The Changing Dynamics Of Organisational Structure

Updated: Aug 31 2002, 05:30am hrs
There were times when physical assets signified the strength and success of a company. When control over assetsphysical and financialgave a company the competitive edge. But those are things of the past.

Today, business is moving from industry silos to networks, says AT Kearney Indias managing director Dr C Srinivasan. Physical assets are no longer that important, having been replaced by intellectual assets.

Organisational structure is being transformed from horizontally and vertically integrated to globally networked set up. And competitive advantage today no longer means control over physical and financial assets, it is efficient leveraging of intellectual capital which matters.

Dr Srinivasan cites the examples of Dell Corporation in the computer hardware industry and Ford in the automotive sector. Both have very little physical assets or control over them they outsource most of their needs. But what they do is utilise their intellectual assets to build confidence and intimacy with a customer to such an extent that a customer buys a product with their brand name and in turn the companies stand guarantee for their quality and after sales service.

AT Kearney recently did a survey among CEOs of companies across the globe to identify key drivers for value growing firms. As many as 85% of the respondents identified customer orientation as the key growth driver.

Organisation efficiency was picked up by 72% of the respondents, 58% said growth vision and 48% believed that leadership structure were other growth drivers for a company. Strategic reach was also identified by a large section of respondents as another critical factor in achieving value growth.

Dr Srinivasan told a gathering of CEOs at a three-day retreat organised by Assocham in Agra that networked excellence will differentiate winners from losers. With network at the core, companies need to build innovation, customer intimacy and networked operational excellence around it.

What should a company do to achieve networked excellence Dr Srinivasan say three things are critical: connect seamlessly across discreet platforms to customer and channel partners, streamline internal processes and configure value chain dynamically.

Customer intimacy is the other important factor. Dr Srinivasan prescribes mapping of life time value of customers by companies. Customer segments which are profitable should be focussed on and expanded further. Companies should also enhance customer experience. He says that customer intimacy required integrated system enabling faster cycle times to effectively realise customer value. Customer intimacy is about customer acquisition and retention, among other things.

Innovation is the third key factor for survival and growth of companies in the future. Companies should develop expertise to be able to predict and adapt to future trends. Be nimble and flexible since business environment is changing all the times. The managements should also focus on leveraging of internal intellectual capital.

With customer at the centre of every companys attraction today, a unified combination of systems and technologies can help achieve superior customer service. Companies should capture data and have good reporting systems.

This should then be transformed into integrated customer data warehouse. Analytical customer relationship management application would then analyse the data captured in the integrated customer data warehouse. The last stage involved integration of this analysis into call management systems.