Collaboration services such as teamware, instant messaging, and Web conferencing have the potential to generate vast operational efficiencies for most businesses by driving down coordination costs. However, to reap these benefits, organizations must alter the way they do business, creating an environment that optimizes collaboration services to link people, processes, and information.
META Trend: Collaboration is emerging as a key enabler for lowering process coordination costs and gaining competitive differential. Through 2004, collaboration vendors will supply components (e.g., instant messaging, teamware, Web conferencing) that can be contextually embedded within business applications and enterprise portals. By 2007, XML and Web service standards will enable "contextual collaboration" strategies that span customers, employees, and partners.
One of the major catalysts for organizational efficiencies in the middle part of this decade will be the meshing of rich collaboration services - e-mail, calendars, teamware, Web conferencing, presence information, and instant messaging (IM) - with business activities. Through judicious pairing of collaboration services with business processes, organizations will be able to reduce coordination costs - enabling extended-enterprise users to negotiate, clarify, troubleshoot, and brainstorm - all within the context of business activities. For organizations, there is one basic technical and one basic organizational challenge in realizing the benefits of collaboration:
- Procurement of collaboration technology and services is not well managed and is introduced without centralized guidance (e.g., business units subscribing to Web conferencing providers; end users using public IM networks; departments using teamware).
- Effective collaboration requires behavior change on the part of users as well as examination of information sharing and process structures. Collaboration strategies are less successful when not aligned with human capital management (HCM; e.g., rewards, incentives) and knowledge management efforts to improve performance and innovation.
Left uncontrolled, within three years most organizations will have multiple overlapping and conflicting collaboration infrastructures, putting significant stress on end users (who must learn multiple products), help desk and operations personnel (who will maintain and support multiple products), as well as architects and developers (who will struggle with positioning diverse products). We have already seen this happen at enterprises that have aggressively deployed collaboration tools. To prevent IT anarchy, we recommend organizations develop a long-term strategy for making collaboration investments. At the same time, organizations must ensure that collaboration is seen as an inherent corporate value (e.g., to improve process performance rather than individual productivity) and is officially encouraged and rewarded from the top down (e.g., HCM strategies). In addition, companies must ensure that coordinated collaboration services are extended to endeavors such as e-learning and portals. Therefore, organizations have to include a collaboration carrot (creating operational efficiencies via integration with basic business processes) and a collaboration stick (centralized governance) within planning efforts. The first step in developing a strategic approach is to assess the maturity of the organization’s approach to collaboration. Our research indicates that enterprises are in one of five general categories (see Figure 1
), ranging from a workgroup focus with little attention paid to the enterprise value of collaboration, to pervasive understanding and use of collaboration throughout the extended enterprise. This maturity exercise has several benefits: 1) enterprises can gauge how they rank compared to competitors and other Global 2000 (G2000) organizations in collaboration deployments; and 2) companies gain an understanding of the path and sequence of steps needed to progress to collaboration maturity (e.g., identify investments and remediate gaps):
Business Impact: Properly implemented collaboration services can create vast efficiencies by minimizing coordination costs inherent in almost any business process by enabling users to interact directly when circumstances warrant.
- Workgroup: In this case, organizations are relying on basic collaboration software likely
implemented in the late 1990s - primarily e-mail and calendaring, with some use of document and discussion databases. Recognition of the value of collaboration is limited to the view that it improves personal and workgroup productivity. Little collaboration exists outside immediate departments, and there are no structures to include collaboration as part of business processes. Professional development and rewards/incentives to create a more team-centric environment are absent. Enterprises at this maturity level have yet to introduce second-generation collaboration technology due to perceived lack of demand or institutional stubbornness. We estimate that about 15% of G2000 organizations fall into this category.
- Business unit: This level is characterized by users recognizing the value of second-generation collaboration services, typically across multiple departments within a business unit (e.g., division), and procuring services such as Web conferencing (from a hosted supplier), IM (from a public network), and teamware (run either on premises or via a hosted supplier). Central IT groups are not engaged with decision making on collaboration tools. Although business units reap benefits, enterprise benefits are minimal because overall investments are not optimized and enterprise negotiating is not leveraged. Collaboration across departments is impeded due to technology barriers, resulting in automaton of localized tasks and functions rather than improving enterprise process coordination. In addition, the true value of collaboration is not realized because there is no structural change to encourage a collaborative culture. About 40% of G2000 companies are at this level.
- Enterprise: In this level, centralized IT groups become more proactive (e.g., management mandates to reduce IT costs/complexity or enterprise architecture efforts), resulting in formal governance over collaboration technology. Organizations here typically standardize on a common set of tools and implement common user policies for collaboration services. However, external-facing deployments of collaboration solutions are still treated separately, with the focus on standardizing internal applications and infrastructure services rather than on processes and extended process across business boundaries. In the external case, collaboration tools (e.g., e-mail, chat, co-browsing, Web conferencing) are deployed to facilitate contact with customers (e.g., within customer interaction centers) or business partners. As organizations mature within this level, collaboration infrastructure begins to become integrated within knowledge worker infrastructure services (e.g., content, learning, portals) and leverages core infrastructure services (e.g., directory, databases) and application development tools. We estimate that 40% of G2000 firms are in the early stage of this level.
- Process-centric: Organizations at this level view collaboration as an integral component within processes that span partners, employees, customers, and suppliers. IT groups work closely with business analysts to identify communication/coordination gaps in business processes. Upon identification of such gaps, collaboration services are blended into the business process itself (what we call contextual collaboration). Remaining walls between external and internal collaboration solutions are removed, enabling consistent services across B2E, B2C, and B2E domains. Reuse of collaboration services across diverse endeavors enables enterprisewide process efficiencies with lower costs and reduced IT complexity. Systematic mapping of collaboration investments against long-term enterprise goals is a characteristic of organizations at this level, as is the establishment of a methodology for determining whether to deploy collaboration services outside the boundaries of the strategic plan (e.g., for enterprise applications that have collaboration embedded within their core offering, tactical use of public IM services while strategic suppliers reach maturity). We believe fewer than 5% of G2000 organizations are at this stage.
- Workplace-centric: Enterprises at this level view collaboration as a catalyst for organizational development and productivity, making it a critical underpinning to knowledge management and HCM programs. The focus here is on people (e.g., next-generation workplace, expertise automation, virtualization of teams and facilities via anytime/anywhere connectivity). Collaboration software tools are relatively mature. Trends in hardware form factors and devices (e.g., tablets) and networking (Wi-Fi and IP telephony) become the essential transformation technology elements included within collaboration strategies to improve performance and innovation levels. Best-practice organizations include explicit review requirements for leadership, teaming, community-building, and expertise contributions. Maturation here also includes collaboration methods and practices that exploit communities of practices to improve business processes. We believe no G2000 company is at this stage.
Bottom Line: To maximize the value of collaboration services, organizations must establish a long-term strategic investment and deployment strategy. A maturity model is a first step toward understanding where an enterprise stands in its ability to exploit collaboration.
META Group originally published this article on 16 October 2003.