Research

Podcast: Innovation and challenges implementing collaborative environments

Increasingly companies are viewing technology not just as a way to get things done but also as a way to move forward. The Center for Advancing Business Through Information Technology’s annual symposium on April 24 and 25 will focus on the opportunities available through enhanced collaboration to re-engineer supply change processes, transform customer care management, and employ a social network for knowledge management. Center Director and Professor Julie Smith David discusses collaborative environments and the challenges businesses face as they try to implement them into their organizations.

2008-04-15

Increasingly, companies are viewing technology not just as a way to get things done but also as a way to move forward. The Center for Advancing Business Through Information Technology’s annual symposium on April 24 and 25 will focus on the opportunities available through enhanced collaboration to re-engineer supply change processes, transform customer care management, and employ a social network for knowledge management.

Center Director and Professor Julie Smith David discusses collaborative environments and the challenges businesses face as they try to implement them into their organizations.

Transcript:

Knowledge: Increasingly, companies are viewing technology not just as a way to get things done, but also as a way to move forward. The Center for Advancing Business through Information Technology or CABIT is a research center house at the W. P. Carey School of Business. Its mission is to foster collaboration between industry and academics to help identify, implement and evaluate technology innovations that can optimize from performance.

CABIT's Annual Symposium on April 24th and April 25th will focus on the opportunities available through enhanced collaboration, to reengineer supply chain processes, transform customer relationship management and deploy a social network to improve knowledge management efforts. Julie Smith David is the Director of the Center for Advancing Business through Information Technology.

In this edition of Knowledge at W. P. Carey, David discusses collaborative environments and the challenges business face as they try to institute them into their organizations. You are focusing on the relationship between collaboration and innovation, can you explain the links and why they are critical to today's organizations?

Julie Smith David: We have all noticed that over time organizations are obviously becoming more global and they are interacting with many more customers, many more suppliers. And the interesting thing that is coming out of that is that supply chains are changing radically and actually the way firms interact with each other is changing.

And although, we have initially recognized this for streamlining operations, making efficiencies, taking advantage of different cost structures in different areas of the world, what we are now seeing is that there are also incredibly innovative changes that are coming in the marketplace, which influence either processes or products, relationships that are really very different.

So what we are finding is that organizations need to have an understanding of the integration between them and their trading partners. They need to understand how to collaborate with their trading partners, but most importantly, they really to understand how they are going to be able to capitalize on these relationships to dream up products and services that they never imagined before. So I think it is very interesting.

We can go back and look at some of the books that have been written over the last 10 years and get an understanding of this phenomenon as it unfolds. Hagel and Brown wrote a really groundbreaking book called "The Only Sustainable Edge" and in that book they talked about organizations moving to become process networks. And a process network is a group of organizations who have loose structural affiliations, but are very easily able to collaborate together in order to solve problems.

And so they really hinged on globalization, a lot of collaboration and interaction and then focusing on one's own core competencies, because you can trust your trading partners to do the other activities. I found that book really, really interesting because it really changed the way that I looked at business. After that, there have been a couple of other books that have sparked similar transformations in my thoughts.

I think that Wikinomics by Dan Tapscott and Anthony Williams did a great job of building on what Hagel and Brown did and then saying there is actually a whole new category of technologies, which are being called Web 2.0 technologies that can actually facilitate the collaboration. So these are the technologies that are enabling the globalization, the communication between organizations and sparking a lot more of an environment in which individuals can contribute to the whole supply chain rather than just working on their own.

And right now I am currently in the midst of reading Daniel Pink's new book called "The Whole New Mind." And that's really making me stop and pause and re-examine everything about education and collaboration and business. He has really structured all of his thinking that in the information age we used our left brains in order to become very analytical, very data driven, very precise logical thinking and we have been very successful at that.

But he argues that now that there is much more abundance in the world, now that Asia has taken a much stronger position, we actually have to become much more creative. We have to be able to be able to design, to coordinate, we have to be able to really work together to put different products or different processes, different services together to create something that no one had imagined before.

So I am fascinated with his work because it is saying that we can't just be left brained, we have to activate our right brain. But in my mind, it also is telling me that I need to surround myself with people who are both analytical thinkers and who are very creative types because together we ought to be able to spark a lot more innovation than if we just continue to follow down the very straight and narrow left-brain path.

So I think all of these things together say that businesses are working differently, there is a new category of technologies that are enabling these differences and in fact we as individuals have to understand those changes and work on making ourselves more adaptable, more influential in this large global collaborative creative society that is actually emerging right now.

Knowledge: Could you give us some examples of companies that illustrate this trend?

