Transcript Virtual Company

Virtual Company
What is virtual company?
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The virtual company is a temporary network of
independent companies-suppliers, customers-linked by
information technology to share skills, costs, and access
to one another's markets.
It will have neither central office nor organization chart.
It will have no hierarchy, no vertical Integration.
Instead of a physical address as registered offices ,it has
IP address.
Instead of faxes they use email, and so on
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Virtualness is defined as the ability of the organization to
acquire and maintain critical competencies through its
design of value-adding business processes and
organizational structure.
The Evolution of Virtual Company
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The term was a buzzword in the 1990s for several
reasons.
The concept became popular during the dot-com era,
when demand was high for new kind of services that
traditionally organized companies relied on outsourcing
to perform.
In the day of the dot-com related businesses it seemed
like everyone was so busy that they had to outsource
most of their jobs to someone else.
The idea that you actually didn't need to have a large
number of regular employees to be a major player
caught on, and thus virtual corporation became one of
the typical ways of describing this phenomenon .
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The motives for virtualization are many and varied.
Often it is seen as a way of reducing complexity, thus
permitting greater flexibility of response.
Other reasons include basic legal conditions or an
improved incentive system that hamper vertical
integration.
Evolutionary Stages Of Virtual Company
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Stage 1: a network of companies is formed that supplies the
same goods or services to the market.
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Stage 2: Use of Inter-enterprise information systems. This stage
is often accompanied by the introduction of Electronic Data
Interchange (EDI) and just-in-time delivery arrangements .
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Stage 3 : The third evolutionary stage is characterized by
the integration of customers and/or suppliers into the value
adding process.
Here, too ,information systems play a significant role.
Dimensions of Virtualness
a corporation passes through three stages of virtualness,
whereby it aims to achieve efficiency in three main
areas:
 resource efficiency
for example:out sourcing virtual storage strategic
partnership
 market efficiency
for example :EDI ,web marketing ,etc.
 process efficiency
for example:wireless technologies by implementing
virtual organization
Information and Communication Systems
in Virtual Corporations
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Electronic interoperation is supported by three pillars :
automation of information flow and the elimination of
media breaks )machine-to-machine communication:
EDI(
the interchange of unstructured data (human-to-human
communication :Groupware(
the linking of several local area networks into wide area
networks man-machine communication both within and
outside the corporation's site(
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In virtual company, partners change as the markets
change.
This means that it must be possible to implement such
changes quickly without sacrificing the necessary
security.
System functionality must be as broad as possible in
order to support the three forms of communication
mentioned above .
This places very high demands on standardization.
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“When we talk about virtual corporations today, we're
mainly talking about alliances and outsourcing
agreements,” says JohnSculley, chairman of Apple
Computer Inc.