“Dynamic Collaboration”: the model of a new business that ...time, achieving a company collaboration that feeds back sales planning, inventory, and distribution man-agement, and

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NEC Journal of Advanced Technology, Vol. 1, No. 1 9

Advanced Technologies Driving “Dynamic Collaboration” — Featuring System Technologies

INTRODUCTION

“Dynamic Collaboration”: the model of a new businessthat quickly responds to changes in the market through“The integrated IT/Network solutions” provided by NECBy Yukio YAMAZAKI*

*Executive General Manager, IT Solutions MarketingOperations Unit

Companies are searching for a new business model in the midst of unclear, chaotic and fast-changing economic circumstances, as exemplified by increasing globalization and rapid

changes in the market environment. The focus of these companies is on “creating new corporate value throughquicker and more dynamic response to accelerating changes in the market.” NEC believes that the model of thenext-generation business will be one in which each company enhances its own competencies and strengths, anduses these core competencies to collaborate with other companies. On June 10, 2003, NEC introduced thisconcept of “Dynamic Collaboration — making your business grow —.” This message is a promise that NEC willsupport its customers’ business innovation and creation of new value. In order to fulfill this promise, we at NECare determined to resolve our customers’ management issues by offering business solutions that converge ouradvanced IT/network technologies, and thereby serve as a business partner that evolves along side our custom-ers.

1. WHAT IS “DYNAMIC COLLABORATION?”

The globalization and speed of business is acceler-ating, with companies entering an era of mega-competition. Accordingly, many companies have en-deavored to reform their supply chain management(SCM) and customer relations management (CRM)business processes in order to be successful in themidst of severe competition and respond to a sud-denly and dramatically changing market environ-ment. However, these companies are faced with theissue of finding a flexible response that will cope withfurther accelerating market change.

Thus, in recent years, many top managers havebeen searching for a business model that effectivelycombines and utilizes their own company’s manage-rial resources with external resources to “create inno-vative products and increase competitive strength.”In other words, evolution toward a type of businessbased on “collaboration” that promotes cooperationand coordination with a global viewpoint has begun.Thanks to the broadband environment brought aboutby the e-Japan strategy of the Japanese Government,these collaborative businesses are developing not justbetween companies, but also in areas beyond coun-tries and organizations.

Even up until now, the form of business has beencreated to meet changes in the business environment.

In the period of high economic growth, the “inte-grated” type of business, which expanded the scale ofactivity based on a company’s own resources, was themain form of business. In the recession, companieschanged the business form to one of “selection andconcentration,” in which non-core businesses were ag-gressively subcontracted and/or transferred to out-side companies in order to refine core competencies,and outsourcing, by which less specific business proc-esses were subcontracted to outside companies, wasput to use. Typical examples included the subcon-tracting of business processes such as “manufactur-ing” and “distribution” to electronics manufacturingservices (EMS) and third party logistics (3PL), andthe spinning off or selling of non-core businesses.

Amid these unclear, chaotic, and rapidly changingeconomic circumstances, companies are increasinglymoving forward with “selection and concentration.”By strategically combining their own companies’strengths with the strengths of other companies, theyhave realized a new business process, and thus, arebeginning to create a new model through collabora-tion. This collaboration in turn brings about the cre-ation of new business value such as the developmentof innovative new products.

One example of this is the trend in strategic busi-ness collaboration among companies in the electrome-chanical industry and the steel industry, as observedfrom about the year 2000.

In recent years, however, the market has becomeincreasingly complex, and the rate of change has ac-celerated. With fixed collaboration, it is difficult to

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NEC J. of Adv. Tech., Winter 200410

find values that meet the demands of a constantlychanging market. In order to act in step with changes,and to create and provide the optimal corporate valuefor a given time, a real-time collaboration is required(Fig. 1).

Therefore, the future business model will have toachieve a flexible collaboration with other companiesthat can accomplish the creation of new corporatevalue to meet the needs of the market by using ad-vanced IT/network integrated technologies. Thismodel will make it possible for companies to evolveinto a “customer-oriented business that can con-stantly provide better and less expensive goods (mer-chandise) to the market more quickly.” “Dynamic Col-laboration” is the next-generation business form pro-posed by NEC (Fig. 2).

