Collaboration Impact on: Enterprise Business Performance
Everyone has heard about the wide variety of tools available to support and encourage enterprise collaboration. But collaboration doesn't start with a tool, it starts with people. Collaboration is a hot topic right now, and has been for a good few years. The word 'enterprise' in front and the term becomes even more newsworthy. "Enterprise collaboration -- yes that's what we should be doing" is a sentence that can be heard in various guises across boardrooms all over the world. When you really think about it, collaboration is at the very heart of every business on the planet. It's very rare that you find someone that is isolated from the rest of the company. Most people are a part of a team that needs to work together to achieve the best possible results; that team is a part of many teams that all need to work together to help grow an enterprise. We collaborate in pretty much everything we do at work, it's not always efficient and it's not always effective, but what if it were?
Frost & Sullivan along with Verizon Business and Microsoft conducted research around the impact of collaboration within the enterprise. The results of the study showed that collaboration is a key driver of company performance (the study was conducted in 2006). A global collaboration index model was developed which looked at variable factors that affect collaboration as well as several variables that affect company performance.
The highlight of the research project was that 36% of a company's performance was due to its collaboration index, 16& was due to strategic orientation and 7% was due to market and technological turbulence influence. Here is how collaboration affected the various aspects of business performance:
From the key numbers from the chart, collaboration impacts:
Profitability by 29%
Sales growth by 27%
Profit growth by 26%
41% of forces driving customer satisfaction
Productivity by 36%
Product quality by 34%
Product development by 30%
Innovation by 30%
I found the report to be very interesting and definitely deserve a considerable amount of attention in the Enterprise 2.0 space. I haven't found a report as comprehensive as this one yet (have you?). This report was released in 2006 and it would be very interesting to see how these numbers have changed over the past four years. If you ask me, this report needs to be placed in front of every key decision maker at every enterprise company.
Further evidence supports the notion that collaboration is centered around people and not on technology. Technology can facilitate more efficient forms of collaboration and knowledge sharing but its effectiveness is an issue of deep and widespread integration and adoption. Collaboration needs to be addressed from and individual and an enterprise benefit standpoint. The enterprise benefits have been discussed extensively and include things such as reduced costs, improved innovation and ideation, and improved company performance (see chart above). However, there are also individual benefits of effective collaboration which Frost & Sullivan have clearly identified:
The challenge that I believe we are seeing today in Enterprise 2.0 is a very strong focus and push around tools instead of strategy. Collaboration is nothing new and goes back to caveman days where teams had to work together to hunt animals. Cavemen didn't have an enterprise social software platform to discuss ideas around where and how to hunt, yet they still managed to do a fantastic job of hunting. Why then today are we so focused on platforms and tools when the real issue is around culture and people? I'll talk more about some of the potential hurdles (as well as other topics) in the near future, but for now read and digest the report so we can discuss it.
