Today, we are living in a revolutionary changing business environment defined by global competition, increasing business and technological complexity, faster flow of information and communication, and pervasive globalization. In many industries competitive advantage may depend upon a company's ability to rapidly respond to frequent and unpredictable change whilst producing customized products for customers‘ specific requirements (Goldman et aI., I995). The new manufacturing paradigm in today's changing business environment is agility.

Networking seems to be a common trend in today's business and industry practice [Lambert et al., 1998), (Christopher, 1998) and (Best, 1990). Traditionally large corporations have performed all manufacturing in- house, but today they have reassessed their basic make- or—buy decisions in favour of outsourcing. They have focused on their core competencies and started to benefit also other companies‘ competencies for supporting their own internal core skills. Today each company is somehow integrated into a network of selected suppliers, customers and value—added resellers, and even with competitors. This development offers new opportunities for SMEs as potential co—operation partners. Today SMEs are trying to move towards more collaborative relationships and towards longer—term strategic partnerships, typically in the business network with the focal company.

Effective and efficient business networks needs to manage the coordination of inter—organisational processes (IOP). This requires increasingly information technology (IT) support and at the moment it is not covered sufficiently enough by traditional information and Enterprise Resource Planning (ERP) systems. IT solutions should more support the dynamic nature of business networks, easy integration for existing software solutions and ensure the comfortable and affordable business-to—business [B2B] communication. By using new emerging technologies and advantaging the infrastructure of Internet, the inter—organisational coordination of business network is applicable and affordable also for SMEs.

This study proposes the digital business design as a future business model to support agility in supply chains and to provide a competitive advantage in terms of speed and storage capability with simultaneous reductions in cost and size. This paper presents the development process of a business network aiming to be competitive in global markets by increasing its agility. It consists of developing an e-business roadmap and the supporting software solution for inter—organisational coordination in business network. The whole development process of business network requires changes in a way of action, and improvements in using information and communication technology (ICT) more beneficial.

The empirical data for the study was collected in a business network, which brings together a group of T9 companies most of them SMEs - in Northern Finland. In practice this study consists of empirical research conducted as a case study in the steel product industry business network between the years 2001-2004. A list of activities was drawn up in order to analyze the network and its operations and to collect information for the development process (Alaruikka et al., 2004). Firstly, unstructured interviews were held in order to get a realistic understanding of the companies and their activities and to select the business process under study. Secondly, based on these discussions, specific questionnaire for companies was designed in order to find out the critical issues of the supply chain. Thirdly, two sample product processes (order—delivery processes] were modelled by following through their value chains. Theme interviews with the operational staff and key persons of the companies were held in order to identify the improving possibilities of the supply chains (Helaakoski et al., 2007]. The purpose of the interviews was to find out the critical issues in information flows and the development possibilities of the information flow. Finally, two workshops were arranged in order to start to develop the e—business road map for the business network. The development road map is based on the development frame of Poirier and Bauer (2000).

The software development process adopted principles from the agile software development according to [Highsmith et al., 2005). Therefore the technical research is based on iterative prototyping with close discussion and collaboration with the real end users. For example the requirement specification was defined with companies, but in the same it notices the changes in technology and business environment. The IOS is based on mutual knowledge management from different data sources and applications; therefore the knowledge database is based on mutually agreed ontology (Fensel, 2001] to ensure the shared understanding about the concepts within the network and to provide a basis for agent communication. The user friendliness and the usability of the software has to be especially noticed and even the first Graphical User Interfaces (GUI) of IOS were tested with the real end users. According to these tests the functionality and the appearance of the IOS were further developed by using several iteration rounds.

