Vision

In the previous sections, a complex whole of social and business organisational developments was described, that forces companies to drastically change their business operations and their resources. This does not concern superficial changes, but far-reaching transformation processes. In this section we describe a number of approaches that can be taken towards such transformations. In doing so we do not only take the internal business processes into account, but also the product and service portfolios and the relationships with customers and suppliers.

Basic approaches to transformations
We will describe three basic approaches companies can take towards the transformation of their business operations.

Business Scope Redefinition (BSR)
BSR means that the scope of the company is redefined. In doing so, the company focuses on the development and introduction of new products or services, thus also creating new markets for itself. This also applies when the company enters completely new markets with existing products or services, or somewhat new varieties of those.

Business Network Redesign (BNR)
BNR means that companies transform the way they co-operate with other companies and private individuals. An example of this is the forming of strategic alliances to arrive at standards for new products or at the joint production of new products. In this case, BNR reinforces the BSR. Another example is that of chain integration in a network of suppliers and manufacturers. This may lead to advantages in terms of a reduction of the time-to-market and the time-to-deliver, a reduction of stocks and an intensification of co-operation. BNR also includes the trend towards the contracting out of work that does not belong to the core activities. The connection of computer systems within and between companies via networks has created the possibility and maybe even the necessity for BNR. The 'borders' of a company are no longer defined by the walls of the office. More and more business processes are taking place 'outside' at other companies or with customers. This is for example the case when financial companies create an extended office in the form of home-banking systems for private clients or in-house banking systems for companies.
BSR usually also means BNR, since new products and markets also affect the relational network.

Business Process Redesign (BPR)
BPR is a thorough transformation of the business processes of a company. All the activities that are part of an operational or controlling task of the company are restructured as a whole. Unlike BSR and BNR, BPR therefore focuses on the internal organisation. BPR often leads to spectacular cost reduction and performance improvements, especially when IT-supported BPR is applied intensively. In that case, all the possibilities for cost reduction or performance enhancement that can be achieved through the application of IT, are investigated and used systematically. It is therefore not surprising that in many companies, especially administrative companies with a great deal of data processing, BPR is a hot topic. The externally oriented BSR and BNR will always require some form of BPR to adapt the internal organisation to the new products and services and to the desired external relational networks.

Creating new businesses
Business transformation by means of IT can help companies to create new businesses and new markets. In doing so, they will rarely be competing with existing companies. This requires foresight of companies. They have to have an idea today of the products and services they will be delivering tomorrow. They have to be in time to develop the knowledge and skills they need for these new operations, including the use of IT. When defining their strategy, companies are wise to vote in favour of the redefinition of their business scope and their business networks. It is of strategic importance in this matter to form strategic alliances with other companies in order to be able to create new products and services. In the long run, this emphasis on BSR and BNR will be more profitable for companies than the redesign of the existing business processes by means of BPR. If a sufficient number of companies succeeds in finding new markets, this will also have social advantages, since the overall industriousness increases. This provides a contribution to solving the current unemployment problems.

More emphasis on BSR and BNR has another consequence. Many forms of BPR focus on reorganisations that assume a confinement of the business operations to the so-called core activities of the company. All other activities of the company are contracted out. This trend has been going on for some time now.
BSR and BNR are much more based on the knowledge and skills available within a company. Human and other resources form the working capital of the company. This rather novel business trend implies that people are explicitly focusing on the new forms of products and services that can be created with the core competences available within the company. There is a deliberate choice for the confinement to the own basic 'power': in der Beschränkung zeigt sich der Meister, only now on a business level.
This trend is oriented more towards the future, since the company is aiming for new products, services and markets. This trend also allows for an improved resource management in order to be able to realise the company's vision. This, for example, means having and keeping available the right people with the right knowledge and skills and going through the learning process for the required IT resources.