2. WHAT BUSINESS EFFECTS CAN “DYNAMICCOLLABORATION” ACHIEVE?

Dynamic Collaboration aims to achieve the follow-ing flexible management environment:

1) Reduced cost2) Improvement in the speed of decision-making and

operations3) Securing business opportunities through the col-

laborative power of companies4) Creating new businesses to keep up with a ubiqui-

tous society

With Dynamic Collaboration, companies can al-ways create a corporate value that is appropriate tothe types of changes in the market and thus achievean ideal business process. In other words, a companycan acquire the strength to plan and develop innova-tive products by using its own core competencies to-gether with those of its partners, and, thereby,achieve a global value chain by which it can quicklyprovide products to customers. Moreover, the com-pany can dynamically organize collaboration with theoptimal partners in order to satisfy the demands ofthe market, making it possible to quickly rebuild theentire value chain.

For example, one manufacturer, through collabo-ration with its retail partner company, built an inte-grated supply chain that incorporated not only pro-duction, distribution, and sales, but also product de-velopment and design. That manufacturer shared thedata on “how many of what products are sold when”with each of the partner company’s stores in real-time, achieving a company collaboration that feedsback sales planning, inventory, and distribution man-agement, and product development. In this way, areal-time business model that is able to provide cus-tomers with products any time has been realized,satisfying customer demands. Moreover, without be-ing limited to the supply chain, R&D departmentshave also started collaborating in the search for newvalue to acquire the strength to develop new globalproducts. For example, a food producer that was

Fig. 1 New business model through collaboration.


NEC Journal of Advanced Technology, Vol. 1, No. 1

“Dynamic Collaboration”: the model of a new business that quickly responds to changes in the market through “The integrated IT/Network solutions” provided by NEC

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criticized as not being capable of merchandizing be-cause it could not adequately preserve freshness, hassucceeded in merchandizing technology through col-laboration with a retail company that had advancedknow-how in the area of freshness control. This prod-uct became a hit, even though it was marketed in ahigh price range. Additionally, previously unthink-able R&D collaboration is taking place among compa-nies in the same trade. One Japanese pharmaceuticalcompany collaborated in research with an overseascompany specializing in the creation of drug targetexploration and research, reducing the period andcost for creating drugs in the areas of cancer, immu-nological diseases, and allergies, strong points of bothcompanies.

NEC tackled SCM reform and product competi-tiveness to increase the profit of our personal com-puter business. By collaborating with specialty com-panies such as EMS and 3PL in China for our produc-tion function, NEC built a global value chain goingbeyond affiliated companies and national boundaries(Fig. 3).

Accordingly, NEC’s personal computer businessrealized a profit increase through high-speed and low-cost operations, including a one-week reduction indelivery time, cost cuts, inventory reduction, and im-provement in the speed of new product development,which allows the quick release of competitive newproducts, such as personal computers equipped withfuel cells, to the market (Fig. 4).

3. THE IT ENVIRONMENT FOR REALIZING“DYNAMIC COLLABORATION”

In Dynamic Collaboration, it is necessary to trans-form a business process into an IT environment inwhich collaboration moves seamlessly from develop-ment to customer delivery. In advanced (complex) andexpanded business collaboration, large capacity infor-mation such as animations and voices must be ex-changed in real-time, on a global basis. In the conven-tional IT environment, technologies have become un-able to support such collaboration in terms of perfor-mance and expandability. To cope with this problem,a new IT environment that presumes collaboration isnow necessary. This IT environment will enable real-time processing, so that companies can speed up deci-sion making and operations, and become able to pre-vent the loss of business opportunities, and even tocreate new business.

NEC considers the following three points to beessential in order for an IT environment to realize“Dynamic Collaboration.”

(1) Open ConfigurationDynamic Collaboration assumes flexible

partnering transcending the boundaries betweencountries, companies, and organizations. This col-laboration requires an open and standard IT environ-ment configuration.

For example, this configuration may include the

Fig. 2 Diagram of Dynamic Collaboration.


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selection of de facto standard products with highworldwide market shares and the adoption of an in-dustry standard protocol using XML.

(2) Stress-Free Network ConnectionDynamic Collaboration requires a network envi-

ronment in which collaboration with partners can becarried out free of stress, as if people are in the samecompany and location and, therefore, without theneed to consider the network connection.