The way business was conducted even a decade ago is no longer acceptable if a business intends to remain competitive. Earlier, the paradigms where business was managed were economics of scale, cost [productivity], quality and time (delivery speed and reliability), whereas today, as the rate of product change and product introduction increases, flexibility and rapid innovation are more critical capabilities than ever before (Kolarik, 1999], [Monden, 1998), (Pine, 1993], (Womack et al., 1996). The requirements for economics of scale, based on the traditional assumption of mass production, are coming in direct conflict with the requirements for economics of scope that is maintaining continuous innovation while using people and equipments to cost-effectively produce smaller amount of a range products (Montgomery and Levine, 1996). Agility addresses new ways of running companies to meet these challenges. Agility is about casting off those old ways of doing things that are no longer appropriate changing pattern of traditional operation. in a changing competitive environment, there is a need to develop organizations and facilities significantly more flexible and responsive than current existing ones (Gunasekaran, 1999]. Agility is largely independent of other best management approaches that a company can practice. Companies ability to make things better, faster, and cheaper today says nothing, or very little, about the ability to change, in a fast and cheap way, to make something else better, faster, and cheaper, or to respond in other respect to unanticipated changes (Goranson, 1999].

The need for agility for market competitiveness has traditionally been associated with the supply chains that provide and manufacture innovative products, such as high-technology industry products characterized by shortened life—cycles, high degrees of market volatility, uncertainty in demand and unreliability in supply. Similarly, the traditional industry faces such challenges in terms of requirements for more customized products, solutions to customer problems and shorter order ledd—times. Moreover, product life-cycles are shortening, and the need for becoming agile is becoming more prevalent. Some traditional companies are already employing elements of agility because the realities of the competitive environment dictate these changes, but this is usually outside of any strategic vision and is approached in an ad hoc fashion [Haapasalo et al., 2004) . The lack of a systematic approach to agility doesn't allow companies to develop the necessary proficiency in change, a prerequisite for agility. There are no guidelines telling how much uncertainty can be reduced or how much the complexity should be reduced. The companies have to make a trade—off between vulnerability (increased by uncertainty and complexity] and supply chain agility (flexibility and speed in sourcing, manufacturing and delivery] (Prater et al., 2001]. This means that instead of aiming at full compliance with the initial definition of agility, companies should concentrate rather on some selected key aspects of an agile supply chain.

One way to enhance agility in supply chains is the utilization of right mix of ICT (Lee and Whang, 2001). Many ICT systems have been developed for Supply Chain Management (SCM) from EDI (Electronic Data Exchange) and ERP to newly developed SCM systems and e-business solutions, and recently, software agent technology has shown a great potential for supporting information management in supply networks (Jennings et al., 1995], (Jennings and Wooldridge, 1998). By adopting e-business approaches for SCM, companies can realize dramatic returns through efficiency improvements, better asset utilization, faster time to market, reduction in total order fulfilment times, enhanced customer service and responsiveness, penetrating new markets, higher return on assets, and ultimately, higher shareholder value (Lee and Whang, 2001) . E-business creates new opportunities to rethink business models, processes, and relationships along the supply chain [Brynjolfsson and Urban, 2002]. Many companies are discovering whole new approaches to conducting business, and even new business opportunities not previously possible (Lee and Whang, 2001) .

One of the most significant features of modern business environment is that individual companies no longer compete as solely autonomous entities; rather, the competition is between rival supply chains, or more like closely coordinated, cooperative supply networks, called also supply webs (Lambert et aI., I998), (Christopher, I998) . Some other net—structure concepts can also be found in the literature, i.e., “virtual supply chain” (Chandrashekar and Schary, 1999), “demand satisfaction community” (Hewitt, 2000), ‘‘value net" (Bovet, and Martha, 2000], ‘‘value web” (Andrews, and Hahn, 1998], ‘‘value chain constellation" (Poirier and Bauer, 2000], “virtual enterprise" (Browne and Zhang, 1999), and “extended enterprise” (Browne, Sackett, and Wortmann, 1995) . All of these concepts present the new form of the digital business design, where the information flows play an integral role within the network. Especially the Internet enables the digital business design, which captures customer's real choices in real time and transmits them digitally to other participants of the network. These Internet enabled chains are frequently referred also to as “e— commerce supply chains” (Gunasekaran, Marri, McGaughey and Nebhwani, 2002) . E—suppIy chains — chains that use e-business models and web technology - can be seen simply as processes necessary to transfer the goods sold over Internet to the customers, but widely e- supply chain is defined as wide—ranging topic related to the supply chain integration (Poirier and Bauer, 2000). This new structure of the supply highlights the simultaneous communication between different parties and the integration of the supply chain as a whole, not only the communication between the consecutive phases of the process. The common factors of all these concepts are that they are more or less focusing on the customer [producing more value to the customer and thus hooking the customer), dynamic designs that can be continuously developed and adjusted to changes, digital, agile and scalable, network—formed or “amoeba—like", and responding fast to changes (Poirier and Bauer, 2000), [Chandrashekar and Schary, 1999), (Bovet, and Martha, 2000) .

