A checklist for assessing virtual business networks

Ten questions to ‘healthcheck’ a collaborative business network

All business networks are not equal

In Virtual Enterprise Networks allow business scale through virtual collaboration, I discussed the Virtual Enterprise Network (VEN) as an important new collaborative enterprise which small businesses are using to achieve ‘virtual scale’ without sacrificing control and agility.

A key differentiator of VENs from other types of business network is that the member companies have made real and serious investments in creating a collaborative network enterprise and all this implies.

Despite what a network might call itself many business networks are little more than loose associations of companies who barely know each other and have not invested in learning to collaborate together.

These kind of opportunistic business networks believe that when they win the first customer contract that will be time enough to learn to collaborate.

In the real world however this is not something that discerning and demanding customer organisations are likely to give them the chance to prove!

It is important therefore that if you are a prospective customer of a VEN or you are a small business thinking of joining a VEN to have a way to check-out how serious a collaborative enterprise such a network is.

Ten questions for assessing a collaborative business network/cluster

1. Network Mobilisation

Has the network completed a formal network mobilisation process to align member goals, inputs and expectations?

2. Management Resources

Does the network have dedicated network management resources in the key areas of overall network leadership and administration/technology support?

3. Ground Rules

Has the network agreed Ground Rules which all members must observe to ensure the interests of all members are fairly and transparently governed?

4. Broker & Sales Plan

Is there a dedicated Broker responsible for identifying sales opportunities for the network in line with an agreed business development plan?

5. Capability Map

Have the companies aggregated and analysed their capabilities to identify core/quick win areas and gaps where new members may needed?

6. Tenderfeeds

Does the network have access to regular tender information backed up by a systematic process for qualifying and processing opportunities?

7. Affiliate Management

Does the network have a process for managing new and affiliate companies to ensure they are properly considered for bids and have good regular information which keeps them informed about network activities and opportunities?

8. Innovation & Alliances Plan

Does the network have a committed strategy and plan for collaborative product development (generally involving an applied research group/project funding), external product sourcing and the formation of useful alliances with other networks?

9. Common Processes

Does the network have common and regularly updated processes covering the execution, management and reporting/liaison of internal and customer-facing projects?

10. Collaborative Legal Agreements

Has the network developed detailed legal agreements to underpin collaborative working in key areas such as Intellectual Property, non-performance and risk/rewards?

Analysing a network’s responses

If a network can answer ‘Yes’ supported by evidence for five or more of these questions then there is a good chance that they are serious about operating as a collaborative network.

If the network can say ‘Yes’ to seven or more then you probably have found a very strong network you can work with.

If the network can only say ‘Yes’ to a couple of the questions then you have a network which probably should be avoided for one of two very different reasons:

  1. a network in its early stages which needs more time to develop or

  2. a ‘network of convenience’ which is unlikely to be a good strategic partner

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