Virtual Enterprises
Ted Goranson

A virtual enterprise is simply a collection of loosely assembled small and medium-sized companies, integrated — perhaps temporarily. They are able to act as if they were a large enterprise, for example Ford and all of its supply chain.

The virtual enterprise was first identified in DARPA research in the 1990’s, research that we participated in. The crisis in that case was large expensive government contractors who were failing to deliver. Research on virtual enterprises has continued under sponsorship from the European Union. In their model, these are enabled by prefabricated agreements and services; processes are stable and advertised; a trust manager is designated beforehand; practices and technology is harmonized.

In our work we are interested in a more radical case: partners may not have known each other; they may be highly distributed; they may use radically different practices, have conflicting policies and heterogeneous technologies. The enterprise may be building something (and/or providing a service) that has never been seen, possibly using new processes and performing tasks that members may not have thought they could, or even imagined. Our vision has these enterprises as highly dynamic; cheap to form and dissolve and constantly optimizing and evolving once operational.

There are many reasons to want virtual enterprises. They are cheaper and faster; they are more innovative; they can build small, custom lots more feasibly. They are more agile; they can experiment with new products and approaches more readily; they reward value added in a more direct way than before, making creative employees happier. Many partners can be in developing economies; diverse cultures and even different mathematics can be a competitive advantage rather than something to tolerate. They improve democracy because they leverage market forces in a positive way, and removes the corrupting power of megacorporations. They are possibly the only feasible model for emerging economies; it integrates well with microfinancing.

We know that the main empowering factor for agile virtual enterprises is a new self-organizing process integration information infrastructure. This is what initiated the work now called “topoeisis" [More], and is our primary application domain. A book recounting the initial DARPA work is available [Here ]. The preface and first two chapters of that book can be downloaded for your review [Here ].

An online white paper is available [Here].

Demonstration projects were planned to include Rwanda and Ethiopia, but are on hold while we focus on implementations.