Business Networking is a socioeconomic activity by which groups of like-minded businesspeople recognize, create, or act upon business opportunities. Not to be confused with Network Marketing. A business network is a type of social network whose reason for existing is business activity. There are several prominent business networking organizations that create models of networking activity that, when followed, allow the business person to build new business relationships and generate business opportunities at the same time. A professional network service is an implementation of information technology in support of business networking. Many businesspeople contend business networking is a more cost-effective method of generating new business than advertising or public relations efforts. This is because business networking is a low-cost activity that involves more personal commitment than company money.
As an example, a business network may agree to meet weekly or monthly with the purpose of exchanging business leads and referrals with fellow members. To complement this activity, members often meet outside this circle, on their own time, and build their own one-to-one relationship with the fellow member.
Business networking can be conducted in a local business community, or on a larger scale via the Internet. Business networking websites have grown over recent years due to the Internet’s ability to connect people from all over the world. Internet companies often set up business leads for sale to bigger corporations and companies looking for data sources.
It refers to an activity coordination with a wider scope and a simpler implementation than pre-organized workflows or web-based impromptu searches for transaction counterparts (workflow is useful to coordinate activities, but it is complicated by the use of s.c. patterns to deviate the flow of work from a pure sequence, in order to compensate its intrinsic linearity; impromptu searches for transaction counterparts on the web are useful as well, but only for non-strategic supplies; both are complicated by a plethora of interfaces needed among different organizations and even between different IT applications within the same organization).
A good example of networks are the British Institute of Directors IOD, an organisation for British and International Business men. Also different Chambers of Commerce often work well.
Large Firms Networks vs. small Business Networks
Large firms networks spread wider than small business, but the difference between the two types is that to be part of a large firm network you have to achieve a preset level of success, for example fly over to China find out which factory manufactures your favorite product, go to the factory owner, offer to buy a large quantity of the product, he will give you a quote; when he does take that quote and compare to current retail prices, if it’s not lower than the retail market by 300 percent to 400 percent, then this factory is part of a business network, meaning they provide the special price only to the network members. This keeps the real value of the product hidden from the public and only available to the large firms they deal with.
Online Business Networking
Businesses are increasingly using business social networks as a means of growing their circle of business contacts and promoting themselves online. In general these networking tools allow professionals to build up their circle of business partners they trust. By connecting these business partners the networking tools allow individuals to search for certain people within their network. Through introductions, the members of these tools then can get in contact with new prospective business partners. Since businesses are expanding globally, social networks make it easier to keep in touch with other contacts around the world. Specific cross-border e-commerce platforms and business partnering networks now make globalization accessible also for small and medium sized companies.
LinkedIn founded in December 2002 and launched in May 2003, it is mainly used for professional networking. As of 3 November 2011, LinkedIn reports more than 135 million registered users in more than 200 countries and territories. The site is available in English, French, German, Italian, Portuguese, Spanish, Romanian, Russian, Turkish and Japanese. Quantcast reports LinkedIn has 21.4 million monthly unique U.S. visitors and 47.6 million globally. In June 2011, LinkedIn had 33.9 million unique visitors, up 63 percent from a year earlier and surpassing MySpace. LinkedIn filed for an initial public offering in January 2011 and traded its first shares on May 19, 2011, under the NYSE symbol “LNKD”. Recently specialist groups have been established inside the LinkedIn umbrella. Private Equity and Venture Capital Group and Deal Flow Source Group are very good examples.
Face-to-Face Business Networking
Professionals who wish to leverage their presentation skills with the urgency of physically being present attend general and exclusive events. Many professionals tend to prefer face-to-face networking over online based networking because the potential for higher quality relationships are possible. Many individuals also prefer face-to-face because people tend to prefer actually knowing and meeting who they intend to do business with.
Face to face business networking is often facilitated by referral networking clubs.
General Business Networking
Before online networking, there was and has always been, networking face-to-face. “Schmoozing” or “rubbing elbows” are expressions used among business professionals for introducing and meeting one another, and establishing rapport.
With networking developing, many businesses now have this as a core part of their strategy. Those that have developed a strong network of connections suppliers and companies can be seen as Networked Businesses, and will tend to source the business and their suppliers through the network of relationships that they have in place. Networked businesses tend to be open, random, and supportive, whereas those relying on hierarchical, traditional managed approaches are closed, selective, and controlling. These phrases were first used by Thomas Power, chairman of Ecademy, an online business network, in May 2009.
Business Networking in the ICT Domain
Companies and organizations, and related value chains and value networks need some sort of IT support. Traditionally, it is provided by software applications, software packages, ERPs, and/or workflows; presently, also by different types of web-based innovations.
A truly ICT business networking approach rethinks and rebuilds the operating support from scratch, around two key business features: information contributions, to be provided by the activities involved, whether they are performed by human beings, automated tools or jointly by the two, in a coordinated way; and automated information exchanges, to be provided by the TLC network.
Information contributions and exchanges, in turn, need to be supported by data storage and access security (signature, encryption, authentication, decryption), which both can be provided either as add-ons or as built-in features.
Sources; Wikipedia and other encyclopaedias