I read an article in The Wall Street Journal recently that gave me pause.
It was a piece on how the fragmented nature that’s defined the technology industry for the last several years may have run its course, and how a new trend to vertically integrate operations is afoot in corporate America.
Case in point: the surfeit of massive deals in the offing, including LiveNation’s targeted acquisition of Ticketmaster, PepsiCo’s pending US$7.8-billion acquisition of two of its key bottlers and Oracle Corp.’s massive planned purchase of Sun Microsystems.
Comprehensive control, it appears, is the new name of the game.
With this model, organizations are encouraged to draw back in house those splintered factions of its existence that they’ve increasingly released to outsiders.
More than that, it embraces the philosophy that one needn’t stick to his knitting, after all, if one hopes to be successful. Indeed, if you knit, why not consider crocheting, too? And while you’re at it, give needlework a whirl.
“Vertical integration,” as described in the article, is a longstanding strategy which sees companies assuming direction of all aspects of their corporate existence, from materials, to manufacturing, to distribution.
At least superficially, it makes sense to me.
Certainly a move to amass under one roof as many components of the production and delivery of the service or product a company sells to its customers is a potential move toward better profits and higher productivity. Quality, production, distribution can all be enhanced with more direct oversight.
But it is, alas, also a potential move toward chaos.
If the manager filling his arms with new and revisited strategic imperatives is not mindful of also loading up on ways to effectively manage them, this corporate shift may backfire badly.
And so, as much as this move is about shedding outside participation in a company’s operational activities, it behooves executives considering this to enlist professional help as needed.
At 360, we can lend a raft of expertise to the enterprise.
We can help you to define the overall technological architecture you’ll need to gain ground over your competition. We can conduct a health check and needs analysis of your current outfit. We can set you up with the enterprise software and communications systems to support your expanded operation.
And we can help you to align your newest additions with your existing infrastructure such that your tried and true don’t get diluted in the process.