In a collaboration among companies, examples in-clude the usability of business application functions

from connected companies without the need to con-sider the network connection, as well as the seamlessaccessibility of the in-house network from outside thecompany and use of its business applications.

(3) Secure SystemDynamic Collaboration requires the robustness to

avoid lost business opportunities due to unexpectedsystem failures or natural disasters, as well as aflexible and secure information system infrastructurethat can quickly respond to the market in real-time,24-7.

For example, this system may include a redundantsystem to maintain uninterrupted operation whenthe system’s load is very high or when system prob-lems occur, and the use of a remote backup thatallows business to continue even if system problemsoccur due to regional disasters, by dispersing systemsover various remote locations.

The most important requirement in achieving suchan IT environment is to build a network infrastruc-ture and an information system infrastructure. InDynamic Collaboration, the operating cost is reducedthrough the implementation of a network infrastruc-ture that uses up-to-date standard technology such asVoIP and IPv6. This network infrastructure assists inthe real-time and global exchange of vast amounts ofinformation generated in a developing broadband en-vironment, while improving communication

Fig. 3 Reconstructing a global value chain.

Fig. 4 Reconstructing a value chain through collaboration.




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capabilities and achieving innovative work styles.Furthermore, it is essential for the information

system infrastructure to be open and standard. Withthe flexibility of an open system, the collaborativestrength among companies can be improved and glo-bal business opportunities can be increased. Ofcourse, this information system infrastructure mustbe robust in order to avoid the loss of business oppor-tunities due to unexpected system failures and natu-ral disasters.

The next requirement is the integration of newsolutions that can quickly respond to the future mar-ket environment. NEC believes that environmentalchanges in the ubiquitous network society will beincreasingly severe. In such an environment, the cre-

ation of new business through the implementation ofsolutions that utilize advanced mobile technologiesand IC tags is indispensable (Fig. 5).

4. ACHIEVING “DYNAMIC COLLABORATION”:SOLUTIONS PROPOSED BY NEC

The IT environment that can realize Dynamic Col-laboration is becoming increasingly advanced andcomplex. NEC is a leading worldwide IT vendor thatcan build and operate this advanced, highly complexIT environment with credibility. With expertise and atrack record in providing numerous solutions for anIT environment that enables Dynamic Collaboration,NEC also has the industry’s top-class products andservices.

To date, NEC has built the corporate network in-frastructures and information system infrastructuresof a vast number of customers through solutionsbased on the solution system known as“iBestSolutions” (Fig. 6). In constructing these corpo-rate network infrastructures, NEC has realized com-munication bases that have superior cost perfor-mance and real-time features by employing advancedtechnology, such as VoIP, together with proprietarycommunication technologies.

For example, for a trading company customer, webuilt a corporate network utilizing VoIP in order toimprove productivity through innovating the workstyle. In this way, the company achieved improvedoperation speed and a reduction in total cost. In

Fig. 5 IT requirements to achieve DynamicCollaboration.

Fig. 6 Integrated IT/network solution structure combined with business solutions.


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addition, for an airline company customer, we real-ized an environment in which the network bandwidthwas increased by several dozens through outsourcingthe network environment while maintaining thesame cost. This resulted in more efficient operationswith improved real-time communication.

As for the information system infrastructure, NEChas proposed and implemented the construction of abackbone system based on an open system, that is,OMCS (Open Mission Critical System), from mid1990, at the forefront of other IT vendors.

For example, for a major telecommunications com-pany customer, we constructed a super large-scalebackbone system based on an open system. Throughthis, a flexible system expandability was achievedwith the ability to support unpredictable increases intransaction volume, which could not be supported bythe conventional mainframe system. For a customerin the banking business, we built an accounting sys-tem based on an open system, which was previouslybelieved to be difficult. Thanks to the expandability ofthis new system, we realized an infrastructure thatenables the rapid installation and operation of a sys-tem for providing new future financial products.

Furthermore, our customers in the manufacturingand distribution industries needed a speedy and ex-pandable system infrastructure in order to handle thediversification of customer needs (for example, in-creased numbers of products) and the globalization ofsupply chains (for example, collaboration with over-seas operating bases and EMS vendors), among oth-ers. NEC has been providing a great number ofOMCSs to meet these needs.

