What happened to the Virtual Corporation?

Back in the late 1980's and early 1990's there was a lot of discussion (1) about a new type of business called a "Virtual Corporation".

At first this was very much a "futuristic vision" but it soon became an economic necessity for most large organisations as continuing globalisation in the last two decades has driven the necessity to exploit lower cost economies. This in turn necessitated the development of sophisticated supply chain management, and in due course cooperative development with key suppliers. The evolution of these sophisticated systems fostered the basic principle of outsourcing but did the more innovative virtual company concept take off?

I'm not sure that it did in the way everyone thought it would. The core principle of the virtual company approach is that a business could be formed, that controlled the definition and quality of their product or service, directly managed the demand cycle from their customers through to a well managed supply chain, but outsourced all other activities.

Whilst outsourcing has clearly proliferated in the larger corporate world, I suspect it is in the small business sector that  the principles of the virtual company are actually being used more extensively - and this has almost certainly been enabled by the Internet and so-called "long tail economics".

So as even more sophisticated and inexpensive IT/communication capabilities become available I believe it will be the small business sector that will further exploit the powerful virtual company concept.

I'm actually making a double-bet that this will be true, by not only starting my new company Enmore Services on this basis - but also basing the company's service proposition on the delivery of web services that support the typical processes needed to operate a small/medium business 'virtually'.

I'll keep you posted on our progress!


(1) see for example "The Virtual Corporation" Davidow & Malone, HarperBusiness 1992 ISBN 0-88730-593-8