InformationWeek

To ensure that their extranets are user-friendly and meet customers' needs, both Cummins and Briggs & Stratton are getting customers involved as they build collaborative networks--something 54% of survey respondents say they do routinely or occasionally. Cummins has formed a customer council that weighs in on all significant upgrades to the site. Briggs & Stratton uses a small team of distributors to evaluate planned upgrades to its extranet, then tests the ideas with a larger group once a working prototype is in place. "In many ways, you're building these tools for your partners, so why not involve them?" says Briggs & Stratton's Aspelin.

Collaboration requires trust and a leap of faith that once customers get a good look inside your business, they'll like what they see. Thomas Nather made that leap when, as senior systems analyst, he helped Penske Logistics develop an extranet through which customers such as home cabinet manufacturer American Woodmark Corp. in Winchester, Va., could access Penske's data to do their own monitoring of the exact comings and goings of the Penske delivery trucks. "You're basically taking your business and wearing it on your sleeve," Nather says. "The customers may see something a little different than you do."

Penske uses an online business-intelligence system from Business Objects SA that lets customers look into Penske's database to see when a truck left a factory, arrived at and left a distribution center, and pulled into a retail store. Nather's team creates the report templates; this keeps customers from having free rein through the database but lets them change fields such as date ranges and vary the depth of analysis from overview reports of a geographic region to the performance of a single distribution center.

Amy Livesay's world revolves around those reports. As American Woodmark's logistic financial analyst, she used to rely on paper and faxes to track how well the company's delivery system was working. As a supplier to home-improvement stores such as Lowe's and Home Depot, American Woodmark is expected to deliver to stores within scheduled two-hour windows. The reports let American Woodmark hold Penske accountable for mistakes that cause it to miss deadlines, but it also illuminates problems in the cabinet-maker's own distribution system. "It may not be Penske's fault; it might be ours," Livesay says. "It made us focus our energy on those areas where we had a problem."

Penske's biggest concern before launching the project was to make sure the data was accurate. That's why the company spent almost two years using the system internally before opening it up to customers. The next step was making sure that the customer contacts--the area managers and regional VPs--knew what data was going out to customers, and were prepared to deal with new, sometimes tougher questions fueled by better data.

Penske has four customers accessing its extranet system, and Nather says it has changed how they view their logistics efforts, since they can get reports at each stop along its route. "It used to be close the door and worry as it goes down the road," he says.

While Penske is giving that information away to help sell shipping, another trucking company has turned information sharing into a revenue source. Schneider National Inc. in Green Bay, Wis., created Schneider Logistics to market logistical data to Schneider's customers over the Internet as part of a larger logistics services offering.

Customers access reports and analyze personalized account information over an extranet that Schneider built using Cognos software. Schneider officials say the insights customers glean from the extranet enable them to identify potential savings. Therefore, they're willing to pay for the information. "This is true executive-level decision-making information," says Bill Braddy, VP/engineering and knowledge services at Schneider Logistics. Users can access reports on transactions and freight and transportation management. They can break down the summaries and analyze more detailed information using a built-in online analytical processing system. For instance, a customer can access an aggregated report on a series of shipments and then drill down to a particular shipment for details on time, cost, distance, and other information that can help identify costly delays or other possible savings. In addition to generating revenue, Schneider Logistics officials say their extranet improves customer acquisition and retention.

Despite its potential, true business collaboration is being adopted only gradually by corporate America. Notwithstanding the onslaught of new tools and services and some notable success stories, most businesses still don't routinely collaborate with customers and suppliers, according to the InformationWeek Research survey. Only half of respondents say they regularly share information with customers, and only 37% routinely share information with suppliers. Participation in more specific collaborative activities such as the development of customized solutions for each partner was even lower.

Part of the problem is often the technology itself. Whirlpool Corp. in Benton Harbor, Mich., has been actively pushing electronic business with its retail-channel customers since 1995, when it formed an internal unit now called eWhirlpool. But company executives say the extent to which they can exchange critical business information with large retailers is limited by the fact that many have built proprietary EDI systems with limited functionality. And those companies--mostly large department stores--make up the top 20% in terms of volume of Whirlpool's customer base, so Whirlpool is trying to sell them on deeper collaboration. "We push them more than they push us to add functionality to the EDI equation," says Dave Cosgrove, Whirlpool's VP for business-to-business operations.

Cosgrove says many of Whirlpool's smaller, less-technologically sophisticated customers are more easily able to take advantage of Whirlpool's XML-based Intranet. "They were never locked into an EDI environment," says Cosgrove, who notes that many midsize companies use relatively open ERP software applications from vendors such as J.D. Edwards and Oracle. "It's easier to dump that information into our own system." Retailers using Whirlpool's XML system can use a Web browser to share order-management information, as well as gather product information. Cosgrove says Whirlpool is savings big bucks by enticing customers to use its intranet to obtain product information and other data instead of dialing in to its call centers. He points to industry research indicating that it's dramatically more expensive to handle transactions through a call center than online.

Companies appear most reluctant to share information with their suppliers. The Franciscan Estates winery, for example, receives information from distributors but doesn't pass production information on to carton manufacturers or its bottling plant. Stern says there's no technological platform to do so, and it would be too difficult and costly for a small player like Franciscan to build one. He's waiting for a broader industry solution. "Part of the problem is that our industry doesn't have a portal where we could share all that stuff," Stern says.