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Companies still have far to go to exploit the benefits of collaboration.

6 Min Read

Paul Hopkins, VP and CIO at Honeywell Transportation & Power Systems, is ready to kick the company's collaboration efforts into a higher gear.

Honeywell Garrett Engine Boosting Systems, a division that makes turbochargers for cars and trucks, already has supply-chain software from Apexon Inc. that gives suppliers visibility into Honeywell's need for parts. But the hardest piece of the supply chain is nailing down turbocharger demand from Honeywell's customers--large automakers such as Ford and Volkswagen. That demand can change weekly, and the result is a whipsaw effect on Honeywell's suppliers. "The people at the back end of the value chain are swung left and right based on what we're projecting we have to build," Hopkins says.
Paul Hopkins --  photo by Ed Carreon
Honeywell measures adoption rates to track the success of collaboration tools, says VP and CIO Hopkins.To reduce that volatility, Honeywell is working with several customers to integrate their systems with Honeywell's for a higher degree of visibility into their turbocharger needs. "Our goal is seamless value-chain connectivity from customer demand to suppliers," Hopkins says. The company also is implementing a Web-based product-design collaboration tool from MatrixOne Inc. that it will use with customers next year. MatrixOne will help Honeywell work more closely with customers as they make changes to engine designs. "We're trying to cut our design cycle in half, from about 18 months to nine months," he says. The fact that Honeywell won't implement the online collaboration tool until next year illustrates an important trend: Companies are still a long way from exploiting the full benefit of IT-enabled collaboration. Only 12% say they're in advanced stages of using IT to support collaborative-business initiatives, and 57% say they're either midway through the process or in the early stages, according to InformationWeek Research's Evolving IT Priorities: 3Q 2002 study. It's clear that many companies want closer, more-effective collaboration with external partners. To move forward, most of the 300 business-technology executives who responded to the survey look for cost savings and better access to information to help them make key business decisions. Most pursue collaborative initiatives: 76% plan to work more closely with customers, 72% will increase efforts to collaborate with business partners, and 61% aim to develop closer ties with suppliers. One drag on the progress of collaboration initiatives is the same stumbling block every IT initiative must overcome: people. Trust is often an issue. Some suppliers worry that sharing too much information about their inventory will reduce their negotiating leverage with customers. In other cases, it's resistance to change. Hopkins agrees that's just human nature, which is why he's building user-adoption metrics into all of Honeywell's collaboration applications. He tracks the metrics weekly, so he knows what the adoption rate is for suppliers, buyers, and planners. By learning who isn't using the system, Hopkins can follow up to determine why. "It's great to put in new systems, but if people aren't using them, you really haven't improved anything," he says. Northwestern Memorial Hospital is building closer ties with suppliers by implementing an integrated PeopleSoft Inc. ERP system. It plans to buy all supplies online by next year. The hospital already has some just-in-time systems in place with surgical-supply vendors and sees opportunities to do more of that as it begins to communicate electronically with all of its suppliers, says Tim Zoph, VP of IS and CIO at the Chicago hospital. The need for rapid turnaround of supplies and a reduction of inventory costs is critical in health care, an industry under pressure to manage and reduce costs. "The supply-chain area is an opportunity for a lot of health-care institutions to become far more disciplined using information technology," Zoph says. Another reason for the slow adoption of business collaboration tools may be that the payoff can be elusive. Fifty-four percent of respondents to the Evolving IT Priorities survey say the tools had a positive effect on revenue in the past year, while 44% say they've had a neutral effect, and 2% say they had a negative effect. But not everyone is sold. Fifteen percent of respondents say they have no intention of using such tools. chartWeb services has been touted as a way to address that problem, by standardizing interfaces to different systems instead of forcing companies to create a proprietary interface for each app. Some 56% of respondents say Web services is on their planned projects list for this year. Rapid growth can prompt the need for faster information exchange. That's what happened with Chick-Fil-A Inc. During the past two years, the Atlanta restaurant chain added about 50 locations annually. This year, it plans to add 77 locations, and that number will continue to increase each year through 2008, says Trent Gilley, project design supervisor. The company began using Autodesk Inc.'s Buzzsaw app this spring to collaborate online with architects and general contractors. Previously, building design information was sent via E-mail or delivery service. The system was far from ideal. Chick-Fil-A would make a list of changes it wanted, then one architectural firm would incorporate those changes and ship CDs with the new drawings to the other architects and contractors. By collaborating with architects online, Chick-Fil-A can tweak drawings on the fly and instantly get that information to builders. "Until now, we've been able to handle it the conventional way," Gilley says. "But as we bring on new partners to do more stores, it's tough to get them all the information they need at one time." As companies look for faster ways to share information with partners, there's room for improvement with online collaboration. For the past two years, pharmaceutical company Aventis has used eRoom Inc.'s collaborative software to bring people from several biotech companies together online in drug project teams. Aventis plans to work with more pharmaceutical companies and academic partners to expand its external collaboration, but Peter Loupos, Aventis' VP for drug innovation approval and information solutions, wants a more flexible tool. "The current model is extremely confining because you're building a specific secure environment," Loupos says. "The whole mind-set is about firewalls." That becomes a problem when Aventis wants to provide partners with specific information in a database without giving them access to the entire database. The alternative is to extract the data and send it via E-mail or post it in the collaboration environment. That's not particularly beneficial in research and development, where Aventis strives for real-time access to all information. "Basically, you're creating a lot of overhead and duplication," Loupos says. He'd like to see a personalized security model that lets partners access only the database information that's relevant to them. It's clear that the technology for some forms of online collaboration has yet to reach its full potential. But that's not deterring companies from taking on such projects. They've recognized that closer bonds with suppliers and customers have become a necessity, and they've seen evidence that online collaboration provides a powerful tool to make that a reality. Photo of Paul Hopkins by Ed Carreon

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