Collaborating with partners is a business priority, but companies are struggling to untangle the growing complexity of their supply networks, according to a survey.
Some 68% of respondents to a joint Business Performance Management (BPM) Forum and Chief Marketing Officer (CMO) Council study acknowledged that business partners were essential to their competitiveness and customer service. Yet, only 8% were confident that their companies had integrated their networks effectively. The situation was likely to worsen, as more than half of the respondents said their networks were growing in complexity and global scope.
These business collaboration networks should be seen as “the next generation supply chain” said Liz Miller, vice president of the BPM Forum and CMO Council. Unlike supply chains, which are often treated as a distinct business silo, companies must integrate suppliers, partners and everyone in the company to create a single business collaboration network. Through this mass-scale collaboration, they will be able to speed up productivity, reduce costs and ultimately serve customers more effectively.
“The view we certainly got from executives is they know this is going to differentiate them in a very tough marketplace, but the challenge is they are not set up to do it,” said Miller.
Large gaps in IT’s ability to support collaboration were identified. Only 6% of respondents said they had end-to-end data and process integration across partner networks. Only 26% said they could share customer data and insights with customers which would enable innovation.
“We’re not just talking about customer data here,” said Miller, “but the internal finance data and back-office data – all these functions need to be aligned to have visibility, but without putting any data at risk. The fact of the matter is all individual silos need to be interconnected.
“If 2009 was the year of recession, 2010 has to be the year of silo busting. You can’t just look at individual functions, you need to have visibility within and external to your companies and a set of interconnected webs.”
This lack of connectedness with partners, suppliers and outsourcers meant companies were missing out on benefits such as faster product releases, reduced customer support costs and better innovation.
The study, Greater Innovation Through Closer Collaboration, was sponsored by Sterling Commerce and AT&T. It is based on the views of more than 400 executives and in-depth interviews with 12 senior executives at global brands.