Strategic Connectivity In Extended Enterprise Networks


John Tillquist


Extended enterprises are networks of organizations interconnected to exchange critical resources, such as raw materials, labor, access to markets, specialized skills and knowledge. Information technology (IT) is a key component in managing these interorganizational dependencies. IT can be used to disintermediate supply chain partners or, conversely, tightly couple relations by binding operational functions, processes, strategic plans and knowledge. As IT strategies are developed and implemented, how can organizations visualize and manage interorganizational linkages to gain or maintain competitive advantage? To address this problem, this paper uses the Dependency Network Diagrams (DNDs) representation methodology to augment existing strategic frameworks. DNDs diagrammatically depict the exchange channels, governance controls, and roles within the extended enterprise. DNDs enable the essential elements governing interorganizational relations to be captured and communicated, compared with alternative arrangements, and evaluated in terms of performance and flexibility under changing conditions. With this new tool, organizational strategists can systematically analyze and compare alternative arrangements of electronic channels with an emphasis on deploying interorganizational processes and control systems that synchronize activities across the trans-organizational interface. This research was funded in part by a research grant from a University of California Academic Senate Research Grant.

Published Date: 

May, 2002

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