The implementation of drastic innovative transformations runs via different tracks, for example business processes, infrastructure, IT applications and the organisation of human resources. We therefore speak of concurrent transformation. In existing organisations this is a complex and costly process which is difficult to control. Success is therefore not always guaranteed. Sometimes the board will have to create a completely new organisation alongside the current company, in order to more or less avoid the problems of the existing company. The old company will eventually cease to exist.

In order to realise their vision of the future, companies will have to develop a strategy and a policy in which co-operative competition plays a structural, but also a dynamic role. Co-operative competition forces companies to consider whether they have to co-operate or compete. In future, the emphasis will more and more be on co-operation. This is necessary to arrive at common standards that create room for new products and services, to be able to develop and produce new and highly complex products and services and to be able to provide a joint contribution to the solution of the present social problems. The large investments that are required also necessitate the formation of common investment funds that can be used to cover the costs of the development of new products and services, of setting up the required infrastructure and of the training of staff.

Transformation and the echelons
Business transformation by means of IT also has consequences for the human organisation. The transformation involves changes in all the echelons of the human organisation of a company. We will briefly describe them here. In doing so, we use a model of the internal organisation that is derived from Mintzberg. This model can be seen in figure 2.4 on the left-hand side.

Figure 2.4 Structure of the internal organisation according to Mintzberg.

To begin with, Mintzberg follows the classic distinction between the line organisation and the staff organisation. As far as the staff is concerned, he goes one step further, however. He distinguishes between two different types of staff units: staff-1 - the specialist and development units (the technostructure, according to Mintzberg) - and staff-2 - the support staff. The line consists of the operational core, the middle line and the strategic apex. On the right-hand side in figure 2.4 examples are given of the organisational units belonging to the various main constituents of the organisation.

The main constituents of the internal organisation have certain tasks and responsibilities concerning the execution of certain functions in the business operations. We provide a brief explanation of these below, in combination with a brief description of the consequences of these transformations for the nature and distribution of tasks and responsibilities of the people in the company.

The strategic apex is responsible for the destiny of the entire company, and therefore points out the course the company takes in its preparations for the future. The apex concerns itself with matters such as the complete policy definition, the future and the strategy, the corporate image and the long-term availability of the right people and resources.
The rapid changes companies are currently confronted with require the strategic apex to devote more attention to the forming of a vision, a strategy and a policy than it has in the past. More attention is also required for the monitoring of the long-term consequences of the policy. The strategic apex will have to give a great deal of consideration to co-operation and competition with other companies.

The main task of the staff specialists (staff-1) is to perform research and development for the company. This involves tasks such as the design and implementation of new products and new work procedures, opening up new markets and developing and giving training courses to employees.
The tasks of the staff specialists are growing, because of the continuous adaptations and innovations and the increasing complexity of products, services and processes.

The main task of the support staff (staff-2) consists of providing services to the rest of the company. These services concern the organisation and maintenance of the company infrastructure, including IT, security and tasks such as transport, reproduction, mail room and cafeteria. Such departments work as small companies for the rest of the company.
The support staff will play an important role in setting up the IT infrastructure for the new collaborative systems. Many companies are in the process of contracting out or privatising their supporting tasks. Especially with respect to IT support, this trend is expected to continue in the coming years, particularly in view of the large amount of specialist knowledge the new IT applications require.

The task of the middle line is to translate the vision formulated by the strategic apex into the appropriate operations. The middle line also controls the relations between the staff units (and the services contracted out) and operations. The middle line controls the mid-term operational business processes. This control is aimed amongst other things at capacity planning (people and resources), finance and the control of large orders.
As a result of the transformations, the middle line will become smaller. Echelons will disappear in this process. Middle managers will be (even) less involved with the direct operational management. Computer systems will be used more explicitly for the control and monitoring of the business processes, even more so, because the operational teams will have a greater degree of personal responsibility. As a result of the enhanced flexibility of the business processes the operations monitoring will continue to require a great deal of attention. Performance and risks in particular, need to be watched closely. The co-operation with the staff units will become more intensive, as external changes will have to be responded to quickly and flexibly. In case of large changes, the staff must start the design and the configuration of resources for new products, services and processes at an early stage.

