Executives worldwide are struggling with the challenges of integration and collaboration across complex networks of business partners and customers according to a new study released by the Business Performance Management (BPM) Forum and the Chief Marketing Officer (CMO) Council.
The study finds that 21st Century business models have become increasingly dependent on partner networks to shape customer experiences, drive innovation processes and deliver products and services to global markets.
Information systems and cross-company business processes, however, are strained to keep pace.
According to key findings in the research, executives appear to be well aware of the need for significant improvement:
Some 68 per cent of respondents indicate that business partners are essential to their companies’ go-to-market processes, customer experience and competitive position.
More than half say their partner networks are becoming more global and complex, yet, only 8 per cent of executives believe their companies are highly effective in the way they integrate and optimise these business networks.
Greater Innovation Through Closer Collaboration, sponsored by Sterling Commerce and AT&T, is based on a survey of over 400 executives and managers across a wide range of industries, as well as over two dozen qualitative interviews with leading executives from global businesses including Best Buy, United Rentals, and PepsiCo.
The report can be downloaded by visiting http://www.bizcollaboration.org/collaborate-report.php.
Even in a difficult economic environment, the vast majority of companies — some 73 per cent of respondents — are investing in programs and systems to optimise the way they collaborate with partners.
37 percent of respondents say their partner networks are contributing significant innovation, insight and value to their business, further emphasising the return from program investment.
Executives are also responding to the pressure to transform customer experience and satisfaction as nearly 4 in 10 respondents report that their customers are demanding greater visibility into both their supply and distribution chains.
“Twenty-first century business models are more dependent than ever on complex, cross-company collaboration for business innovation, product and service delivery and customer satisfaction,” says Liz Miller, vice president of the BPM Forum and CMO Council.
“Developing and extending information systems, business processes and corporate cultures to succeed in a global networked economy will become increasingly critical for global businesses.”
The study underscores that information systems and cross-company business processes, are not keeping pace with increased business interdependence to enable companies to achieve round-the-clock collaboration, shared innovation, improved productivity and cooperative customer handling.
Only 6 per cent of respondents say they currently have end-to-end data and process integration across their partner networks, although 51 per cent report at least some level of integration with select partners.
Some 64 per cent of respondents say they have either no ability or an unsatisfactory ability to extend and leverage their internal systems to selling and service partners.
Some 75 per cent say they have no ability or an unsatisfactory ability to extend and leverage their internal systems to suppliers and outsourced service providers.
Only 26 per cent of respondents say they are effective in sharing customer data and insights with partners to enable innovation.
“As businesses look to improve performance and be more adaptable to market opportunities, managing complex webs of interconnected vendors and partners has become a business necessity,” says Joel Reed, Senior Vice President Product Management and Marketing, Sterling Commerce.
“Those webs encompass a company’s Business Collaboration Network, which, when optimized, can transform what used to be called the ‘supply chain’ into a differentiating ‘value chain’ that helps increase productivity, speed time to market, and reduced risk and cost associated with compliance.”
The study finds that business network transformation holds multiple direct benefits to customer experience, including faster time to product resolution (55 per cent), reduced cost of customer support (42 per cent) and better innovation around products and services (45 per cent).
Some 42 per cent of respondents say they rely heavily on suppliers and outsourced services to meet customer needs and more than 51 per cent say integration of partner networks with the customer is important to delivering enhanced service and support.
The study makes it clear that outsourcing, supplier and demand chain partnerships are contributing far more than just cost savings and operational capacity for today’s global businesses.
Executives are concerned with improving productivity across their value chains as indicated by at least 25 per cent of respondents signaling a significant need for improvement in supplier vendor management, global procurement and sourcing; customer handling and support; sales and customer acquisition; transportation and warehousing; order management and fulfillment; and product lifecycle management.
“This research highlights the need for today’s business to have access to systems and networking solutions that cross borders and functional barriers to connect vendors, partners and customers,” says Alicia Dietsch, Vice President, Business Marketing Communications & Operations of AT&T.
“Connectivity in today’s fast-paced market breeds innovation — and new ways to serve and engage with customers. We can’t let cost, burden and hassle be barriers to innovation.”
About the BPM Forum The Business Performance Management (BPM) Forum is dedicated to advancing performance accountability, process improvement, operational visibility and compliance in global organisations. It provides support to thousands of senior executives and practitioners representing enterprises with more than $500 billion in combined annual revenues.
The BPM Forum’s C-level members engage in research, thought leadership, and knowledge exchange programs around a variety of strategic issues and challenges. More information is available at: www.BPMForum.org.