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6/17/2010
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Why IT Needs To Push Data Sharing Efforts

Company culture as well as technology can work against data sharing initiatives.

As IT organizations change their focus from cost cutting to growth, one of the single best things they can do for their businesses is enable effective data sharing. Sounds like a no-brainer, right? The right data sharing can open new markets, win new customers, improve relationships with existing customers, and expedite jobs from materials delivery to inventory management to payment reconciliation.

Yet data sharing, particularly automated systems that give your external business partners access to your data when they want it, are not ubiquitous or easy, and the level of data sharing of any kind is surprisingly low at points before and after the sale, our exclusive research finds. Your colleagues resist data sharing, but they're not the only problem. IT is way too slow at creating such integrations--taking months, not days, to build new links, in many cases.

FedEx and UPS make package tracking so simple, it's easy to take that capability for granted. Yet only half of companies even share order status with customers. Meanwhile, in the most sophisticated supply chains, companies share data as deep as inventory levels with key customers, such as manufacturers looking to coordinate just-in-time deliveries. With vendors, electronic invoicing is the simplest level of sharing. On the other end of the spectrum are companies that share point-of-sale data with vendors, something fewer than one in six companies in our survey do.

It's such an important trend that IBM in late May said it would pay $1.4 billion for Sterling Commerce, an integration software and services company owned by AT&T. While the deal didn't attract a lot of attention, it was IBM's largest acquisition in three years. The appeal to IBM is straightforward: Data sharing and integration projects always require some custom integration and ongoing maintenance of the links. Therein is the opportunity for IBM's consulting and services army, and the challenge for most IT organizations. But the problems go well beyond creating and maintaining data integration links. Our survey of 281 IT professionals finds that while technology is part of the problem, organizational resistance is a bigger obstacle.

Almost every company we surveyed shares data with someone. Most (74%) share data with customers, while 62% share data with suppliers. Almost half of respondents are required to share data with other third parties, mostly government agencies. Yet there's wide disparity in data sharing strategies: A fourth consider it a top IT priority, about a third build connections on request, while 22% admit they resist data sharing to some extent.

When it comes to what frustrates data sharing efforts, the classic culprit, budget limitations, tops the list of survey respondents, followed by complaints about the multiple sets of tools and the care and feeding required by legacy connections. However, we suspect that it goes deeper than any technology.

Sales, manufacturing, or merchandising tend to drive the decision to build new data sharing relationships with suppliers and customers. "They're usually the starting point and are a major factor in getting a program expanded," says Jim Frome, chief strategy officer at EDI software-as-a-service provider SPS Commerce. That trio historically doesn't have the greatest relationship with IT in many organizations, Frome says. Yet IT really needs to have an active role in educating the different teams about capabilities and options available both internally and externally.

InformationWeek:June 21, 2010 Issue To read the rest of the article, download a free PDF of InformationWeek magazine
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