Friday, 17 September 2010

Dr Jay Bal, The Digital Lab, Warwick University - Virtual Enterprise Network delivers real returns

A Growing Success  -  West Midlands
Collaborative Commerce Marketplace Pays off

Dr Jay Bal, Digital Lab,
The University of Warwick
Do you want to gain more sales for your business and achieve better margins?

Dr Jay Bal of the Digital Lab at The University of Warwick has some answers that might interest you.(1)  

He and his team set up a website, but not just any old website, a 'Virtual Enterprise Network',, The West Midlands Collaborative Commerce Marketplace. 

So what, you may think...  Well, that is not the view of around 10,500 or so businesses registered as members of this virtual business network... And especially not the view of those which have generated up to 6 million euros in sales as a result. 

Whilst many of us have been talking about the knowledge economy, Jay has been constructing it right here on our doorstep. But many of us will have been unaware of his efforts.

The knowledge economy has driven growth in developed economies over the past several decades. It is clustered in urban centres.   In the UK 27% of knowledge economy employment is located in and around London with a further 20% located in 11 of the UK's core cities, including Birmingham. 

Birmingham, with a private knowledge sector accounting for just over 24% of its economy, is one of the places where the density of the knowledge-based sectors has been declining. This is going to be a challenge for us as the public sector budgets are cut. 

Whilst the term 'knowledge economy' is widely used, it's not often defined and includes 'medium and high tech manufacturing, business and high tech services, financial services, education and healthcare services and cultural and creative services'.

The knowledge economy includes some special features - intangible assets are driving growth - design and brand equity, R&D, technology, processes, human capital, are outstripping the importance of tangible assets.

Thinking about the West Midlands we have a substantial base in productive businesses employing medium and high technologies and which also have world-leading brands, many associated with aspirational lifestyles - Jaguar Landrover, JCB, Aston Martin, Morgan Motor Company,  Aga, Rayburn and Rangemaster, to name a few.  These and other productive businesses are still contributing almost a third of the region's gross value added.

This means that sources of knowledge are increasingly important, how knowledge is used and deployed is vital, together with securing the talent or knowledge workers who are increasingly mobile working where they can achieve the best professional and quality of life outcomes. The services element of products has also taken on a greater significance with the term 'manuservices' having been coined by Will Hutton of the Work Foundation.

One of the key features of these sectors is that growth can be accelerated through 'design and innovation eco-systems'....networks, virtual and real, that provide effective opportunities to exchange knowledge and information that can add value. 

Design is the bridge between the
consumer questing for the experiential
and the company trying to meet that
appetite with an offer that presents
the new in a user-friendly and
innovative way.’ Will Hutton, 'Design and the Knowledge Economy 2020'

Dr Bal and his team have created just such an eco-system and it is the only one of its kind in Europe.  They have focussed on knowledge exchanges and collaborations between businesses, initially with a focus on automotive, aerospace and engineering.

Dr Bal explains "Of course there are other online business systems, the Yorkshire Virtual Enterprise Network for one, but it is the 'smart design' of the functionality behind the West Midlands Collaborative Commerce Network as a virtual enterprise network that sets it apart from anything else around.

"Our member businesses are 3-5 times more likely to get business enquiries from this site than they were prior to registering.  This is because of some unique functionality that we've built into our system."

Jay’s team constructed their site, or the West Midlands Collaborative Commerce Marketplace (not, perhaps, the snazziest of names...but it 'does what it says on the can') with key aims in mind:

1) They wanted to build a site which would generate business enquiries and be ranked highly by google search engines.

2) They built in tender feeds generating real business leads for members - but these weren't just ‘regurgitating’ tenders there was some clever functionality built into their tender feeds which I shall come onto...

3) They built competency profiles for member companies, not just what you do today but what you are capable of doing These competencies were matched to tender requirements automatically by the system. His team competency profiled 400 businesses across the West Midlands.

