Collaboration fuels the value chain

collaboration in value chain

Deloitte has released an extensive report Collaborative economy (2014). According to the report “Collaboration is employees communicating and working together, building on each others’ ideas to produce something new or do something differently.” The main findings of the report state, that in Australia, the collaborative economy is worth 46 billion AUD. The report argues that the most effective drivers of collaboration are technology tools. As the report has been prepared for Google, it is no wonder technology tools are limited to video conferencing and document management.

I had to skim through the report twice to believe it was all about intra-organisational issues. To put it simply, workmates talk to each other. Seriously? With all do respect, but are the waves of the networked economy yet to reach the shores of Australia? Ever since early 1990s industrial companies have focused on their core competencies and outsourced other parts of their value chain. This strategic transformation has created the basis for a globally networked economy. Nothing new to it, right?

I would rather see the concept of collaboration taken into the context of cross-company cooperation. Long-term partnerships seek to add value to the mutual business relationship by expanding the business. The role of trust, commitment and mutual learning are of key essential in managing and developing business relationships. Moreover, collaboration in value chain of buyer-seller-relationships is not merely about talking to the other party. In the most advanced relationships, customers and suppliers co-work intensively to e.g. improve productivity and manufacturability, find new materials, shorten the lead times, and search for win-win-possibilities in cutting costs. This requires IT-solutions document management (of course), but also an open platform for idea generation and discussion and an ad hoc reporting system alongside with business-related information management.

The Deloitte report suggests five steps for Australian businesses. Reflecting on these five steps, here are my elaborations for cross-company collaboration in value chain:

  1. Make collaboration a strategic business focus – Spot on! Do it across company borders in your SCM or CRM.
  2. Invest in the right technology and tools for collaboration – Spot on! The right being an agile, cost-efficient, independent, and common platform.
  3. Changing culture with the right incentives – Spot on! The transformation from rigid, company-specific IT-solutions to open platforms may be fuelled by a possibility to make a difference with a user-friendly professional system.
  4. A tailored implementation – Spot on! But not a time spent on tailor-made solutions. Just simply pick the apps you want to use.
  5. Ensuring effective collaboration – Spot on! Invite all your partners to join in. The more you have, the more effective your cross-company collaboration in value chain is.

Gigantic conglomerates Google and Deloitte stress the importance of discussion within an organisation. I would like to stress the importance of cross-company information sharing and collaboration in value chain. These giants suggest company-specific IT-solutions resulting in “my system, your system” thinking. I prefer an agile, transparent and common solution which puts each company in the centre of its own business network. The pair builds barriers between companies. We like to hold hands with our partners.

The blog post was originally published in the Jakamo Official Blog on 11 February 2015.