In the following paragraphs, we have taken a closer look to the “virtual enterprise" [VE). Browne and Zhang, (1999) define VE as a temporary consortium of independent member companies and indeed individuals, who come together to exploit a particular market opportunity. VE companies assemble themselves based on cost- effectiveness and product uniqueness without regard to organization size, geographic location, computing environments, technologies deployed, or processes implemented. They share cost, skills, and core competences which collectively enable them to access global markets with world class solutions that could not be provided by any one of them individually Browne (Browne and Zhang, 1999) . The success of the VE depends on intensive information sharing, and it is enabled by sophisticated information technology, which makes business information transparent, seamless and easily accessible at any time and at any place [Browne and Zhang, 1999) . Time to market is greatly reduced through quick response manufacturing with integrated and co- ordinated product design and manufacturing from all the participants. Also, VE pursues enterprise partnerships in order to achieve business success in a very competitive environment (Browne and Zhang, 1999). VE is based on independent partners who create temporary relationships for the purpose of creating new products and services, it is frequently project based, and requires quick—creating and quick—dissolving organization, whose operation especially depends on fast and accurate information transactions.

According to Zhang (1998), an evolutionary model of e- business implementation involves two variables: the network integration and the technological integration.

Network integration consists of sharing the resources and collaboration in a common environment by using information networks. Technological integration is a company's ability to have ICT systems, which can be used to control many different company functions, and which interact with each other either using similar communication protocols or adopting interfaces to allow different systems to communicate. The model of Muffatto and Payaro (2004) proposes five stages for the implementation of e—business within an existing company i ) traditional communication tools, 2) internal integration, 3) Web—based communication tools, 4) XML (extensible Markup Language) Web—based platform, and 5) integrated enterprise. In stage 5 the company, dealers and suppliers use the same information platform to communicate and the various information management systems are perfectly integrated (Cucchiella etal., 2008).

This case study presents the software system which provides a common platform for communication and information transmission of SMEs. It also tackles the problem of system integration between companies by using agent technology. Agent technology has been considered as an important approach for developing industrial distributed systems (Jennings et al., 1995), [Jennings and Wooldridge, 1998). According to Papazoglou (2001), intelligent business agents are the next level of abstraction in model-based solutions to e- commerce application. By building on the distributed object foundation, agent technology can help bridge the remaining gap between flexible design and usable applications.

The software solution, called SteelNet, is focused for knowledge management of case VE, which consist of several SMEs and one focal company. Effective and efficient collaboration of this VE requires technical support for knowledge and information management of lOPs and furthermore changes in their way of actions. Figure 1 presents the SteelNet software agent solution to support supply chain and network coordination by transmitting information about processes and material flows. The SteelNet software agent solution enables information transparency by providing real—time information for network companies about manufacturing states of mutually processed products.

Figure 1. The Coordination of lnter—organisational Prosesses with SteelNet system.

According to Yang and Papazoglou (2000) an ideal e- commerce application should eliminate the gaps between ordering, distribution and payment, enabling the development of interoperable links to record—keeping and accounting information system. SteelNet—solution notices these requirements along with logistics information systems (LIS) principles [Bowersox, and Class, 1996). It is designed to cover the whole procurement process in the network. When the bottlenecks of the procurement process were researched detailed, most of them were found from the manufacturing process and first prototype implementation was done for controlling this process between companies.

During the specification process of the manufacturing controlling prototype SMEs in business network set requirements for IOS:

• IOS must support different roles of companies; each company can have different roles in network depending on current delivery. Therefore all companies must have equal rights and responsibilities for using IOS ( Haapasalo et al, 2002). [lskanius. and Haapasalo, 2003).
• The integration for companies‘ own diverging ICT systems must be supported.
• Support Plug—and—play, joining and leaving the IOS have to be effortless.
• Security and access control, controlled information transparency in the IOS.
• In requirement specification the expertise of SME's personnel was exploited, especially when the ontology and the functionality of graphical user interfaces (GUls) were determined. Ontology definition process was essential in order to provide concept for agent collaboration, while each company understood business concepts differently. The concepts and the meaning of these concepts were agreed and shared understanding about the concepts was reached. As a result was the manufacturing ontology for communication basis of agent collaboration. As ontology tool the Protégé ontology environmentwas used (lskanius efaI., 2005).