They recognised that Tier 1 businesses don't build the whole product themselves and increasingly many smaller businesses are needing to collaborate more and more to get a foothold in valuable tender generated business contracts, especially when it comes to the larger and more complex tenders.

4) The WMCCM system feeds tenders to companies it recognises as having some of the skills required for any tender being circulatedMember companies can then assess if they want to cluster together and collaborate with other businesses to respond to the tender. The system will match them with 'compatible businesses'. Companies can determine if they want to work with businesses with certain characteristics - by size, company type, and select their preferences. 

It will then seek to provide a list of possible compatible business partners.  Businesses can decide if they wish to start a collaboration or not.  As the system works on the basis of capabilities rather than what businesses are doing today it has led to some successful diversifications for member businesses.

Whilst not all businesses work in this way, those that have mastered this skill set have become wealthy on the back of it. Dr Bal claims that several millionaires have been created in the West Midlands as a result and that the site is visited by companies from 150 countries worldwide.

Jay Bal's collaborative commerce market has generated 6 million Euros of new business revenues - primarily between 2006-2008, 150 new jobs in the supply chain through contracts they have won, 250 jobs in total and 100 new start up businesses.  

Over 50,000 tenders per year flow through the system, with over 11000 users and over 1000 vistors per day to the site.

"We exceeded all the outputs required of our project, which was supported by ERDF funding." says Dr Bal.

His team invested £250k building the system which is totally automated. All the member business has to do is accept or reject any offer put to them. 

"The World Bank has recognised WMCCM's capacity as a new business incubation system and they are using it as an exemplar virtual business incubator." 

At the Birmingham Institute of Art & Design I am keen to see the functionalities of Dr Bal's virtual enterprise network extended to facilitate networking between our Art & Design students and businesses in the wider region.   

I'd like to make it much simpler for companies looking for young talent to work with them whilst students are still studying at BIAD so we can facilitate such early collaborations between all parties to achieve better outcomes and knowledge transfer.  We'd like to include virtual collaborative spaces for design which could be used in projects involving students and partner businesses, incorporating tools such as 'Google sketch' which, according to Dr Bal, is increasingly replacing auto CAD in engineering businesses.  Ideally we'd like to work with other universities so that we can all encourage these forms of networking.

We'd like to start to enable greater networking across sectors to facilitate knowledge transfer of the sort that has occurred in our businesses but the pace of which can certainly be enhanced.

For example, Charles Morgan of the Morgan Motor Company outlined to us in his visiting lecture how his company has benefitted from super-formed steel parts used in the bodywork requiring less primer - a technology which came out of aero engineering and how his business employs setting, manipulating and wood curving techniques in their car interiors which came from the furniture industry. 

If you are interested in finding out more about our project to create a design and innovation network for the West Midlands then please contact me on

(1) Profile: Dr. Jay Bal, Associate Professor, The Digital Lab, The University of Warwick
is exploiting the internet to maximise business opportunities for thousands of companies in the West Midlands. Dr Bal, an associate professor, is director of WMG’s Interlean EBusiness centre, where an eight-strong team operates the flourishing collaborative commerce marketplace, The online e-commerce scheme is a meeting point for organisations who are putting contracts out to tender and businesses able to do the work.

There are around 10,000 registered business members (and a waiting list of another 500), over 50,000 tenders per year flow through the system, 11000+ users and over 1000 vistors per day to the site.  The system provides a feed of OJEC, local council, EU FP7 and other tender opportunities as well as the first Olympic tenders opportunity and capability site in the UK. The system functionality is used by a range of organisations such as the IMRC, PARD, ICT cluster, Medilink, XGEN and Leicershire Build. Currently the on-line catalogue and shop capability for the portal is being redesigned. This will allow us to move businesses from zero to full e-business capability in days, drastically altering the current models for e-adoption. The National B2B centre is using this approach to help its clients.

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