Most definitions of virtual enterprise (VE) incorporate the idea of extended and collaborative outsourcing to suppliers and subcontractors in order to achieve a competitive response to market demands (Webster, Sugden, & Tayles, 2004). As suggested by several authors (Browne & Zhang, 1999; Byrne, 1993; Camarinha-Matos & Afsarmanesh, 1999; Cunha, Putnik, & Ávila, 2000; Davidow & Malone, 1992; Preiss, Goldman, & Nagel, 1996), a VE consists of a network of independent enterprises (resources providers) with reconfiguration capability in useful time, permanently aligned with the market requirements, created to take profit from a specific market opportunity, and where each participant contributes with its best practices and core competencies to the success and competitiveness of the structure as a whole. Even during the operation phase of the VE, the configuration can change, to assure business alignment with the market demands, traduced by the identification of reconfiguration opportunities and continuous readjustment or reconfiguration of the VE network, to meet unexpected situations or to keep permanent competitiveness and maximum performance (Cunha & Putnik, 2002, 2005a, 2005b).
Key Terms in this Chapter
Enterprise Dynamic Integration: (see Organizational Dynamics)
Market of Resources: An institutionalized organizational framework and service assuring the A/VE dynamic integration, reconfiguration, and business alignment. The operational aspect of the market of resources consists of an Internet-based intermediation service, mediating offer and demand of resources to dynamically integrate in a VE, assuring low transaction costs and the partners’ knowledge preservation. Brokers act within the market of resources as the intermediation agents for agility and virtuality. Its implementation is as an independent organization/company, independent both from the offer and the demand sides of VE integration, that is, independent from the market participants, in order to assure impartiality, fairness, and trust, being able to monitor the activity of all the participants (including brokers) and to enforce the accomplishment of contracts between parties.
Virtuality (of organization): The specific organisational structure between VE elements/partners and brokers, BM_VEARM (see BM_VEARM), providing the feature of virtuality as a further requirement for the achievement of the highest VE dynamics. Virtuality makes possible the transition from one VE physical structure (instance) to another in a way that the enterprise or process owner is not affected by the system reconfiguration or aware of the reconfiguration; the underlying service structure and reconfiguration process are hidden.
BM_VEARM: BM_Virtual Enterprise Architecture Reference Model. BM_VEARM is a VE reference model conceived for enabling the highest organizational/structural/reconfiguration and operational inter-enterprise dynamics of VE, or A/VE (see Agile/Virtual Enterprise), employing three main mechanisms for VE dynamic creation, reconfiguration, and operation: (1) market of resources, (2) broker, and (3) virtuality. Additionally, BM_VEARM implies the highest level of integration and (geographic) distribution of VE elements (partners in the VE network).
Enterprise Dynamic Reconfiguration: (see Organizational Dynamics)
Enterprise Integration: (1)°consists on the establishment of effective and efficient interactions, as well as interaction improvement, among the enterprise’s elements, or organizational units and functions and provides an easy enterprise reconfiguration (“without significant conversion (reconfiguration) costs”) —intra-enterprise integration. (2)°In the case of a virtual enterprise, establishment of effective and efficient interactions among the partners of the VE network and one of the enablers of the VE dynamic reconfiguration—inter-enterprise integration.
Broker: Organization configuration, structure, organization, or architecture manager, is the main agent of agility and virtuality in a VE, acting either between two operations of the VE (off-line reconfigurability, providing agility only) or online with the operation of the VE (online reconfigurability, providing virtuality and a higher level of agility).
Resource: The entity (individual or organization) that can contribute or add value to a product, providing either a product (component, assembly) or an operation. A resource is (a view of) an enterprise object, which is used to perform (or to support the execution of) one or more processes, and it is the subject of control. A resource can be primitive or complex. In the case of a VE, it is a person or enterprise (company) partner in a VE.
Virtual Enterprise (VE): A dynamically reconfigurable global networked organization, networked enterprise, or network of enterprises, sharing information and/or knowledge, skills, core competencies, market, and other resources and processes, configured (or constituted) as a temporary alliance (or network) to meet a (fast changing) market window of opportunity, presenting as main characteristics agility, virtuality, distributivity, and integrability (see Putnik, 2000).
Organizational Dynamics: Changing in the organization’s structure where structure consists of organization’s (company’s) elements and relations among them along the time, when time as a parameter is indispensable for the organization’s structure, or some aspect of organization’s structure, description, and analysis. In the case of a VE, organizational dynamics refer to the changes in the network structure or configuration along the time. See also Enterprise Dynamic Integration, Enterprise Dynamic Reconfiguration.