A kick-start plan for setting up a Virtual Enterprise Network in 6 weeks

In a previous article, Virtual Enterprise Networks allow business scale through virtual collaboration I introduced the idea of a Virtual Enterprise Network or VEN as a way for smaller businesses to achieve “virtual scale” by collaborating on business development, marketing and project delivery for major enterprise customers.

A kick-start plan for setting up a Virtual Enterprise Network in 6 weeks

I described why these VENs are forming and their basic value proposition - gaining scale without sacrificing agility!

I referenced a number of real VEN examples and identified the 4 critical success factors (CSFs) for a VEN:

  • CSF1. Not over-complicating the technology support

  • CSF2. Taking "Network Governance" Seriously

  • CSF3. Development of Common Collaborative Working Practices

  • CSF4. "ABC" Roles

In this article I suggest a kick-start plan for creating your own VEN from scratch in just 6 weeks!

Week 1 - Find 3-4 founder network companies

These should be people you already know and trust.

They should be in companies in the same industry as your own company but with complimentary capabilities.

Some product overlap if fine but avoid direct competitors (at least in the early days of the network).

Week 2 - Set 'quick win' targets for sales, new members and network governance

For sales a good target would be to have your network added to a major organisation's “Invite to tender” list.

For new members you should be aiming for at least 6 more companies in the network.

For network governance you need to have your basic ground rules in place for how you intend to operate as a network.

Week 3 - Acquire the resources to run the network until you get your first contract

The Broker and Coach role are absolutely critical at this stage.

They can be resourced by combinations of three sources:

  1. Member company contribution - in cash or in kind

  2. Local enterprise development agency support - most LEDs are very keen on network and cluster development as it helps exports and regional competitiveness

  3. Consultancy support - for example brokerage can be secured on a 'win-fee basis' with a low (or no) retainer and a bonus when the first results are achieved.

Week 4 - Implement your network collaboration tool

You need a tool to allow all the companies in the network to communicate and to co-operate on documents.

You should go for a web-based hosted service which does not require the added complication of any software installation on member computers for it to be used.

It should allow the companies to aggregate their capabilities - in other words it must provide some kind of “competency database”.

It should help with marketing and business development, for example, allowing target prospect information to be captured, relevant tenders to be circulated and the ability to provide a "corporate-feel" public website.

It should be possible to negotiate a “try and buy” of suitable network collaboration software - a three month trial should let you prove the software's usefulness worth to the network.

Week 5 - Start operating the three key network streams

The New Members Stream should be led by the Architect.

It must focus on signing up new members with complimentary capabilities including local universities and local enterprise agency staff.

The Sales Stream should be led by the Broker.

It should focus on strategic customer identification, network product/service definition, network public identity and ‘quick win’ possibilities.

The Network Governance Stream should be led by the Coach.

It must handle the implementation and training of the web-based network tool and the development of ground rules and network working practices.

Week 6 - Develop a self-sustaining network business plan

Even though you are only started you need to get everybody thinking about on-going sustainability!

Start to outline a business plan for the next 12 months which identifies both new revenue possibilities and the investments all parties will have to make to achieve them.

The experience of these networks is that if they are run properly they will generate 15-30% of additional revenue per member after the initial settling in period.

The final trick

The final trick is to ensure that all the VEN participants know the costs necessary to operate it on an on-going basis and are committed to making these investments provided the network proves its worth to all parties by delivering the quick wins!

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