INNOVATION & COLLABORATION: PROCESS TRANSFORMATION

A new study released today by the Business Performance Management (BPM) Forum and the Chief Marketing Officer (CMO) Council reported by CNN, titled Greater Innovation Through Closer Collaboration, finds that 21st Century business models have become increasingly dependent on partner networks to shape customer experiences, drive innovation processes and deliver products and services to global markets. But information systems and cross-company business processes, however, are strained to keep pace.

The report sponsored by Sterling Commerce and AT&T, is based on a survey of over 400 executives and managers across a wide range of industries, as well as over two dozen qualitative interviews with leading executives from global businesses.

While the report highlights the growing significance of cross-company collaboration it also points to the internal difficulties facing companies to effectively harvest their social capital, increase innovation and collaboration and expose this to partners and customers alike.

Thus the report details the following awareness of the importance of the external relationships necessary to their businesses:

  • 73 percent of respondents are investing in programs and systems to optimize the way they collaborate with partners;
  • 37 percent of respondents say their partner networks are contributing significant innovation, insight and value to their business, further emphasizing the return from program investment:
  • Executives are also responding to the pressure to transform customer experience and satisfaction as nearly 4 in 10 respondents report that their customers are demanding greater visibility into both their supply and distribution chains.

CROSS-COMPANY COLLABORATION STILL LOW

But the report highlights how information systems and cross-company business processes are not keeping pace with increased business interdependence to enable companies to achieve round-the-clock collaboration, shared innovation, improved productivity and cooperative customer handling:

  • Only 6 percent of respondents say they currently have end-to-end data and process integration across their partner networks, although 51 percent report at least some level of integration with select partners;
  • Some 64 percent of respondents say they have either no ability or an unsatisfactory ability to extend and leverage their internal systems to selling and service partners;
  • Some 75 percent say they have no ability or an unsatisfactory ability to extend and leverage their internal systems to suppliers and outsourced service providers;
  • Only 26 percent of respondents say they are effective in sharing customer data and insights with partners to enable innovation.

INNOVATING BEYOND COST SAVING

The study reveals that outsourcing, supplier and demand chain partnerships are contributing far more to their businesses than just cost savings and operational capacity. The challenge is how to increase productivity across their value chains. As the report states:

Many companies see themselves at the hub of their own business network, but also say they are participating in the business networks of other companies. On the one hand, they are organizing, managing and collaborating with partners and vendors to coordinate their own value chain to customers. On the other, they are interacting in other networks that have their own set of customers. This intricate web of interdependencies is elevating the need for improved and agile cross-company integration and coordination, and for the creation of what we refer to as “Business Collaboration Networks.”

To create Business Collaboration Networks means serious investment in both internal and external systems to increase the productivity and effectiveness of key relationships, from improving supplier vendor management, global procurement and sourcing; customer handling and support; sales and customer acquisition; transportation and warehousing; order management and fulfillment; and product life-cycle management.

But on the key question of innovation, the report touts the familiar mantra of co-innovation.

While the attempt by 23 per cent of participants point to a move within their companies toward co-innovation as a major driver to transform their ability to collaborate more seamlessly with partners, the authors of the report believe this move will become an even more powerful driver in the years ahead. Nearly 40 percent of study participants believe their partner networks are already contributing significantly to innovation, insight and customer value.

But the move toward a more open and collaborative network model that embrace the ideas and innovative capacity of both customers and partners, if it is to be more than a gimmick, means substantial improvements in key business processes – internally and externally. This is the area where the real potential of Enterprise 2.0 really lies – in the internal transformation of processes and the flows of information between employees – to increase the collaborative capital underpinning day-to-day business. Otherwise Business Collaboration Networks will simply become another management mantra which will yet again be seen everywhere apart from in the productivity statistics.

2 thoughts on “INNOVATION & COLLABORATION: PROCESS TRANSFORMATION

  1. I think I’ve commented on this subject before – the advent of the commercial use of social networking software combined with the power of the cloud and pay as you go apps is a massive leaverage for small inovative companiies to collaborate to compete. Will the big boyz follow suite? I doubt it. Most corporates are too conservative and overly structured to be fleet of foot enough to use these features. And possibly nor should they. They can afford their own corporate apps behind their firewalls, plus traditional marketing tools. Where I think they are looking to encourage inovative co-opoeration (as opposed to automating things like their suply chain) is in areas like SOA and exposing internal processing the the web. That way the leviathans encourage us pilot fish to co-operate with them to our mutual advantage.

    1. Thanks for the comments and points which are well made. I’m not sure I agree that the big boyz will not follow suite. This report suggests (note, only suggests) that they are beginning to see that they need to change internal and external processes and relationships. I think it is dawning upon them that this technology can be effective if used properly. My big caveat is that what prevents them is the short-termism that seems institutionalised in current biz practices. But smart people are beginning to take note. Never say never.

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