Does Collaboration Really Impact Business Performance?

5 minute read
Jacob Morgan avatar

Can collaboration really impact business performance in some sort of a meaningful way? All signs point to yes.

If you're in the collaboration, Enterprise 2.0, knowledge management space, then you should be aware of a few reports that Frost & Sullivan have published on the business impact of collaboration. The first report was based on a study conducted in 2006 and the second report was based on a study conducted in 2009. Both reports conclude that collaboration does have a significant effect on business performance. While I'm not going to cover the methodology here, what I will cover are the findings of the reports. Before reading, please keep in mind that these reports were sponsored by Cisco, Microsoft and Verizon.

Collaboration and Business Performance

So does collaboration really impact business performance? Yes!

Based on the findings from the first report, collaboration impacts virtually every aspect of business, more so than both a company's strategy orientation and market turbulence.

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We can see from the chart that collaboration has an enormous effect not just on overall performance but on profitability, innovation and even customer satisfaction. Now, while this report was conducted in 2006 the 2009 findings also corroborate this.

I should point that Frost & Sullivan took a slightly different approach to their most recent report, ranking organizations as being either basic, intermediate or advanced collaborators (this wasn't done in the 2006 report).


So again we can see that the more collaboratively advanced an organization is, the greater the ROC or Return on Collaboration (the formula for this can be found in the second report mentioned above). Notice that basic and intermediate collaborators don't have that big of a gap between them, however advanced collaborators seem to have a much greater return than both intermediate and basic collaborators. The characteristics used to measure the level of collaboration within the enterprise can be seen below.

The Missing Software

For those of you in the Enterprise 2.0/collaboration space you will notice a huge missing section on collaboration tools. There is no mention of intranets, wikis, internal social networks or anything of the like included anywhere in the report.  In my opinion this is not only an oversight but a factor that really throws a wrench in the whole report (and this was from the 2009 report).  

Perhaps this is the just the downside of having organizations such Cisco and Verizon sponsor reports -- the report is skewed towards products and services that they offer. These Enterprise 2.0 tools are becoming a huge factor and characteristic of effective collaboration and should have been included in the report.

The Individual's Collaboration Needs

Although collaboration is important, the individual needs of employees are just as important. Based on the first report, the 5 key individual collaboration needs met are:

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Learning Opportunities

It's also interesting to point out that:

54% believe that these tools allow for a better balance between work and life outside of work. Moreover, 52% think that newer communication devices enable them to gain more control in their busy lives."

Does Size Matter?

Organizations can be comprised of a small group of people or thousands of people and collaboration will impact those organizations differently. Frost & Sullivan actually broke down the effectiveness of collaboration on SMB and Enterprise organizations.  Personally, I would have liked to see 3 or 4 groupings of companies instead of just two, but either way the results do paint an interesting picture. 

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Successful collaboration really does depend on scale and network size so it's no wonder that enterprise organizations saw a much greater return on collaboration than SMBs. One thing we notice is that regardless of organization size, R&D and sales are the two departments that have the greatest ROC (human resources has the lowest ROC).

Industries Big on Collaboration

Which industries are deploying technology solutions for collaboration? Frost & Sullivan found that the financial services, high technology and professional services industries were among the most aggressive when it came to technology deployment. Sure, there are some industries missing here but I think this is a good big picture.

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It's clear that collaboration has a strong impact on overall business performance. However, I believe that impact is underscored in both reports as Enterprise 2.0 tools/software were omitted from the reports. I think the results would have been even more positive had they been included.

I highly recommend you read both reports as there is a lot more information in the 36 pages (18 each) that I did not cover here. You might want to show these reports to your boss along with the list of 50+ enterprise 2.0 case studies and stories that I have compiled. I hope this give you the ammunition you need to move your collaboration efforts forward.

I'd love to hear your thoughts on the reports, did you draw any other conclusions that I may have missed? Leave your comments below!