Collaboration Is the Key

By : Jim Pinto,
San Diego, CA.

In a fast-changing world, collaboration allows companies to react more quickly to changes in supply and demand. In the next few years your enterprise will be collaborative - or it won't exist at all.

A version of this article was published by:
Automation World, February 2005

Software has become an essential tool for the improvement of manufacturing plants. There is a plethora of choices in almost every category – MRP, ERP, MES, CRP, CRM, EPM, EQM, SCM – and a host of other acronyms. Few companies have incorporated all of these, or have integrated them optimally to operate seamlessly. The more likely scenario is that they were installed at different times by different parts of the company, each to solve their own, isolated problems.

Trying to integrate the hodge-podge of legacy systems often generates difficulties related to duplicated applications, redundant data and nonstandard technologies in different parts of the company. Disparate systems which must be integrated cause inefficiencies and escalated costs. Valuable time is spent on maintaining, patching and fixing numerous variants, rather than developing innovative new systems. One often wishes that the old systems could simply be written off, to make a clean start. And the larger suppliers will recommend just that because their systems include most, if not all, of the functionality. But this involves prohibitive costs – both upfront as well as education and implementation.

There's another big problem. Today, the pace of business today is so rapid that few can predict its twists and turns. Change is sometimes so rapid that even long-standing relationships may falter. Yesterday’s valued supplier may become tomorrow’s competitor. Or, large customers may suddenly disappear, victims of rapid technology shift or offshore transfers. A dependable software supplier may suddenly be a merger casualty, making already-installed software a casualty of obsolescence – e.g. Peoplesoft was recently acquired by Oracle; Baan was acquired by Invensys and then divested.

With continued, accelerating change, how does one stay abreast? In my opinion, collaboration is the key. This means the sharing of business information rapidly and effectively with suppliers and customers – and perhaps even suppliers’ suppliers and customers’ customers. Collaboration brings major benefits for all the companies involved.

The Harvard Business Review reports that a 5% increase in customer retention can result in a 25% to 95% increase in profits from that relationship. To maximize their return on relationship investments, companies must seek ways to drive additional revenues and profits from existing relationships. This comes through strong collaboration.

To collaborate effectively, company employees must work in extended virtual teams comprising colleagues, as well as customers and supplier partners. Just as collaboration between separate departments within companies proved to be very effective in the past, now collaboration must be extended beyond conventional corporate boundaries. Working in multi-company environments, transcending international boundaries, people must be assigned to establish collaborative relationships. These may be short-term, project-focused or long-term multi-project planning staff. Strong mutual inter-company benefits will build relationships, and yield results. Companies must invest in selecting the right people who can learn how to work with suppliers and customers and determine how to extract the most value in terms of mutual revenues and profits.

An effective enterprise collaboration solution must provide the technical systems links for people to work together in distributed, cross-organizational teams. Effective communications must be enabled across distance, time zones, and company borders, encouraging team members to discuss, analyze and review information collaboratively.

This kind of collaboration expands the conventional borders of the company. People can utilize the work experience of others in the extended enterprise and learn organizational practices and methods from peers in collaborating companies. Team members should be available from anywhere, at any time through a browser. As a result, the team and the companies will grow smarter and add more value every day as they refine and reuse their knowledge.

As companies work together, they generate mountains of unstructured information that is tough to synthesize in one company and seemingly impossible to rationalize between multiple companies. But new enterprise collaboration technology makes this possible. Desktop and intranet search and data mining solutions now allow companies to utilize more and more of the knowledge that most enterprise systems simply leave untapped in information archives.

Expand your horizons, by expanding the borders of your company through collaboration. The question is – who can your company collaborate with? The answer is relatively simple: your best suppliers, and your best customers. Collaboration increases revenues and profits for all the participants.

Industry experts and businesses that have implemented collaborative techniques claim that collaboration is a key enabler, allowing companies to react more quickly to changes in supply and demand. In the next few years your enterprise will be collaborative - or it won’t exist at all.

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Copyright 2003 : Jim Pinto, San Diego, CA, USA