Enterprise collaboration is challenging for many organizations, but it has also become a necessity. Here are five reasons why real time collaboration is required.
"Collaboration" is the Problem
Why is it so difficult to get the right people working together in a company? People have spent millennia learning how to work with each other, but it still seems as if each set of tools and each new level of complexity only serves to separate us further. Why does this happen?
I blame "collaboration." Although the goal of improving collaboration sounds positive, the term "collaboration" has been consistently abused by technology vendors, end user associations and even well-meaning employees seeking to align specific technologies with business improvements.
Based on public-facing information, one could think that collaboration is defined as a group of people, a form of unified communications, a data-driven middleware solution or simply the day-to-day interactions that we already pursue with our fellow co-workers.
To better understand how companies pursue collaboration, Aberdeen recently completed a research effort entitled Real-Time Collaboration: Innovate Your Business and Increase Revenue. Collaboration should not simply be an aggregation of people or a suite of technologies. Conference calls and big meetings aren't collaboration. Unified communication isn't collaboration.
Anyone who has endured the pain of a large conference call where everyone speaks and nobody gets anything done can understand the need for focused collaboration with specific goals in mind. At the same time, our ability to work together has definitely changed with the development of conferencing, presence, video, social business platforms and information aggregation.
Given these challenges of breadth and scope, how should we define collaboration? Aberdeen starts with the assumption that collaboration is defined as teams working together to achieve business-driven goals.
From a business perspective, companies are largely goaled on their ability to increase revenue on a year-over-year basis and to show the value of the investments that have been made. Although this sounds simple, there are multiple components that must be included.
- People Must Be Involved: Fully automated middleware and process management solutions may increase throughput and accelerate productivity, but these technology solutions do not take human input and intelligence into account to find solutions. The human element must be part of the collaborative equation.
- People Must Work Together: Rather than simply seeing people lecture each other or go through serial decision processes such as basic email, true collaboration requires that people bring multiple skill sets and perspectives together into a unified effort. Without this team effort, people are not truly collaborating, they're just throwing bodies at a problem and hoping for results.
- The Team Must Be Focused on Accomplishing Business Goals: From an enterprise perspective, this teamwork must be associated with key business objectives such as revenue improvement, customer satisfaction, and increased operational efficiency.
Based on these assumptions, Aberdeen's most recent research effort on collaboration focused on companies that excelled in revenue growth in 2010 and studied the strategies, innovation approaches and organizational structures used by these companies to understand the trends that separated the Best-in-Class organizations from all others. These divisions were defined as follows:
Defining Best-in-Class Organizations for Enterprise Collaboration:
Aberdeen Group, 2011
When Aberdeen asked these companies how they defined the ROI of their collaboration solutions, we found two major findings.
- First, the average investment of implementing a collaborative solution (including voice, social, document management and other technologies) was US$ 1.9 million dollars.
- Second, a majority of Best-in-Class organizations measured the value of collaboration in terms of increased operational efficiencies, accelerated product development, improved sales capabilities and increased lead generation, while a majority of Laggard companies saw none of these benefits.
The Need for Enterprise Collaboration
In studying collaboration through their research effort, Aberdeen found that current business pressures for real-time collaboration centered around five different themes:
1. Effective Partner/supplier Collaboration (36% of respondents)
As third-party organizations become more important for service and product delivery, the integration of partners and suppliers has become increasingly important from a holistic perspective.
In March 2010, Aberdeen focused more closely on this topic in the benchmark report B2B Integration and Collaboration. This report showed how multi-enterprise supply chains met the challenges of escalating customer service demands and increased business complexity to increase the percentage of orders completed and delivered on-time.
Aberdeen found that the top 20% of supply chains were five-times more likely to indicate that trading community management has a mission critical impact to their organization.
2. Need to Increase Innovation (35% of respondents)
The vast majority of organizations claimed to have some level of innovative program in place. However, the quick changing nature of modern business demands an approach towards more transformative and enterprise-wide innovation for organizations seeking to increase revenue growth.
Only half of all companies had a consistent and business-wide commitment to innovation, and even fewer had a transformative process committed to surviving the inevitable obsolescence of current products through future-facing actions.
The struggle to enact company-wide or disruptive innovation is challenging, even if the business need for this change to achieve continued success has been documented in books such as Jim Collins' From Good to Great and Clayton Christensen's The Innovator's Dilemma.
Aberdeen Group, February 2011
For those that succeeded, these innovation efforts were core to collaborative efforts and led to key business improvements. Best-in-Class companies were 75% more likely to have an enterprise-wide innovation effort and 50% more likely to have a disrupting innovation effort (defined as modeling a new business model that actually disrupts the old business model) compared to all other companies.
3. Increasing Employee Cohesiveness on a Global/enterprise-wide Scale (31% of respondents)
There is no such thing as a truly local business any more. With the globalized talent market, the importance of web commerce and the development of cloud computing, companies that have not extended beyond their own physical footprint are working at a disadvantage compared to their industry competitors.
Best-in-Class organizations were able to share critical information throughout the company in less than an hour, while Laggards took an average of 2.7 days. This difference was important both in accelerating tactical responses and strategic positioning based on real-time events.
4. Identifying New Market Opportunities (31% of respondents)
One of the most interesting aspects of this research was the discontinuity of logic between the bottom 30% of collaborators (defined as Laggards) compared to the Best-in-Class. Fifty-two percent of Laggards stated that a competitive disadvantage of executing in the marketplace would be a reason to consider increased collaboration, but they felt it wasn't necessary at this time.
At the same time, these Laggards averaged a 7.3% decrease in revenue in 2010 compared to the average respondent, which averaged a 7.5% increase in revenue. These companies are already struggling compared to their counterparts and are responding with a collaborative approach that is inferior to their peers.
This may be one of the most obvious definitions of Einstein's definition of insanity: "Doing the same thing over and over again and expecting different results," but as a group, these Laggard companies are in denial about their current collaboration practices.
5. Fear of Losing Proprietary and Institutional Knowledge (29% of respondents)
This need was felt more strongly by companies at lower levels of collaboration. Best-in-Class companies were 33% less likely to worry about this business continuity as key personnel left the organization because they had built a collaborative solution that fostered employee interaction, documentation and analysis on a continuous basis.
Instead of working in silos, these Best-in-Class organizations were able to gain value by sharing information and allowing employees to document their own experiences on an ad-hoc basis both for themselves and for their colleagues.
Although many real-time collaboration technologies can be considered cutting-edge and new, only 19% of respondents indicated that a generational shift leading to employee demand for online collaboration was a top reason for seeking real-time collaboration.
Despite the media focus on Millennials and social collaboration, this generation is not driving the majority of companies to seek collaboration. Rather, the need for more effective business interactions and continuity from a generational and geographic perspective were more important.
Fundamentally, companies that succeeded in gaining value from their collaborative solutions weren’t focused on the novelty of social business solutions or the technical complexity of aggregating technologies. Although they did use new social and process-driven technologies, the focus was on empowering all employees.
How did Best-in-Class organizations meet these five core pressures compared to all other organizations?
There was no magic bullet for organizations seeking to improve their collaborative efforts. Top organizations made a holistic commitment to becoming a more functional and connected company. This commitment involved developing new processes and policies to optimize collaborative practices, tweaking their organizational structure, improving knowledge and data management capabilities with a particular focus on search, quantifying the value of collaboration and making appropriate technology investments.
In Part 2 of this series, Aberdeen will provide greater insight into the tactical actions that companies took to deliver effective collaboration to the enterprise.
Editor's Note: Additional Articles on Enterprise Collaboration include: