Platt Perspective on Business and Technology

Telecommuting and the marketplace transition to the telecompany 4 – defining the business model in a telecompany and virtual business context 3

This is my fourth posting to a series in which I outline and discuss a new and emerging business approach that is coming to have tremendous impact, and both on marketplaces and economies and on how we do business, and on individual employees as they plan for and carry out careers (see Outsourcing and Globalization, postings 48-50 for Parts 1-3.)

I have conceptually and functionally divided telecompanies as fitting at least two fundamentally distinct business models in Part 2:

• The costs constraint telecompany model, with its focus on limiting fixed operating expenses, and
• The shifting opportunities-oriented telecompany model.

And I began a more detailed discussion of the costs constraint model in Part 3. My goal in this installment is to outline in corresponding detail the shifting opportunities-oriented telecompany model. Looking ahead, I will follow this with an installment in which I will discuss incorporation of elements of these two approaches into more standard business models, and hybrid business models. But for now, as with Part 3, I will restrict discussion to pure play businesses that pursue a strictly telecompany business model approach, and of one or the other of these two basic types.

The shifting opportunities-oriented telecompany model: If the costs constraint telecompany model is largely a child of economic downturn, risk and uncertainty, the shifting opportunities-oriented telecompany model is a child of expanding and increasingly fast-paced globalized opportunity. And in a fundamental sense, I began laying the groundwork for this posting when I first began posting to this blog, and with my earliest installments to my directory Ubiquitous Computing and Communications – everywhere all the time.

• One of the emerging realities coming from our increasingly interconnected capabilities to communicate and interact real-time and ubiquitously is that we are witnessing our once local marketplaces coalesce into a single global marketplace.
• One consequence of this is that what might have been a marginal niche market product pre-interactive internet can now reach a wide enough interested audience to be economically feasible and profitable to develop, produce and offer.
• And such offerings might hold stable, long term value and both to consumers and to the businesses that provide them. But such offerings might be seasonal or otherwise short term and fad-based, and offer transient if significant business opportunity while they last – for those businesses that can get in and develop to these transient needs and get out again and quickly and on both ends of that process.

The shifting opportunities-oriented telecompany model applies specifically to businesses that would capture transient sources of value as a route to profitability and business strength. This means bringing in a steady flow of hands-on expertise that is only going to be required short term, and in the extreme case a tipping point might be reached where it does not make sense to have a permanent base of in-house employees at all. A true, pure play shifting opportunities-oriented telecompany would have owners and executive managers (who might very well be the same) and they would bring in a dynamically changing flow of temporary and short-term hire consultants, contract workers and free agent employees.

I wrote of a comparable system at the supply chain level when discussing companies such as Li & Fung, Ltd (and see:

• Fung, VK, Fung, WK and Wind, Y. (2007) Competing In A Flat World: building enterprises for a borderless world. Wharton School Publishing

for further details concerning this company.) One of their defining strengths, as I have discussed in postings such as Moving Past Early Stage and the Challenge of Scalability 9: supply chain-ready business models is in their ability and expertise in working with partner businesses to create effective, optimized supply chains on the fly in order to capture immediately available short term opportunity in rapidly changing markets such as seasonal and fad-driven fashions and clothing. The shifting opportunities-oriented telecompany model brings this mutable dynamism into the individual business as it develops and provides for short-term, transient and fad opportunities, where it would not make sense to pursue a multiple-company supply chain approach.

And at this point I both admit do not having anything like a working crystal ball, and acknowledge that what follows might prove naively simplistic and overly limited.

• I see the shifting opportunities-oriented telecompany model working most effectively if not exclusively for small, lean, agile businesses with at most small headcounts of temporary employees, brought in for short-term specialty needs – at least for companies that only pursue this approach.
• And I suspect that a part of this lean agility is going to involve maintaining a minimum long-term physical plant, with the fixed operating expenses that carries. In Part 2 I first defined the virtual company as one based dually on both the telecompany, and the telecommuting and distant worker model.
• And I see this as being most likely in the information and knowledge development arenas, where skills transiently needed by any one organization would be reliably and steadily needed by the business community as a whole. So freelance workers would be able to find and secure steady employment in those specialties and they would be available, even if that meant moving from one short term employer to another in pursuit of best offers.

And these assumptions will all blow up as the first large company tries the shifting opportunities-oriented telecompany model, and lacking that crystal ball, I have to admit that might happen too – even if I do see it as a difficult fit.

As noted at the start of this posting, I am going to turn in my next series installment to consider hybrid business models that include elements of one or both of the telecompany business models. I add in anticipation of that, that I see combined and hybrid approaches as the primary route to telecompany development in the immediate future, with pure play telecompanies coming later and certainly for those that would pursue the shifting opportunities-oriented telecompany model approach. Meanwhile, you can find this and related postings at:

Guide to Effective Job Search and Career Development – 2 (as a supplemental posting),
Outsourcing and Globalization and
Macroeconomics and Business.

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