How are borders in industry changing?

The Industry Without Borders project launched by the German-French Academy for the Industry of the Future in 2017 seeks to challenge the idea that digital technology dissolves borders. Madeleine Besson and Judith Igelboeck, from Institut Mines-Télécom Business School and the Technical University of Munich respectively, explain why it is not so easy in practice.

Industry is going digital and this has brought about a wave of changes. The emphasis on open innovation pushes for the dissolution of borders within a company and in relationships between various organizations. “It’s not so easy,” says Madeleine Besson, a researcher in management at Institut Mines-Télécom Business School. “We’ve seen that it’s becoming more fluid, but digitalization can also create new borders or reinforce those that already exist.”

The aim of the Industry Without Borders  project launched in 2017 was to identify factors that can lead to the creation of borders in companies and look at how these aspects are evolving. The project is led by the German-French Academy for the Industry of the Future, which brings together teams from IMT and the Technical University of Munich (TUM). “We looked at the way borders can be built, rebuilt, and at times, strengthened or effectively broken down,”  says Judith Igelsboeck, an organizational studies researcher at TUM. Research teams on both sides of the Rhine worked with companies, through field studies and qualitative interviews, in order to determine the changes that have been brought about by digital technology.

“We considered the idea of open innovation in particular,” says Madeleine Besson. Today, companies  consult consumers much more often in the processes of creation and innovation, but it often remains  under the company’s control. Conversely, Judith Igelsboeck reports that “a study in an IT consulting firm in Germany showed that customers went so far as to request the firm’s skills database so that they could choose the profiles of the IT specialists for their project directly themselves. The opening here is therefore clear.”

What borders?

“For a long time, borders in the business world were formalized from an economic viewpoint,” explains the French researcher. This includes assets and goods, employees and the machines used. “But the scope is much wider than that, and most importantly, it’s very mobile.”  A number of other aspects may also come into play, such as customer relationships and their involvement in innovation processes, as in the previous example, and relationships between different companies.

As far as internal borders are concerned, for example concerning organization within a department, management models tend to be moving toward eliminating borders. “This idea is reflected in efforts to redesign the very architecture of the office – the principle of open space,” explains Judith Igelsboeck. Workspaces become more agile, flexible and free of internal separations. The aim is to create more communal spaces, so that co-workers get to know each other better in order to work together.

But ultimately, open space may not be as open as it seems. “Employees reclaim ownership of the space by creating borders to mark out their personal space,” says Madeleine Besson. They do so by making special adjustments – at times perceptible only to those who use the workspace – to mark a space as their own.

Read more on I’MTech: Can workspaces become agile?

Madeleine Besson reminds us that, “the general consensus in scientific literature and the media is that digital tools and artificial intelligence facilitate instant connections, not only between people, but between things.” Supply chains should be developed in a single, seamless automated process, that can work beyond organizational borders. But it is not so clear in practice, and digital tools even appear to add new barriers.

Between theory and practice

“Imagine a printer that uses an automated tool to help manage the paper supply,”  says the French researcher. “A connected IT system between the paper supplier and the printer could help regulate paper ordering depending on current stock and the factories’ operations. The supplier becomes a sort of stockpile the company can draw on – the system is shared and the borders are therefore weakened.”

Yet, the same example could also be used to illustrate how new borders are created. If these companies use competing systems, such as Apple and Android, they will face insurmountable barriers since these two systems are not interoperable. “Technological change can also create a new border,”  adds Madeleine Besson. “It can create sub-categories between organizations that have the desire and skills to converse with computers, and others that may feel like they are merely assistants for automatons.”

“Our team encountered such a feeling during an interview with the staff of an after-sales service company,”  says the researcher. Their workday revolves around making rounds to customers whose equipment has broken down. Traditionally, these employees organized their own rounds. But their schedule is now managed by a computer system and they receive the list of customers to visit the night before. “The employees were frustrated that they were no longer in control of their own schedule. They didn’t want their responsibilities to be taken away”  she explains.

“They would meet up in the morning before making their rounds to exchange appointments. Some didn’t want to go to into big cities, others wanted to keep the customers they’d been working with for a long time. So the digital tool puts up a barrier within the company and is a source of tension and frustration, which could potentially give rise to conflicts or disputes.”  These changes are made without adequately consulting the internal parties involved and can lead to conflict in the company’s overall operations.

Across the Rhine

This initial phase of the project with a number of field studies in France and Germany is expected to lead to new collaborations. For the researchers, it would be interesting to study the changes on either side of the Rhine and determine whether similar transformations are underway, or if a cultural aspect may lead to either the dissolution or crystallization of borders.

“Each country has its own vision and strategy for the industry of the future,”  says Judith Igelsboeck. So it is conceivable that cultural differences will be perceptible. “The intercultural aspect is a point to be considered, but for now, we haven’t been able to study it in a single company with a German and French branch.”  This may be the topic for a new French-German collaboration. The German researcher says that another possible follow-up to this project could focus on the use of artificial intelligence in business management.

Tiphaine Claveau for I’MTech