There are multiple ways to describe the corporate ecosystem. And often, the term extended enterprise is used to describe it. There are multiple misconceptions about what an extended enterprise is, and this short article aims at clearing those misconceptions. The modern business scenario resembles a spider’s web. Strands of silk crisscrossing from one end to another, never touching each other directly, but still a part of the same web. Just like that, businesses are often supported and connected to other businesses, sometimes directly, other times indirectly—with the proper functioning of one business ensuring the success of another. This is called the extended enterprise model. Here, an organization is more than just a single entity—external bodies act as major contributors to the organization’s success. Thus, they are considered as extensions of the organization, i.e. extended enterprise.
In some cases, an extended enterprise is the same as a supply chain. In other cases, it includes the customers as well. In this article, we take a look at the parties making up an extended enterprise ecosystem in an organization and what their functions.
Vendors (Supply Side)
In the extended enterprise model, a vendor is probably the most important partner an organization has. They essentially are the organization’s supply chain. Manufacturing, automobile, and other businesses involved in the production of tangible products are a few industries where such relations are the most evident. The reason for this is simple. Raw/semi-finished products are bought from vendors to complete the manufacturing of a finished product, and the quality of the finished product depends on the quality of the supplied raw/semi-finished product.
Being an extended enterprise partner, the vendor is also a part of the various training programs held by the buyer or the manufacturer. These training programs revolve around good practices, compliance, or training on manufacturing the semi-finished product—in-line with the standards prescribed by an organization. It almost resembles the training provided to an auxiliary branch of an organization. However, in reality, the vendor is still a third-party body and merely a supply chain facilitator to the organization.
The service and technology sector also rely on vendors to support key aspects of their business. Not everything is done in-house.
Distributors (Customer Side)
Many organizations do not sell their products directly. They rely on a set of distribution channels consisting of wholesalers, retailers, and resellers who assess the demand for a product and distribute it accordingly. These distributors are responsible for marketing products at the micro-level. They are also responsible for matching the customer’s needs with the organization’s products. Without the participation of these distributors, an organization most certainly cannot ensure the penetration of their products across the globe. This is why it is important to categorize them as an extended enterprise body.
Distributors are generally trained to effectively market an organization’s products, while also ensuring the product is not misrepresented or sold wrongly. Distributors are also given the benefits of easy financing, marketing support at a micro-level, and buyback of surplus stocks. Organizations spend considerable time and energy in maintaining their ties with distributors, and this is why they are considered as an extended enterprise member.
Resellers, Technicians, Partners (Service and Product Delivery Support Side)
The most common type of extended partners for industries such as pharma, automobile manufacturing, software, electronics, F&B, and lifestyle products are resellers, partners, and technicians. They trained by an organization to handle the servicing or represent the organization and act as internal agents when dealing with customers. A good example of this is a car dealer. They sell cars of various kinds and offer servicing options for them as well. Technicians often travel to the manufacturer’s plant every time a new car is launched in order to learn the new service protocol.
Pharmaceutical dispensaries are also resellers. They stock up on drugs of various brands, but they also provide guidance on how to use these drugs safely and effectively.
On the other hand, if the laundry machine at a customer’s home breaks down, an independent technician trained by the manufacturer or the reseller’s technician visits the customer to diagnose their problems. All these examples are of extended enterprise members who play an important role in the success of an organization when dealing with customers.
If your organization is supported by any of the third-party members mentioned above to carry out business functions that contribute to your organization’s success and profitability, the chances are—they are a part of your extended enterprise. Training them on compliance, engaging with them, and aligning their goals with those of your organization is very important.
Most organizations seldom realize it, but their customers are actually an extension of their organization, especially the loyal ones. It is the repeat business, word-of-mouth publicity, and vigorous brand engagement that makes the customers members of an extended enterprise.
Organizations spend sizeable amounts nurturing their customers. These include loyalty programs, discounts for existing customers, upgrade options, and more. Engaging with customers is as important as engaging with any other external member. They are your brand ambassadors and are often your organization’s biggest allies.
Some organizations expect customers to use their products with minimum intervention and training. In cases such as technology products, automobiles, appliances etc., providing training to customers is a big task by itself. This may be true for the B2C (Business to Consumer), more so for B2B (Business to Business) organizations, and especially for IT and technology products. Training your customers on how to use your products is a non-negotiable must-have and is often included in the contract itself. Training customers may sometimes be a for-profit initiative as well. Certifying customers and administrative users on how to use the product is a huge part of how organizations look at extended enterprise and how they need to train them using technology. Training delivery may be part of the rollout plan, especially for enterprise software companies. So, although customers are not part of the supply chain, they are just as important and perhaps more important in the corporate ecosystem and are hence included as an extended enterprise.
At Abara LMS, we have designed a learning platform capable of helping you effectively train all your extended enterprise partners located around the globe. This capability has won us a spot in the top 20 extended enterprise learning management systems by eLearningIndustry.com, one of the leading authorities on eLearning and learning technologies worldwide.
To learn how you could use Abara LMS to train your vendors, partners, distributors and customers, please reach out to us at firstname.lastname@example.org or click here and one of our sales representatives will get back to you shortly with a training solution for your extended enterprise needs.