Virtual enterprise

From Wikipedia, the free encyclopedia

A Virtual enterprise (VE) is a temporary alliance of enterprises that come together to share skills or core competencies and resources in order to better respond to business opportunities, and whose cooperation is supported by computer networks. It is a manifestation of Collaborative Networks and a particular case of Virtual Organization.

A large community of the Virtual Enterprises area gather annually around the PRO-VE conference.

Over the last couple of decades, we have seen a major shift from an industrial economy to that of an information economy. This has led to an enormous increase in competitiveness among companies, and new technology is needed to help capitalize on the economy. Virtual Enterprises (VE) are a new and major trend in the cooperative business, or B2B, scenario. Virtual Enterprises allow business to specialize and be flexible within their environments. In the past, it has been applied to outsourcing and supply chains, as well as temporary consortiums. Due to the fact that the formation of Virtual Enterprises is an intricate process, a new form of technological support has been developed. The most ambitious of the support systems actually intends to automate part of the creation process, as well as the operation of these enterprises (Cardoso & Oliveira, 2005).

The strategic guideline of virtual enterprise is the Electronic Commerce Model, which is made up of three factors: content, community, and commercialization. The first two factors, content and community, are used to attract web surfers to the web site initially, and to keep them coming back. The third factor, commercialization, is extremely important in determining the success of the virtual enterprise. After the content and community have been established, the virtual enterprise must use commercialization techniques to come up with ways to earn a profit. The implementation of the three elements of the Electronic Commerce Model greatly influences the operational performance of a virtual enterprise (Tanlamai & Wattanasupachoke, 2005).

As with all types of enterprises, virtual enterprises present both benefits and challenges. Organizations can benefit from virtual enterprises through more economical connections with suppliers, greater opportunities to create revenue, more efficient operations, and a reduction in administrative costs. The challenges facing virtual enterprises are inexperienced users, security, expense control, and the level of incorporation required to create a successful virtual enterprise (Sun Microsystems, Inc., 2004).

Virtual Organizations defy the conventional rule for operating an organization. They do so by accomplishing tasks traditionally meant for an organizaation much bigger, resourceful and Financially stable then the ones who are actually able to do so because of being a collaborative effort. A company having the technical capability, one with the right human skill set, the other with the solution, coming together to put it all together. The Information Economy gifts a virtual organization composition for entrepreneurs who want to achiever dreams.

Today, there are numerous virtual enterprises on the Internet. Virtual Music Enterprises ([1]) is one example of a virtual enterprise, and Virtual Enterprise California lists several other examples ([2]).

Another kind of Virtual Enterprise is also an educational class throughout the world. Where students come together in a classroom to form a virtual business. They do not conduct real transactions, nor do they sell real merchandise. The class is simply to learn how to start and run a business. The Business is usually replaced at the end of the year for the next group of students. The students do business with many companies, and even hold trade fairs and grand openings. More about this is here on http://www.virtualenterprise.org/

[edit] References

• Cardoso, H.L & Oliveira, E. (2005). Virtual Enterprise Normative Framework within Electronic Institutions. Retrieved June 7, 2006 from http://paginas.fe.up.pt/~eol/PUBLICATIONS/2005/esaw_post.PDF

• Sun Microsystems, Inc. (2004). Identity Management: Technology Cornerstone of the Virtual Enterprise. Retrieved June 7, 2006 from http://www.sun.com/software/products/identity/wp_virtual_enterprise.pdf

• Tanlamai, A. & Wattanasupachoke, T. (2005). E-commerce Model of Virtual Enterprises in Thailand. The Business Review, Cambridge. Vol.4, Iss. 1; p. 296-302.