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Convergenomics Gower [2010]

Convergenomics Gower [2010]. Sang M. Lee David L. Olson Synergistic combination of ideas or objects for new contexts Enabled by digital convergence, ubiquitous computing. TRENDS. Networked global economy Open Wal-Mart; IBM; Nike Digitization Moore’s Law

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Convergenomics Gower [2010]

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  1. ConvergenomicsGower [2010] Sang M. Lee David L. Olson Synergistic combination of ideas or objects for new contexts Enabled by digital convergence, ubiquitous computing

  2. TRENDS • Networked global economy • Open • Wal-Mart; IBM; Nike • Digitization • Moore’s Law • computing power doubles every 18 months • Metcalfe’s Law • Value of a network increases with square of number of users • Coase’s Law • As transaction costs decrease, firm complexity diminishes • Firms tend to expand until marginal cost of internal transactions = external marginal cost

  3. Friedman (The World is Flat) • THREE CONVERGENCES • New players (through global access) • BRIC • New playing field (Web economy) • Global warming • Green emphasis • Cultural conflicts • Ability to develop new ways

  4. Megatrends • Energy supply • Peak Oil • Global warming • Complexity • Unintended consequences • Globalization • Japan; Asian Tigers; BRIC • Digitization • Enterprise systems • Paradox: More Integrated Systems ˃˃ Fewer Systems People • DEREGULATION/PRIVATIZATION • Home mortgage crisis • COMMODITIZATION OF PROCESSES • Software as a service

  5. Convergence Revolution

  6. Evolution & Organizational Innovation

  7. New Products/Processes • Component/Product convergence • iPad, Smartphone • Functional convergence • BPR • Matrix organization • Temporary supply chain linkages

  8. E-Globalization • Develop Corporate Global Mindset • Build Global Competitive Advantage • AGGREGATION • Seek economies of scale & scope • McDonalds, IBM, Microsoft • ADAPTATION • Maximize local relevance • Mini-IBMs by country, Google China • ARBITRAGE • Exploit differences in national, regional markets • US Headquarters-Chinese factories-Indian call centers-US retail • Organizational convergence

  9. Technology Convergence • BIOTECHNOLOGY • Drugs – convergence of pharmaceuticals, agriculture, chemical • Neural technology – convergence of biology, computer technology • MRI/PET scanning – convergence of engineering, biology • NEURAL SCIENCE • NANOTECHNOLOGY • Evidence: • Cell phones – convergence of internet access, music, photography, telecommunications • Microelectromechanical systems (MEMS)

  10. Industry Convergence • Two or more previously distinct industries become direct competitors or cooperators • Apple vs. music distributes • Walt Disney – travel convention • FUNCTIONAL • Products of 2 industries linked • PCs & TV • COMPLEMENTARY • Multiple objects of value from 1 location • Travel & lodging (air tickets & hotel rooms, rental cars) • Commercial & Investment banking (post-Glass-Steagall)

  11. Industry Convergence Examples • News • Newspapers – disappearing • Network TV swamped by Cable Networks • CNN, ESPN, directTV • Telecom • AT&T breakup • EDUTAINMENT • Education & entertainment • INFOTAINMENT • Information & entertainment

  12. Biological & Artificial System Convergence • Application of microtechnology to business • MINIATURIZAATION = computer chips, health care, gene splicing • VISUALIZATION – X-ray, material chemistry • MANIPULATION – virtual reality & tactical feedback • EVALUATION – partition test medium (genome project) • Biotechnology • Genetic modification – US/European debate • Nanotechnology • The science of the very small • SINGULARITY • Ray Kurzweil (2005) • Computers surpass human knowledge

  13. Information Technology Support • Technology enables globalization • The Web • Cell phones • Enterprise information systems • Supply chain support systems • Competitive advantage from: • Creating & selling new knowledge & ideas

  14. Supply Chain Coordination Systems

  15. Innovation Through Open Systems • Web 2.0 • Openness, participation, collaboration • Service oriented architecture • Strategy to turn applications & information sources from different organizations into SERVICES accessible via Web • IBM: On Demand Business • Hewlett-Packard: Adaptive Enterprise • Dell: Blade computing

  16. SOA & New Products • iPod • Banking – Salesforce • Automate forecasting processes in CRM • Provide open but secure system • Bank of the West • Enabled access to software to better identify seasonal traffic • Wal-Mart • RFID linkage

  17. Open Source Development Red Hat [2009]: Can save by: • Enabling use of commodity hardware rather than proprietary machines • Avoids maintenance contracts • Greater functionality, reliability, performance • Faster learning curve, available support tools • Avoid vendor lock-in • Reduce need for security consultants & tools CONFENIS 2010 Natal

  18. Open Source ERP/EIS • Jaisingh et al. [2008]: OSS ERPs can be customized to modify code, gain competitive advantage • Serrano & Sarriegi [2006]: OSS ERP benefits: • Increased adaptability • Decreased reliance on single supplier • Reduced costs CONFENIS 2010 Natal

  19. Open Source ERP Products • Compiere • OpenMFG • Open for Business Project • Tiny ERP • Web ERP • Open Office • OpenBravo • OpenPro Sourceforge.net listed over 1,000 ERP projects May 2009 OPTION FOR SMEs CONFENIS 2010 Natal

  20. Strategic Innovation • Applying new convergence developments to business opportunities • TYPES OF INNOVATION • Improve products or services • Speed, customization, aesthetics • Improve value chain processes • Lower cost, improved quality • Continuous improvement • Participation by customers, producers • Strategic • New ways of doing old tasks • SOUTHWEST AIRLINES • IKEA

  21. Convergence Evolution • Component/Product Convergence • Clock radios, cell phones, Amazon’s Kindle • Functional Convergence • BPR – Dell’s value chain, McDonalds’ food delivery • Organizational Convergence • Supply chains – Wal-Mart, Nike, Dell • Technology Convergence • Nanotechnology, biotechnology • Industry Convergence • Combining industries – Apple iTunes, Health Tourism • Open-source Convergence • Web 2.0, open source ERP • Biological & Artificial Systems Convergence • Miniaturization – gene splicing, molecular biology, MRI

  22. CONCLUSION • The world is flatter • Widening economic & digital divides • Convergenomics brings new business models & opportunities • Strategic innovation required to survive

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