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Social Powers Business Ecosystems
Posted on January 31st 2014
The complexity of a collaboration task is in part a function of the number and variety of people required to complete the task. For this reason some of the greatest value from using social technology comes when a company connects its employees to a network of partners — suppliers, distributors, service providers and an emerging category of co-creation partners. This installment in my series on the connected enterprise will address some of the opportunities and challenges companies face when they extend collaboration platforms outside the enterprise.
In the first article of this series I discussed how social is a critical part of the digital transformation process that every company must go through today in order to stay competitive and profitable in their industries. The three areas of application for social are first with employees (which I discussed in more detail in part 2 of this series), partners, and ultimately building social collaboration platforms to engage with customers. In examining the importance of social for partner interactions one should start with the four categories of partners and explore how each has different benefits and challenges. Companies can identify the most valuable use cases for social collaboration using the same “business impact vs. feasibility” analysis tool that I discussed in the last article.
Organizations already tackle complex coordination and collaboration challenges with their business partners. Transforming these interactions through the use of social can take a number of forms but depends upon how companies undertake the same core tasks I talked about when implementing social with employees. First, understand which use cases have the highest value for the organization, second redesign business processes to be optimized for the use of social technology, third provide the support and training needed to drive adoption. Here are four examples, corresponding to the different kinds of partners.
Every company has suppliers — the companies from whom they purchase items needed to run their business. But manufacturing companies have a set of special relationships with suppliers that provide the components or ingredients or raw materials needed to make the products that they sell. Price, availability, quality, and fitness for an intended purpose are the basic elements a procurement organization must take into consideration when contracting with a supplier. But even after the contract has been entered into, managing ongoing supply consistency and quality issues, and taking remedial action when problems arise, is a full time job for a large group of professionals in any large manufacturing company. These employees have to coordinate with quite a few parties - individuals from the business unit that will use the materials, people in the logistics organization, and of course representatives of the supplier as well.
One of the most complicated coordination activities comes when a supplier of a critical input to production has a disruption in their own supply chain, creating a cascade of problems for their customers. In a case like this a social collaboration can be a real life saver for procurement. Coordination can occur between many internal stake holders on the shortage and how to manage alternate supplies in order to avoid disruption in production. In addition, coordination can occur with multiple outside suppliers where another supplier might be able to make up the shortage. Having a central social collaboration platform can speed up these multiparty interactions and also create an audit trail for what happened and why it happened.
One of the most exciting opportunities for companies in utilizing social collaboration is in improving market engagement. Despite the growth of direct marketing and sales, for most companies there will be a lot of reasons to continue to use intermediaries to reach markets. Geographic expertise, specialized niche market knowledge, breadth of distribution, and the value of having your products available in the same places that other products can be purchased are a few of the reasons companies will continue to invest in distributors and channel relationships.
But there is always a range of performance and success levels across different distribution partners. Using social collaboration companies can work with their distribution partners to improve best practices and collaboratively develop new marketing and sales approaches. In situations where different partners are not competitive with one another (non overlapping geographies or market segments) a multi-party collaboration environment can even foster best practice interactions between partners.
Increasingly companies are examining the set of activities they engage in and determining that some of those activities truly provide competitive advantage but others, while necessary, provide no competitive advantage. Geoffrey Moore does a terrific job of outlining this difference between core and context in his book “Dealing with Darwin.” In order to really focus on and invest in innovation (and stay relevant to markets) companies should shed some of these tasks that don’t provide competitive advantage — but it is still critical to manage and connect with service providers who take up these tasks.
A great example of service provider collaboration is in how a company works with the staff that manages and maintains the company’s office buildings. Reception, security, maintenance, and janitorial staff are not creating competitive advantage and this is a common place that companies elect to use an outside service provider. But creating connections between employees and this external staff can have an enormous positive impact on workspace safety, cleanliness, and operations. Simply letting staff engage with maintenance contractors for example can simplify and accelerate dealing with minor and major annoyances — from the bathroom fixture that has stopped working to a dangerous situation in a stairwell.
In some businesses, such as publishing, external partners have long been a part of the value creation process. But technology is rapidly expanding the role of co-creation partners — software on mobile phones is an example in the past decade that has radically transformed a product category — many of us buy a particular phone because of the value we get from the combination of the phone and the partners who have created apps we want to use. Many other business categories will be transformed in the coming years by creating new opportunities for partners to extend the value of a company’s products or services.
Here the role of social collaboration is enormous due to the close working relationship necessary between a company and its co-creation partners. Staying with the example of publishing, companies could be engaging authors in much more depth — sharing ways that the author can collaborate with the publisher on promotions, sharing details of what is working and not working for other similar books, and facilitating marketing opportunities that require the author’s participation to be successful. Books sell in large part based on what the author does to promote the book — so a collaboration platform can have an enormous impact on the publisher’s bottom line if it helps the authors be more productive — and the authors benefit as well.
These are just a few of the use cases that successful companies are already using to build the connected enterprise — utilize social collaboration to improve the way they work with partners. In the next article I’ll talk about how this can be extended to working with customers as well.