s and

early 1990s. These include companies such as McDonnell

Douglas Aerospace and Ford, among others. Today, many

companies (including Boeing) are beginning the migra-

tion toward being a true virtual enterprise. Most of them

are facing challenges in exchanging information seam-

lessly (which is a major technical problem) as well as in

developing mutual trust with new partners (which is a

cultural problem). In the future, successful VEs would

be those organizations that emphasize the use of struc-

tured proven methods to aid in tasks such as virtual