Collaboration technologies, which are designed to allow companies to share information internally and with their trading partners and customers, continue to generate an extraordinary buzz in the marketplace, but many corporate leaders may still be wondering what all the fuss is about.
To gain an understanding of one piece of this puzzle - collaborative product development - iSource Business recently spoke with Cliff Stockley, the affable vice president of client services at Framework Technologies Corp. Framework offers a solution called ActiveProject, a Web-based project management tool that allows companies to establish a "project space" where employees and business partners can share information as they move through the product development process.
We started our conversation with the obvious question: Why should companies think about a collaborative product development solution?
Stockley: Businesses are increasingly looking to outsource parts of their business. Many companies are really design and marketing firms; they don't actually make the products themselves. They bring together partners that will design the product, design the tooling and manufacture the product, and then it's either shipped in pieces or it's shipped to some final assembly for the company that's finally going to sell it.
There are some mature, well-founded technologies in the market, such as PDM [product data management], ERP [enterprise resource planning] and supply chain management, which add value to different parts of the lifecycle of a product and obviously do different things in that process. But I don't believe any of what I would call the traditional systems deal very well with the very complex set of iterations that people have to go through to launch that product. A lot of it involves ad hoc processes that differ from project to project, and it involves different partners in each project, so there are very few rules that are defined or written.
Framework focuses on the true product development piece, going from the idea of making a new product in order to meet a gap in the market - the design-on-the-napkin stage - through to the moment when you actually launch that product.
iSource: What is it that people are looking to get out of this type of solution?
Stockley: At the user level, what people want to be able to do is share information. They want to be able to know when certain pieces of information - a CAD model, a specification or a test plan - change, and they want to know that they're always working on the latest versions.
At the project manager level, the most important thing is always the schedule and achieving the dates. They want a set of tools to track a project, communicate deadlines, track progress against those deadlines and track any slippages.
At the executive level, people want to put some level of control and discipline into the product development process. They don't want to stifle innovation, but they want to make sure that there are review points, or review gates, that they go through to make sure that they are on track. ActiveProject, for example, enables executives to look at the investment to develop [a product] and the sales value they are going to get back, and it offers a method to review these gates to make decisions earlier in the design process as to whether or not to kill a project rather than spend valuable [research and development] money.
iSource: Does moving to this type of collaboration solution entail automating existing processes, or is it a matter of creating new processes?
Stockley: Defining the entire product-development process is a difficult task. The reason is because a lot of it involves engineers, and engineers, by their nature, are unwieldy people to regiment I was an engineer 20 years ago, so I can relate to that. Even a single company might have different product development teams that want to work in different ways.
A big part of the challenge for companies, therefore, is enabling that creativity, allowing a lot of ad hoc decisions to still be made, but also creating some degree of control over the system. So what Framework did was build our tools to be process independent. We don't recommend that clients go through any process re-engineering activities. We focus less on the process and more on the information sharing, the communication and the collaboration.
iSource: Is there a challenge in bringing the supply base on board with this type of initiative?
Stockley: No, most suppliers are trying to get closer to their customers. I think the biggest challenge is the culture shift involved in bringing suppliers into the development process much earlier. That concept is, initially, alien to a lot of companies. There have been four walls around design in the past: "When I'm ready, I'll send you a drawing and I'll tell you what I want you to make." So that culture shift - toward bringing the supplier in and asking, "How do I make it?" - is one that companies are starting to address. They are starting to realize that there is immense value in doing that.
iSource: Do companies get nervous about having the information out there in a collaborative workspace?
Stockley: No, because they've already made a conscious decision to involve their suppliers, and therefore they're going to do this information sharing.
Very early on there were fears - more from suppliers than from customers - about sharing the intellectual property around how they make something. Suppliers were concerned about sharing some of their techniques, technologies and approaches in case the customer tried to acquire those and use them for themselves. But what we're finding is that more and more customers are saying that they want to focus on the strategic pieces of their business and use their suppliers to help them satisfy that plan.
iSource: Has the return on investment (ROI) case for this type of solution been fully developed?
Stockley: There still is progress to be made for the ROI case, but a general understanding has developed. Framework Technologies commissioned an independent study from the Hurwitz Group last year to survey our customers and garner that understanding of ROI. Some of the ROI is tactical, while some is very strategic. For example, a number of the companies were able to reduce their time to market up to 20 percent. If a company can get their product to market 20 percent earlier, they will most likely (a) obtain a larger market share, and (b) in those months that they reached the market earlier, charge a higher price, especially if they are first. Those are some of the drivers that people are looking to.
In addition, manufacturers are seeing reductions in engineer changes and rework. They're seeing significant improvements in first article quality, and they're also gaining the ability to involve their suppliers and other departments much earlier in the process. Those latter two are much harder to put an ROI value on, but there's no doubt in my mind that this is what is driving that earlier-to-market benefit.
iSource: Are your potential customers buying into the ROI?
Stockley: I think a lot of people are realizing the significance of ROI. Customers realize they have absolutely optimized their manufacturing processes. Now they're looking at the cycle time to go from an idea to getting the product to the shipping dock. Some of the studies that we've done have shown that the product development and planning processes, and some of the sales activities, can account for up to 80 percent of the time to get a product to market. The manufacturing and distribution fall somewhere around 20 percent. People are looking at these numbers and saying, "If I'm going to invest money, where do I invest it to get that product to market 10 percent faster?"
So the actual concepts, I'm finding, are reasonably well accepted. And it's interesting that when we talk with executives, their number one driver, consistently, comes out as time to market. Improving product quality is normally second, and reducing product cost is normally third.
iSource: What misconceptions do you encounter about what this type of tool can do?
Stockley: Today, the word "collaboration" has become a very broad term, applicable to a whole range of activities. A lot of people are claiming they have a collaborative capability, which they do have, but they have that collaborative capability for the piece of the process that they are involved in. So a little part of what we have to do is position ourselves in terms of how Framework Technologies is different. We enable collaborative product development, and that is really the piece of the space that we are focused on.
