Winning New Markets Through Collaboration

IT needs to play a strategic role to make it all work.

Over the next 3 years, C-level executives will expand their collaboration efforts with customers partners and suppliers as a way to win new markets and quickly address customer needs. According to the survey conducted by BusinessWeek Research Services and commissioned by SAP AG, the executives emphasized the importance of information technology and its role in facilitating integration to support their companies' business goals of increasing levels of collaboration by more than a third.

Additionally, nearly twice as many small businesses and midsize companies expect to rely heavily on collaboration within the next three years as well.

Approximately one out of three respondents identified access to new markets and customers as one of the top benefits to collaboration today. Roughly half of the respondents said they are currently counting on partners for R&D, manufacturing, marketing, logistics, distribution, customer service, human resources or other corporate functions -- and two-thirds expect to be reliant on third parties for these functions to some extent by 2011.

Large and midsize businesses also plan to outsource 18% of their operations by 2011. They already outsource 13.4% of their operations to date.

In the survey findings, a Procter & Gamble executive addresses the reasons for seeking out third parties for collaboration: "The reason we had to do it was that the world had changed," says Jeff Weedman, vice president for external business development at manufacturer Procter & Gamble Co. "Only about one-third of the products we brought to market were successes. The fast-followers were getting faster, and the retailers were increasingly our competitors ... Over time, we've been able to understand networks and the value of them, so we've added places to look for ideas and technologies."

Nearly twice as many SMEs are expecting to rely more heavily on collaboration in the next three years. The survey findings show that the percentage of business operations supported by external partners of SMEs will triple by 2011 and are approaching the level of partnering currently used by large companies.

In addition to gaining access to new markets and obtaining cost benefits, SMEs emphasize improved quality as one of the most important benefits for collaboration.

As for IT's role in collaboration, only half of the C-level executives responding to the survey are confident that their IT infrastructures will be able to support their collaboration strategies during the next three years. This result underscores the crucial role IT plays in facilitating collaboration and enabling business transformation.

While CEOs are embracing the concept of developing customer-centric business models by optimizing the company's network of employees, suppliers, customers, partners and distributors, IT needs to play a strategic role to make it all work.


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