An OMCS is realized through the integration of (1)NEC’s hardware and middleware products based onour platform technology “VALUMO” and (2) top-of-their-field products through strategic partnershipswith Hewlett-Packard, Oracle, BEA Systems, EMC,CISCO Systems and other companies. NEC canachieve an extremely high-quality platform that isbest suited to the needs of our customers through theproper integration of best-of-breed products (Fig. 7).

Particularly, VALUMO can construct an informa-tion system environment that reduces the total cost ofownership (TCO), and at the same time realizes dy-namic collaboration among companies and the ro-bustness of an open system. As for the technology forrealizing collaboration among companies, NEC hasimplemented Hub systems that facilitate connectionsamong information systems within and outside ofcompanies, and the “Hub & Net” system model thatconnects these hub systems with a network (Net).Using this system model, companies can dynamically

build the most suitable value chain system accordingto the needs of the market (Fig. 8).

For example, for one newspaper publishing com-pany we used a Hub & Net type of system model thatemployed a Web service technology protocol. In ashort period of time we then constructed the opera-tion flow, from article editing to newspaper produc-tion. For new operation flows among companies in thefuture, by adding a Hub system, this system modelrealizes an IT environment that can construct a newoperation flow in a much shorter time than the typicalsystem connection (Fig. 9). This technology for con-structing a flexible environment by means of Hub &Net is evolving into grid computing.

Concerning robustness, this is realized by a systemconstruction technique that prevents operations frombeing discontinued. The flexibility of an open systemis used so that in the event of system failure, theaffected computer is dynamically detached and a newcomputer is connected. As for security, NEC providestotal security technology to respond to all types ofattacks. Currently, NEC is carrying out R&D in-tended to create a more advanced security technology.For instance, we are researching the combination ofreal-time security and data mining technologies forthe early detection of intrusion and damage by anunknown new virus.

5. TOWARD PROVIDING NEW SOLUTIONS FO-CUSED ON THE UBIQUITOUS SOCIETY

Looking ahead to the arrival of the ubiquitous net-work society, NEC will continue to provide solutionsthat realize advanced real-time communication capa-bility together with leading computer and network

Fig. 7 Platform technology “VALUMO,”which supports the IT infrastructure.




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Fig. 8 Collaboration type system model created by OMCS.

Fig. 9 Achieving flexible collaboration using Web services.

technologies. For example, increasing attention isnow being given to a technology called “radio fre-quency identification” (RFID), whereby data is ex-changed by wireless link between a tag, created bycombining a super miniature antenna and an IC chip

into one unit, and a computer device. By combiningthis technology with IT solutions, it is possible toachieve more advanced SCM, improve traceability,and achieve advanced CRM and authentication. Acase in point is NEC’s support of collaboration that


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Received February 5, 2004

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Yukio YAMAZAKI joined NEC Corporation in1968. He is now Executive General Manager ofIT Solutions Marketing Operations Unit.

contributes to the business reform and process inno-vation of customers engaged in food supply chains byusing RFID in a “traceability support system” (Fig.10).

NEC will develop and provide new solutions thatuse a broadband network by converging the achieve-ments and technologies it has cultivated in its net-work solutions business and system solutions busi-ness. NEC will achieve even greater evolution of Dy-namic Collaboration in the ubiquitous network soci-ety through the further development of our custom-ers’ businesses.

In fact, NEC is actively implementing DynamicCollaboration. While incorporating these results, weprovide the ideal IT environment for customers whoseek to achieve Dynamic Collaboration. Moreover, asour customers’ best business partner, together wewill create new value.

Fig. 10 Fresh produce traceability system.

In this special issue on ‘Advanced TechnologiesDriving “Dynamic Collaboration” Featuring SystemTechnologies,’ we will introduce papers dealing withfive core technologies following next paper ‘“DynamicCollaboration” from Scientists’ Eyes.’

The technologies refer, respectively, to VALUMO(pp.27-35), Web Services (pp.36-42), Different-TypeNetwork Connection for Dynamic Collaboration(pp.43-49), Security (pp.50-55), and Grid Computing(pp.56-62). Each paper gives an overview of the tech-nology and products, and describes future trends.

I hope these papers will help you understand ourwork in striving to realize “Dynamic Collaboration”through the integrated IT/network solutions.


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