• January 13, 2010
  • By Jessica Tsai, Assistant Editor, CRM magazine

Partner Collaboration Critical to Innovation

Enterprise collaboration internally isn't the only thing companies need to be more efficient. The Chief Marketing Officer (CMO) Council and the Business Performance Management (BPM) Forum recently released a study that pointed to the imperative of enhancing partner collaboration. The report, "Greater Innovation Through Closer Collaboration," surveyed over 400 business professionals worldwide from varying industries. For the most part, companies recognize that business partners are critical to the overall business, with many pointing to the network's ability to help expand into new regions and opportunities.

While 8 percent say the management of the partner network is "highly effective," 46 percent of companies still report their network being "effective." However, that's not much further ahead of the 43 percent that say their organization's initiatives-integrating, coordinating, and optimizing-around the partner network "needs improvement" (43 percent), and another 3 percent that report it's simply "ineffective."

"What a business collaboration does is literally flatten the world," says Liz Miller, vice president of the BPM Forum and CMO Council. According to Miller, business collaboration will be especially critical in the next year as three trends continue to force companies toward sustainable growth:

  • increasing business complexity growing out of globalized business;
  • higher demands for more robust technology infrastructure; and
  • always-on engagement to optimize customer experience.

Companies are feeling the pressure from these trends and understand that collaboration is critical. The top benefits business executives report they believe will come as a result of a well-integrated, tightly-linked business partner network are:

  • faster time to problem resolution (55 percent);
  • enhanced customer service and support (52 percent);
  • better innovation around products and services (45 percent).

Incidentally, customers were ranked as the most critical external resource in terms of business partnerships, which is logical given that the majority (64 percent) of executives reported that customer intimacy, connectivity, and community were "essential" to both the company's value proposition and competitive strategy. Other resources that were recognized by more than 50 percent of survey respondents include:

  • customers (79 percent);
  • suppliers and vendors (72 percent); and
  • technology partners (56 percent); and
  • distributors, resellers, and channel partners (51 percent).

The survey reported that a significant portion of companies strive to not only increase their participation in business networks, but move to become the "hub."

  • no change (32 percent)
  • increasingly at the center organizing our own network of partners (47 percent); and
  • increasingly participating as a partner in other company's networks (21 percent).

"Executives in the c-suite get that this type of cross functional [approach] in the company doesn't just end in the confines of the company," Miller says. However, while the interest is high, many companies are stilling feeling apprehensive about "turning the switch on," she says. In other words, they're still looking at business processes as separate, siloed functions. According to the report, only 7 percent of respondents reported end-to-end integration and automation across the value chain; while 50 percent said their current level of data integration and business process automation between the company and its partners was confined among select partners, and "still a work in progress." This group was followed by 20 percent who said that data integration and business process automation was a "major need" but investment is stunted due to limited budgets and a lack of senior-level support.

The challenge of integration, however, can be traced further back to the fact that 35 percent of survey respondents reported that the systems they have in place for data and insight sharing as it applies to business partners is "mostly effective," compared to 26 percent that say it's highly effective, and only 5 percent that say it's highly effective. "I don't think we're ignoring our insights team," Miller says, "but we keep them in that bubble. By having a single platform, with your vendors/partners, companies [will be taking] the next step."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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