In the definition process of GUls the key aspects were the easiness of use and learning of the use. The GUl's were implemented with web—technology and they were simplified so that only really necessary information was gathered on them. Figure 2 presents the main GUI of the manufacturing control prototype. The user interface shows the central information about order, order lines and manufacturing processes related to order lines for every company in the VE in real-time. The manufacturing states and estimated schedules are described with colour codes, so users can quickly notice whether the manufacturing is on, ahead, or behind an agreed schedule.

Figure 2. Main GUI of Manufacturing Control prototype

The most challenging during IOS implementation process was to define the functionality, since each company emphasised different goals and therefore the mutual commitment of the functionality required several meetings. The other challenging issue was to define mutually agreed concepts for VE. These concepts form a basis both for human collaboration and software interoperability. But the most complex challenge was the integration of legacy systems with the prototype, which advantages the use of software agents. These difficulties were coped with conversation and close co-operation with companies‘ personnel.

Today's competitive environment requires companies to manage cross—organizational information and at the same time control material flows in order to produce and deliver their products or services better, faster, and cheaper than the competitors. Companies must organize their operations according to the sudden changes in supply chain like customer's changing requirements, changes in resource and capacity. New network-based organizational forms such as VEs make it possible to quickly exploit not only company's own, but also the collective resources of the supply chain. New business designs generate and share mutual information; therefore the information must be visible and transparent through the whole supply chain. Most of the discussion of SCM in business networks is based on the premise that information will be freely shared among partners. This requires a total trust within business network. However, companies are not eager to share information unless there is a positive proof that sharing information is equally beneficial for all members of the supply chain. The withholding of information by even one member in the chain can lead to loss of trust and dysfunctional behaviour among all members despite the best technology facilitating information flow [lskanius and Page, 2005).

Even though the case network seems to be in the very beginning in adopting the methods of the ICT, the need to improve the level of integration and information sharing is highly recognized in the networking companies. The companies involved in the case network have been enthusiastic to develop their business processes and business models towards e—business. Companies have taken a concrete step by taking part in development process of the SteelNet system. SteelNet system gives an opportunity for real—time and transparent information sharing. It is generated to fit for needs of small and big companies with different levels of ICT systems. Also, SteelNet system has strong characteristics of VE; transparent and seamless business information sharing is being enabled by agent software solution. Network companies together exploit market opportunities and share costs, skills, and core competences. Intensive co- operation between personnel of the companies and researchers has formed the system to answer for the requirements of every day duties (lskanius and Page, 2007) .

However, seamless integration with complete information sharing between all supply chain participants is still in the future. Since a number of autonomous companies belong to the supply chain network, it becomes imperative to develop a common mission, goals, and objectives for the group as a whole, while pursuing independent policies at an individual member's level. This scenario offers opportunities for design, modelling, and implementation of supply chain networks for maximum effectiveness, efficiency, and productivity in dynamic environments.

The collaboration and sharing of information is growing all the time in business environment. Our paper introduces a case study, a real life VE, where SMEs are working together in order to maintain competitiveness in global markets. The significance of the IOS in this case study is obvious, while current information systems do not cover inter- organisational coordination of processes and the enterprises had constant problems for controlling the mutual processes. SteelNet software solution tries to tackle these problems by providing an affordable and effortless for information management for VE. At the moment, we are about to test SteelNet software in real use and the significance of the software will be really measured [Muhos etal., 2007].

New business design based on Internet and agent technology integrates physically dispersed manufacturing companies and their customers to ensure that all the members of the business network receive accurate information in a timely manner. This kind of sophisticated ICT system is the basis of an enterprise's information resources, the bridge between partners, a platform for knowledge management and the learning— oriented organisation, as well as a powerful tool for promoting innovations. As ICT systems become really common in action, it has a significant effect to the other business applications, but it is question of some other paper.