The shift to growth-oriented initiatives is causing companies to reach outside the enterprise to collaborate with others in its supply ecosystem. This multi-enterprise collaboration (MEC) is the technique by which organizations are able to progress along the path toward visible business. Its components involve the availability, analysis, and application of information to generate worth. In this article, we turn to examples of MEC within an enterprise.

MEC WITHIN THE CORPORATION

The term multi-enterprise collaboration need not be taken literally in order to realize substantial benefits. While its words imply that it only encompasses interaction between two or more companies, there are also valid examples where entities behave like autonomous enterprises within a single company.

For example, in industries where growth or diversification through acquisition is widely practiced, it is increasingly common to find enterprises with separate business units, divisions, and in some cases autonomous companies within the corporation. Often, these entities function very independently with little or no collaboration.

In some cases, these are disparate businesses with little in common. In these situations, there may be little opportunity—or reason—for a high degree of collaboration. However, in most instances, there is at least some level at which increased collaboration would benefit the participants, the company as a whole, and—very likely—others in their supply ecosystem. For such situations, MEC should be applied to the interaction between these internal “enterprises.”

Example #1: Manufacturer Internal MEC

Consider, for instance, a national homebuilder—we’ll call them Company X—that grew through acquisition. A significant portion of Company X’s growth had come by acquiring local builders that had a regional presence in an area where Company X did not previously have a footprint.

Company X allowed each of its acquired businesses to operate much the same after the acquisition as it had before. A new division would continue to use pre-existing computer systems and business applications; it would continue to buy from the same suppliers as before (sometimes directly from the manufacturer, sometimes from a local distributor); its product identification and categorizations were kept “as is,” etc. [Figure 1]

The company’s rapid rate of growth—and its willingness to allow each division to continue to operate in a particularly autonomous fashion—meant that the corporation was unable to obtain or leverage a holistic view of their entire business. For example, the product codes—used to order product and track which supplies were purchased and from whom they were bought—had not been rationalized or normalized across divisions. This meant that Division One might purchase a particular product type from the national manufacturer, Division Two might purchase it from a local distributor, and Division Three might be purchasing a substitute product from yet another source.