Smith David: I don't want to seem as if these trends are something that is completely new and no one has been thinking about them. I'd like to start I guess with Li & Fung, who have over 100 years experience with helping organizations with global supply chain issues. Their real core competency is that they have a huge network of organizations, who each can play an individual role in a production supply chain.

And so they have customers all over the world, usually retail firms or distribution firms who come to them and say, we have a product that we need to be produced, but we don't know how to get it produced. Li & Fung's role is to identify who the individual contributors will be and then to architect and direct the process to actually get the goods delivered.

So for example, they may be working with a retail company to produce some high-end fashion clothing and they may actually call upon 15 or 20 different organizations to play a very particular role in that production process. And the goods themselves may travel to four or five different countries before they come to the actual customers retail location.

So I think they are very good at this collaboration and as a result, organizations can come up with a new design, their customer organizations can come up with a new design and that design can actually be executed because of the collaboration between all of the producers. So that's a company with a very long history of bringing people together and being able to deliver on it.

We are seeing a wide range of new organizations emerge that are looking at that same sort of idea, but taking it steps further and further because they are able to capitalize on those Web 2.0 technologies that I mentioned. So frequently when there are articles on Web 2.0, the company that is featured is called Threadless. Threadless is a company that produces t-shirts and sells them to individual consumers.

Now that doesn't sound very interesting, but what they have done a great job at is what is called crowd sourcing. And what crowd sourcing means is that individuals can come to that website and they could look at potential t-shirt designs and they can vote on which of those t-shirt designs do they like and how much do they like them. So Threadless feeds this website with designs that come from individual designers from all over the world.

So they have two different communities that interact at their website. The designers submit the designs and then potential customers vote on those designs. Threadless periodically stops the voting and identifies which t-shirts have the greatest number of votes and then they produce that t-shirt in limited quantities. What this does is it allows Threadless to be incredibly efficient. They have great customer market information and they are able to use that information to minimize the amount of inventory that they have to carry.

They only produce when they know that they are going to be able to sell it. And they also are providing an incredible platform for designers, graphic designers have a very difficult time building up a portfolio of their work and at Threadless they not only are able to display their design ideas, they are able to collect feedback on it.

And in fact, there are little community areas within Threadless where fans of individual designers can come and post comments, interact with the designer and the designer can show multiple versions of their designs, describe what their design philosophies are, really build a relationship between that end consumer and the individual designer. So I think they do a great job along the way and we are seeing other companies with that same approach that maybe are less commonly heard of. But there is a company for example called Elance, it is an online market for services.

So if an individual from anywhere in the world is interested in getting graphic design services, accounting services and a number of other types of services, they can go to Elance and they can post a request for a proposal and service providers from all over the world can bid on it. Now that seems pretty risky to most companies to say: "well why would I go out and let anybody from anywhere around the world take my service job."

Well Elance is sort of like Amazon, they collect information and feedback about each of the providers that they have, so if there is a graphic artist for example who has done work through Elance, their prior customers will be able to provide reviews, actually to do performance evaluations on those designers and as a potential customer of them in the future, he will rely a lot on that work to get value. There is a company in the Valley called Bulbstorm, which is just getting started and they are planning on creating an online marketplace for the exchange of ideas.

It is really going to be an interesting concept, where you have got knowledge workers, people with incredible intellectual property able to help each other worldwide to solve their problems. I think that is going to be a fantastic example of the relationship between innovation and collaboration. You are no longer going to be tied to the people that you know now; you are going to be able to be reaching out worldwide.

Knowledge: So what types of collaboration are you seeing have a positive impact on organizations?

Smith David: Well, we are seeing it really in three different areas in general. We are seeing a lot of work being done with the customer-facing interaction. How do you use these collaborative technologies to get to know your customer better, to understand what their wants are, to understand what their abilities are and then to be able to react to it. So the example of Threadless is probably a good example of that. We are also seeing the same collaborative technologies being applied within organizations.

I have read a number of studies that are wrestling with: we'd like to know what all of the knowledge is of our senior employees, those who are nearing the age of retirement, but we don't understand what they do on a daily basis, we don't understand what their jobs entail. And you could use actually Web 2.0 technologies to capture their day-to-day activities and to be able to start sharing and collaborating not just within one office, but with your employees across the world. And finally, we see collaboration opportunities with your suppliers.

So Elance is a good example of where you are trying to identify potential suppliers, work with them in a virtual relationship in order to be able to deliver services. But it won't just be suppliers; it will be a number of other external constituencies. So a better understanding with regulations, the ability to collect data outside on overall macroeconomic trends and use that within your organization, just kind of a broad external focus to collaboration space.

Knowledge: Speaking of collaboration, what is collaborative software?

