ROI: Collaboration Equals Domination

[From iSource Business, October 2001] Working closely with your suppliers is hardly a novel concept, but the Internet and collaborative software are supercharging these relationships, says Lucine King, a senior analyst with Forrester Research in Cambridge, Mass. In fact, by 2003, 72 percent of organizations expect supplier collaboration to be critical to their success compared to only 34 percent today, writes King.

Collaboration efforts run the gamut from concept creation to post-launch support, says King, but most companies expect the greatest gains to materialize in the middle ground: prototype design and product launch. Forrester asked 50 large manufacturers to rank their top goals for online collaboration, and the reply was threefold. First, 74 percent hope to achieve a faster time to market; second, 48 percent want to see reduced product costs; and finally, 32 percent would like the levels of quality to increase.

Companies that distribute product development mixing internal talent with outside expertise are particularly ripe for these expected efficiency improvements and cost savings. Like the majority of early adopters, they aren¹t forming cohesive units overnight, tackling individual processes instead. For example, InFocus and Precor, which manufacture digital projectors and exercise equipment, respectively, are focusing their initial collaboration efforts on the product-build stage and product-change synchronization. 

A successful collaboration initiative isn't simply a matter of throwing the appropriate software at targeted processes. There are numerous prerequisites and obstacles, but companies that have given online collaboration a shot say reported savings thus far are well worth the effort. In fact, predicts King, in the future these efforts may spell the difference between market domination and company solvency.

Various software products exist to facilitate collaborative processes, but, in the case of InFocus and Precor, both decided the Agile Anywhere product from the San Jose, Calif.-based Agile Software Corp. best suited their individual business needs. And, thus far, their sizable software investments in the $200,000 neighborhood for Precor have paid off. Both realized a ROI within a year, but the long-term benefits unveil the software's true value: ongoing cost savings, improving products and, most importantly, beating competitors to market.