Intelligent enterprise

This article is about the management approach. For the magazine, see Intelligent Enterprise (magazine).

Intelligent enterprise is an organizational management concept that leverages knowledge and technology in improving business performance. The concept, as articulated in James Brian Quinn's book Intelligent Enterprise, posits that intellect is the core resource in producing and delivering services. Managers are expected to provide a rewarding work environment through lower friction and an energetic conduct,[1] and auxiliary functions should be outsourced to vendors, so that firms may focus on their core components.[2]

Discussion

Ming Yingzhao and Feng Dexiong stated that "the degree to which the Intelligent Enterprise can be successful depends on the competencies of the people and its operational capabilities",[3] such as structure, policies and systems. Asif Gill discussed the contemporary information-driven approach that uses data, analytics, and artificial intelligence/machine learning for "architecting intelligent enterprises".[4]

Examples

Honda

During its early years, Honda competed with companies such as Toyota and other Japanese car producers. Outsourcing many of its components to achieve economies of scale and focusing more on the development and production of its manufacturing operations helped it gain a competitive advantage.[5]

Apple

Apple, when introduced to the highly competitive computer environment, retailed for about $2000. Production costs were less than $500, as over 70% of its components were outsourced.[6] Instead, Apple focused on the design, logistics, software and product assembly.[7]

Stated advantages

Jatinder Gupta claims that more available information will lead to better decision-making and thus, be beneficial in a macroeconomic sense.[7] Gupta classifies the advantages of Intelligent Enterprises into 3 different levels: Operations, Tactical and Strategies.[7]

  • Operations: In an operational context, intelligent enterprises establish a platform that automates processes and provides seamless access to all data, previously dispersed both physically and logically. This integration ensures that critical information is readily available, enabling more efficient and data-driven decision-making.
  • Tactical: An intelligent enterprise can make more informed decisions by ensuring that information is readily accessible and easily actionable. By leveraging integrated platforms and advanced technologies, such enterprises break down data silos and provide real-time access to insights. This both enhances decision-making speed and improves accuracy.
  • Strategies: The reduction of operating times directly contributes to lower operational costs, enhancing customer service quality. By streamlining processes and increasing efficiency, businesses can allocate more resources toward improving the customer experience. This efficiency enables organizations to make more informed decisions. With faster access to data and real-time insights, businesses are able to adapt to market dynamics, refine their strategies, and implement actions that drive sustained growth and competitive advantage. Advanced decision-making capabilities allow organizations to not only respond to current challenges but also shape their future trajectory.

Limitations

Gill Palmer, a doctoral candidate, has identified a blind spot[8] among many corporations and businesses: the need for a harmonious integration between internal operations and external interactions.

The internal aspects of a business encompass several key components, including strategic planning, which involves the formulation of long-term goals and the development of actionable plans to achieve them. Resource efficiency refers to the optimal utilization of assets – such as human capital, technology, and finances – to minimize waste and maximize productivity. Additionally, businesses must continuously identify and assess opportunities that arise in the marketplace, allowing them to innovate and adapt to changing conditions.

Effective processes are crucial, as they dictate how tasks are carried out and how information flows within the organization. Lastly, the way a business interacts with its external environment, including stakeholders such as customers, suppliers, and regulatory bodies, can significantly impact its success. Therefore, both the internal dynamics and external relationships must work in concert to foster a truly intelligent enterprise.[4]

It is quite important to note that humans are the intelligence behind the technological systems, and to affirm the validity is still very limited. Human beings have many qualities that are different to that of a technology apparatus (psychological and sociological), which needs to be taken into account. Therefore, limiting this theory to that of a technological approach should not be the sole focus of a corporation.[4]

References

  1. ^ Quinn, James Brian (1992). Intelligent Enterprise: A knowledge and service based paradigm. United States of America: The Free Press.
  2. ^ Wiig, Karl M. (2007). The Intelligent Enterprise and Knowledge Management. Texas: Knowledge Research Institute, Inc. S2CID 15643503.
  3. ^ Yingzhao, Ming; Dexiong, Feng. Research on the Intelligent Enterprise Based on Intelligent Behaviour. Proceedings of the 7th International Conference on Innovation & Management. Wuhan, P.R.China: School of Management, Wuhan University of Technology.
  4. ^ a b c Gill, Asif (August 2022). Adaptive Enterprise Architecture As Information: Architecting Intelligent Enterprises. Intelligent Information Systems. Vol. 08. Singapore: World Scientific Publishing. doi:10.1142/12961. ISBN 978-981-12-6020-9.{{cite book}}: CS1 maint: date and year (link)
  5. ^ Quinn, James Brian (1999). "Strategic Outsourcing: Leveraging Knowledge Capabilities". MIT Sloan Management Review. Retrieved 21 October 2014.
  6. ^ Choo, Chun Wei (1995). Information Management for the Intelligent Organization. Medford, New Jersey: Information Today/Learned Information.
  7. ^ a b c Gupta, Jatinder N. D.; Sharma, Sushil Kumar (2004). Intelligent Enterprises of the 21st Century. London: Idea Group Publishing.
  8. ^ Palmer, Gill (1 July 1987). "Human Resource Management and Organisational Analysis". Asia Pacific Journal of Human Resources. 25 (2): 5–17. doi:10.1177/103841118702500202. ISSN 1038-4111.