Smith David: There are a number of different tools that are being developed, which are being called Web 2.0. We have done a lot of work in our research center to try to even define what Web 2.0 is as have scholars from all over the country. But the typical types of applications that are embedded in a collaboration platform would include blogs, being able to do online journals to collect your daily activities, wikis which are platforms that allow people to work together to write documents, whether they are textual documents or whether they are spreadsheets, but it is a collaborative tool for creating new documents.

There are recommendation sites, where you are able to vote for different content or different qualities. There are virtual worlds. So the Second Life system where you can go in and create your own avatar and interact with others in the virtual world is a good example. All of those are kind of typical capabilities that you would see if you are establishing a collaborative network.

Knowledge: So what are the major challenges to actually delivering these collaborative environments?

Smith David: Boy, I think there are an awful lot of challenges out there. We are working on several projects with different organizations to try and help them create their collaborative environment, so let me talk about one or two of those. We are working with the American Accounting Association to help them create collaborative platform for all of their members. Now, this is a nonprofit organization of 7,000 accounting faculty worldwide. They are trying to build a collaboration network in order to provide better services to their members and in order to really enhance the overall educational community.

So right now the accounting faculty is isolated in individual universities, but they may want to reach out to others who are teaching the same topic or researching the same issue in order to be able to understand, globally, what is the current state of the accounting reality as we know it. So we have been working with them to crate a collaborative network. And the first challenge that we faced was that there isn't currently a methodology to help guide you through how do you create a social network. I found that fascinating.

I thought that some of the other methodologies that could be used for software selection or business process analysis would work, but they don't seem to work because the focus really has to shift away from how do you effectively do a repetitive process, to how do you enable collaboration and that nature of collaboration is by definition going to evolve as the partnership continues.

So we had to develop a methodology that would allow us to first identify what were the strategic opportunities for the American Accounting Association members, what were the ways that they would like to collaborate. And then given those ways they would like to collaborate, we then set out to say, well which Web 2.0 technologies, which of those capabilities are out there that would allow them to meet their objectives, so let me give you an example.

I mentioned that teachers might want to collaborate with other teachers in one specific topic and so we needed to think about what would teachers helping teachers look like. We identified: well they needed to share files. It might be that they need to be able to share syllabi. They need to be able to share classroom assignments. They need to be able to share guest speaker names and contact information. There is a wide range of things.

But they would need some sort of an online virtual community, which could store all of that data, but more importantly allow other academics to be able to post responses to anything that has been posted. So if I post an activity that I use in my class, then other people from around the world can use that activity, they may enhance it, they may change it, but then they can post comments back about what worked, what didn't work and together we can move forward to create the best applications that we can.

So we did that analysis for each of the stakeholder partnerships that American Accounting Association had identified. After that, then we went out and identified who were all of the infrastructure players, so who are all of the companies that can provide a social networking platform that we could customize to meet the American Accounting Association's needs. Well, that is where we identified many more challenges to delivering these collaborative environments.

First off, those vendors are all very small, very young and are apparently very risky because of their size and their age. So it was difficult for us to even identify who were the potential vendors because the common names that you think of just don't have good products in this space yet, so that was a huge risk. The other risk we were facing is we are in the midst of building out the social networking platform, but we have no idea if once we built it, there will be enough faculty who come and actually use it.

One of the key success factors that is being discovered is you need to have a sufficient number of active users to keep the passive users coming back. One statistic I saw said that about 90% of the people who go to social networks are what they call "lurkers." They are people who go and enjoy reading materials, but they don't want to contribute. So we are going to have to make sure out of our 7000, we pick some really active vocal users, so that this huge infrastructure investment we are making will become valuable.

The other risk that we saw, the other challenge that we faced was that when we were doing all of the platform evaluations, because these companies are new, they don't have platforms that are well established or that are very broad in their feature set. So one vendor may be very strong in an area, let's say they are very strong because they have wikis and blogs, two of the technologies that I mentioned, but they don't have the ability to set up a friends' network, like you'd see in Facebook.

Well, there may another platform that is really good at identifying sub-networks of members, but they don't have the capability to share files. So we are really struggling with because there is not a standard definition of what is Web 2.0. And because there is not a definitive broad platform of all of the collaboration capabilities, we are having to do some trade-offs on which features are the most important or the least important.

Knowledge: Is there anything else you would like to add?

Smith David: Well, I'd just like to say that we are really excited at looking at all of these emerging issues. We believe that they are really important to an organization strategy, but they are really going to cost a lot of discomfort along the way. There are many challenges that organizations are going to face as they become more open to sharing information with organizations outside of their control. And that is going to provide both the opportunities for incredible innovation, but also opportunities for incredible risks. So managing those risks is going to be very interesting.

Innovation Managing IT Faculty