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Innovation Meets Collaboration

Written in cooperation with the Economist Intelligence Unit

Market pressures are forcing companies around the world to expand collaboration with third parties. To operate successfully across borders, firms must cast a wide net for skills, labor and innovative ideas. IP technology underpins each move.

Today, many firms are looking externally to tap expertise for faster innovation and greater specialization. "The prevalence of geographically distributed teams allows companies to assemble the right people with the right levels of expertise in and out of their own organization," says Thomas Malone, Professor at MIT Sloan School of Management.

As the pace of globalization accelerates and companies focus their attention beyond their usual field of operation, collaboration technology is opening up new ways to gain access to valuable knowledge from both conventional business partners and a far wider community. "In the areas where we do business, there are millions of scientists, engineers and other companies globally," says Proctor & Gamble's Chief Technology Officer, Gil Cloyd. "Why not collaborate with them?"

Some believe that the move toward this extensive kind of collaboration, enabled by Internet Protocol (IP), comes not a moment too soon. Today, the cost of a single support call for a newly purchased product can wipe out the supplier's profit margin. New, less expensive ways of operating are being sought out to make use of knowledge from new sources. With a worsening economic outlook in many markets, companies are looking to technology-enabled collaboration to maintain their competitive positioning.

New drivers of collaboration

Another trend driving the growth of collaboration is social networking. A generation of graduates is emerging that is used to staying in touch online via MySpace or Facebook. "People's social neighborhoods are no longer their geographical neighborhoods," states Malone. "The new generation is developing an intuitive understanding of collaboration. This bodes well for collaboration in the workplace," says Dan Elron, Managing Partner with consulting firm Accenture.

Enhanced IP communications and applications are an important enabler of collaboration. For example, enterprises can use presence awareness to solve the challenges of complex communications and take advantage of improved responsiveness. For global recruitment firm Harvey Nash, IP serves as the basis for a number of collaboration initiatives, ranging from meeting places in the Second Life virtual world to wikis used in high-level headhunting projects, according to CIO Alastair Behenna. Web 2.0, as well as "unified communications," the convergence of communications applications and devices on a single platform, promises to make employees' use of collaboration technology more straightforward.

How open?

However, getting collaborative technologies to work across the company is no easy matter - let alone adapting social networking to business ends. Companies are wrestling with the drive for more applications sharing with partners and the wider community, while still preserving the security of their information and their intellectual property. The Hong Kong Airport Authority maintains that the confidentiality and integrity of its IT environment are the primary considerations in the implementation of any collaboration tool, "as any compromise in security will have significant impact on business."

While sound data protection and security must be the technology foundation for collaborative efforts, some believe that firms may be clamping down too hard and blocking progress. "Companies should think more about the benefits of sharing more widely," says Malone. "Better results come from giving more power to partners." He cites the successful example of the Canada-based mining company Goldcorp, which went so far as to post all available geological data for its Red Lake mine in Ontario on its corporate website. Participants from around the world were encouraged to submit proposals identifying potential targets where the next six million ounces of gold would be found.

"We've got to think more liberally," says Behenna, of Harvey Nash. "We're used to locking things down." Ironically, not sharing enough may in itself pose the biggest risk to companies. Accenture's Elron believes the instincts of the open, sharing Facebook generation are bound to conflict with those of the old guard: "The attitude of sharing information openly will clash with the fear of security and intellectual property from the older generation," he says. "In the long term, the new generation will win."

Managing people to connect properly

Collaboration presents other managerial challenges. Employees will need to improve their time management skills to deal with increased interruptions, as they are asked more frequently to join instant collaborative sessions. They also must be able to prioritize which virtual meetings are worth attending, and which are not.

Managers need to provide guidance to help employees deal with such situations. They also need to determine how much face-to-face time is needed between team members, especially with the advent of advanced videoconferencing. On the other hand, "you can't automate the whole collaboration process," warns Elron. "There must be the right balance of technology aids and cultural enablement."

With greater use of collaboration tools, Malone points to a deep managerial change that is occurring. He believes that organizations are at the early stages of engendering "human freedom" in business. The workplace is shifting to allow staff more freedom to make decisions independently. "In many situations, better business results come from letting more people make decisions for themselves, rather than having them follow orders from a hierarchy," he contends.

Sourcing bright ideas globally

IP-enabled collaboration, coupled with well-conceived management and information-sharing policies, creates new opportunities for interacting with stakeholders. Perhaps the most attractive is the wider scope it provides for innovation, and the sourcing of new product and service ideas. For example, some companies are forming customer communities to develop products, extending beyond the limits of their own R&D or design teams.

With its pioneering Connect + Develop™ program, Proctor & Gamble seeks to collaboratively create new products and continuously improve existing brands. P&G encourages collaboration by asking on its website portal "Do you have a game-changing innovation that can help improve consumers' lives?"

Taking the theme further still, the global Web-based collaboration initiative Innocentive gives companies access to a community of 125,000 scientists to solve problems. Those who come up with the best solutions get rewarded: the top "solvers" are now earning an extra $100,000 per year from the "seeker" companies.

Pulling the threads together

Many niche applications are emerging today to support dispersed international teams across a range of industries. One example is "V-StitcherTM" from the Israeli fashion design software company Browzwear. The 3D collaboration tool can simulate fabric-draping in real-time, and incorporates IP collaboration features to bring together designers, pattern makers, retailers, brands and manufacturers. The latest V-Stitcher comes complete with a 3D human figure, or "avatar," which can be used by the international teams to model designs.

With the range of technologies now available to support collaboration, it is little wonder that a recent report found that fragmented, "dis-unified" communications are currently costing even mid-sized enterprises millions of dollars in avoidable expenses and lost productivity. The average 1,000-employee enterprise can lose nearly $13 million a year solely as a result of being unable to communicate and collaborate with others in real-time, the survey found.¹

With the arrival of Web 2.0 and its potential both to ease and expand collaboration-technology deployment, the gap between those that can effectively wield collaboration technologies, and those that can't, will widen.

¹ Measuring the Pain: What Is Fragmented Communication Costing Your Enterprise? Insignia Research / Siemens, October 2007