The operational core is in charge of the actual execution of the primary business processes of the company. This includes the daily control. The operational core delivers the product and provides the services to the customers. The operational core also purchases products from third parties, to serve as input for the company's production processes.
As a result of the transformations, the people at the operational level are confronted with a widening scope of their work and with increased responsibility. The accent shifts more towards working in teams. As a result of the ongoing automation of routine tasks, less tasks remain that concern the actual production processes of products and services. Sales tasks are growing, because of the fact that individual wishes of customers are catered to and the array of services and products becomes more complex. This also applies to the purchasing side, where more tasks emerge, for example as a result of the intensified collaboration with suppliers. These developments will lead to higher requirements made of the knowledge of employees who are responsible for the external relations.

To change means to learn
However fast social, business organisational and technological changes are taking place, people remain the central factors. People are the ones to initiate change. People are the ones that have to learn to handle the new possibilities. People have to learn in the long run from the consequences of the changes and where necessary they have to monitor and control the developments. This makes high demands of their creativity and learning capacity.

In periods of transformation, companies have to devote a great deal more attention than before to the learning processes of their employees. What do the changes mean for the individual employees, what are they confronted with, which learning processes must they go through and how can they contribute to this themselves? What are the implications of the increase in for example multidisciplinary collaboration, flexible assignation, personal responsibility and the necessary knowledge and skills?

Permanent education is more and more becoming a bare necessity for company and employees. The destiny of both will eventually be affected strongly by this. Both parties will therefore have to spend a great deal of time, money and attention on this. Learning processes, learning resources and learning curves will start to become an integral part of the business operations.
In the light of its long-term goals, the company invests time and money in the learning process of the employees and each employee aligns his personal development to these goals, insofar as they correspond with his own idea of the future. This is a shared responsibility of managers and employees. In this process, departments and teams increasingly take over the responsibility for training and development from the central training department. In the role of inspirer, mentor and coach, the department manager draws up a personal development plan in close consultation with each employee. In this plan, the individual learning goals of the employee, and the allocated budget for a specific period are laid down. An important aspect in this matter is that employees must have enough time and attention to allow them to think and consult about their work and learn from it.

More and more, employees work in teams. These teams must take the time to learn from the results and make agreements on the required adaptations. A more experienced employee will function as the mentor of a less experienced employee. This supports learning at the workplace. It stimulates and motivates to learn together during the execution of tasks. This way, individual and professional development go side by side with team building and collaboration. This learning process is further enhanced through job rotation.
A company that works in this way becomes a 'learning organisation'. A positive learning attitude of each individual employee, mutual consultation and an organisational culture that stimulates learning are the main pillars of such an organisation.

Active knowledge management
The emphasis on the core competences of a company also implies that more attention must be devoted to the active management of knowledge, skills and experience of all employees. It is of strategic importance that the organisation as a whole can dispose of the right knowledge, insights, skills, attitude and practical experience to be able to realise new products and services. Knowledge, skills and experience are present everywhere, in people, of course, but also in documents, checklists, operation instructions or manuals, in machines and tools and in the development and the configuration of resources in the working environment, in the corporate culture and in co-operation and in the norms and values. Accessibility of knowledge and skills is a critical factor for the success of a company. Another important factor is that employees must be prepared to and must get sufficient time to record their knowledge and experience and exchange them with other colleagues. This implies that each company owes it to itself to critically inspect its own knowledge management. In many companies, active knowledge management is still in its infancy. Active knowledge management for example concerns making knowledge transferable through collecting it, recording it and opening it up by means of IT. Knowledge management supports the transfer of knowledge via learning processes and the transfer of experience through learning at the workplace. It also stimulates the personal development of employees. Active knowledge management concerns the learning ability of a company as a whole. For the employees this not only means learning the right knowledge and skills, but also and especially, unlearning knowledge and skills that have become obsolete. This is of great influence to the company's flexibility. Especially holding on to successful habits of the past prevents a company from transforming on time.