Look at the enterprise value chain
REACHING out to other governance enterprises is essential and critical to any enterprise’s success in its governance and transformation program. Whether an enterprise views itself as separate from all others or interdependent with them, the facts of life are such that it can never be an “island” unto itself; it is connected, by force of economic and other real-life processes, with other enterprises, which together with it form one value chain.
In much the same way that there is an internal value chain within the enterprise — indeed, this is its core process from A to Z — there is also an external value chain. This is made up of several external agencies, upon which the enterprise depends for many of its core requirements.
There are those enterprises that provide it with the different requirements, needed for the grist of the “enterprise mill,” which runs its internal core process. There are external enterprises which provide manpower and other technical and professional services. There are also those that provide materials and other supplies that the enterprise needs to run its core processes. Not least are those that provide the funding and the working capital, which the financial mechanisms of the enterprise absolutely need to keep humming, and to be able to invest in equipment and other structures that future demands may impose. This is a set of very important “constituencies” that the enterprise would need to strike proper working relationships with.
On the other side, there are other enterprises that provide custom and demand for either the goods or services of the enterprise. All these “customers” need to be properly attended to; they need to be satisfied; their loyalty has to be won and kept on a sustained basis; and the enterprise must be seen as a caring, efficient, and effective provider for their needs. All this would demand significant attention and diligence care from it.
These first two sides of the immediate value chain — the supply side and the demand side — form the immediate external constituencies that the enterprise has to forge close understanding and working relationships with. They are well within the immediate operating concern of the enterprise. They are not the only outside enterprises that the enterprise needs to take into account, however; there are other issues and concerns, under the control and direct responsibility of other enterprises, which can have direct bearing on the enterprise’s operations. While a step removed from the immediate ambit of the enterprise’s core process, they nonetheless form part of the influ- ences that can impinge on the enterprise’s value chain. A typical external factor that the enterprise needs to take into account would be access to several infrastructure facilities, communications, and other social, cultural amenities that are no less critical for enterprise operations. Transport networks must function efficiently; so must communication facilities be working 24/7. Health, education, and other cultural amenities, let alone the over-all physical environment around the enterprise, can have great bearing on its operational efficiency and effectiveness.
It is clear that an enterprise would need to train a very careful eye on its immediate and broader external value chain. Relations with other enterprises in that chain have to be smooth, and to a very large extent seamless and functionally systemic. It is incumbent upon any enterprise with a governance and transformation programto sustain, to forge alliances with these external parties in order to secure that the external value chain works for the common good of all.