Innovation through Collaboration: Addressing Flat World Challenges in the Hi-Tech Industry
The global business scenario has changed dramatically in the last year. Rising costs continue to put pressure on margins; globalization and the power of emerging economies are increasing the complexity of the business environment, and customer expectations from vendors and service providers has multiplied exponentially. The economic slowdown, collapse of the housing market and unexpected exchange rate fluctuations have made the business environment even more difficult. C-Level executives can no longer rely on conventional approaches to create a competitive advantage and have to look at innovation through collaboration to steer their organizations through turbulent times.
Traditionally, hi-tech companies have had a linear approach to their supply chain. The model was characterized by limited collaboration and information sharing between partners leading to pain points such as limited supply chain visibility, inflexible distribution processes, excess inventory, running out of stock and delays. These pain points led to the emergence of the first wave of collaboration between suppliers, contractors and partners in areas like procurement and logistics. Collaborative practices like Collaborative Planning, Forecasting and Replenishment (CPFR) and Vendor Managed Inventory (VMI) were central to this model. For want of a more appropriate term, I would call this the emergence of the Collaboration 1.0 paradigm. Platforms like ERP, SCM and SRM are key enablers for the Collaboration 1.0 paradigm.
A flattening world is forcing organizations to shift their operational priorities and evolve the collaboration 1.0 paradigm further. Two shifts are of great importance to hi-tech companies-- loyalty through faster innovation and making money from information. Customer service has become a hygiene factor and customer loyalty is now being driven by faster innovation, rapid concept-to-market and product co-creation. This has led to the extension of the collaboration paradigm to customer facing functions in the supply chain, namely the product design and prototyping phase. It would be apt to call this new wave of collaboration as the Collaboration 2.0 paradigm.
Most organizations have access to structured information through their transactional systems and enterprise applications like ERP, SCM etc. There is also a huge mine of unstructured information available to organizations from external and internal sources. Collaboration 2.0 looks at utilizing this pool of unstructured information to innovatively co-create products with customers and offer a superior customer experience. Emergent Web 2.0 technologies like blogs, wikis, widgets, podcasts, and social networking are key drivers for this model. For example, emerging technologies like social networking or blogs can be used by companies to share expectations, knowledge and experiences with partners and come up with better product and service ideas.
Several hi-tech companies have been leaders in adopting the Collaboration 2.0 paradigm. Companies like Dell engage with communities on Facebook and use their websites (Ideastorm) to enable a collective design approach. Nokia had an interesting initiative called Concept Lounge where designers were invited to share their ideas and design for the next cool phone. The concept for the Wrist Band Style Nokia 888(not launched) phone was the winning entry here. The Graphic Communications division of Kodak has a Web2.0 community which provides a marketing supply chain to members and also helps load balance production during peak periods.
It is very important that business leaders draw inspiration from such instances and enhance their collaboration touchpoints. The collaboration toolkit of companies has to be a combination of traditional and emergent technologies. I believe that companies that judiciously adopt the Collaboration 2.0 paradigm will be better positioned to create competitive advantage in a flattening world.
It would be good to hear your thoughts and experiences on Collaboration 2.0 and how companies can innovate through collaboration
You can view the presentation that I made at Oracle Open World below
Comments
A very nice article indeed. I have written a similar thing on my blog where I have stressed the importance of blogs, networking site or some forum where the organization keeps their shareholders, partners, vendors informed about the latest happenings in the organization and business domain.Blogs have come a long way as a contributor to increase knowledge. Sometimes, it can be used as a potential Knowledge Management Tool. Not only that, Blogging is often viewed as a tool for business networking.
Posted by: Ashutosh Bose | November 18, 2008 11:21 AM
Leveraging the Internet as a medium for collaboration can be a competitive advantage as is evident from the recent US presidential elections where Obama identified opportunity (new young voters) and leveraged technology to draw them towards a common cause.
Customer advocacy and common customer experience are the new mantras for growing and sustaining customer base in today's challenging times.
Social computing (blogs, podcasts) has given companies new capabilities in the midst of changing consumer preferences and increasing competition.
Companies are good at innovation within small units, but fail to leverage synergies across divisions of lines of business. Segregation of the organization in units drives efficiency for effective strategy execution, but it has its cost. Cross divisional/partner collaboration is limited and new opportunities are either lost or not executed well. Informal communication through social networks therefore must be shaped and cultivated to efficiently find and exploit innovations for tommorow.
It is not surprising that Warner-AOL merger could not do what Apple did in launching iTunes. People have used social networking for their competitive leverage and the time is ripe for organizations. Companies investing and cultivating social networking will be tomorrow's winners!
Posted by: Ankit Dangar | January 9, 2009 02:51 AM
This is extremely relevant for ‘Energy & Utilities’ sector too. There is a paradigm shift in the role of a Utility Customer now. Collaboration to the extent that a Customer would be the key participant in all Green-Initiatives - be it planning for energy efficiency programs, or installing renewable sources of power or launching demand-response and dynamic pricing programs.
The concept of a Smart Electricity Grid falls apart without active Collaboration between Generators, Transporters, Telecom providers, Regulators and End Users.
Posted by: Sachin Kumar | August 28, 2009 06:29 PM