A Gartner Group Inc. analyst touted collaborative commerce as the Holy Grail of the future for U.S. companies at a conference in New York Monday. But he and several users voiced concerns that the development of transparent supply chains is still little more than a grand technical quest with no end in sight.
Gartner analyst Bruce Bond, speaking at the Internet & E-Business Conference & Exposition, predicted that the ability to share supply-chain information with business partners will lead to faster revenue growth for companies. The Internet will be never be a conduit for growing traditional businesses, he argued. But, Bond said, it can be used to become more efficient and to improve product development through collaboration with suppliers and customers.
Nonetheless, he raised a red flag for any company that expects to see fast returns from an investment in an interoperable and open IT backbone aimed at making supply chain collaboration possible.
“We don’t have the technological standards to operate [collaboratively] on a global level,” Bond said. There are some “kludgy ways to make this stuff interoperate,” but software vendors have yet to offer collaborative tools that would provide users with universal supply chain transparency out of the box, he added.
In particular, Bond faulted enterprise resource planning (ERP) applications for being “monolithic” and “not designed for sharing.” And fellow Gartner analyst Suresh Gunasekaran touched upon another core problem, saying many companies are worried that collaboration would let suppliers walk off with their internal business process expertise.
Michelle Deroo, director of e-commerce at Comark Inc. in Bloomingdale, Ill., said the computer reseller probably wouldn’t be an early adopter of collaborative commerce technology. “To have a full collaborative environment [is] a hard sell for me,” said Deroo at the conference, which is being co-sponsored by Stamford, Conn.-based Gartner.
“Right now, what I’m going to lose in terms of visibility and exposing my information to potential competitors is greater than what I [would] gain on the collaboration side,” Deroo said. Technology vendors themselves don’t seem very willing to collaborate on delivering software that gives users a significant return on investment, she added.
The lack of clear choices for collaborative software that Bond alluded to is also a problem, according to Deroo. “There are some companies that are going to find they invested tons of money in the wrong technology,” she said.
Bond estimated that tangible benefits from preparing internal systems for collaborative commerce wouldn’t be realized by most users for another three years. But he said companies that do take the collaborative step would eventually enjoy competitive advantages over rivals that don’t make their supply chains transparent.
And some companies are already putting collaborative business models in place. For example, Mark Peden, vice president of IT at Lockheed Martin Aeronautics Co., said at an aerospace industry B2B conference last month that collaboration is key to the Fort Worth, Texas, company’s efforts to win the U.S. government’s Joint Strike Fighter contract.
Lockheed Martin Aeronautics, BAE Systems Inc. and Northrop Grumman Co. have been using shared applications, common document management systems and collaborative online workspaces for their engineers to compete for the contract, according to Peden. “Quite frankly, using the technology of 10 years ago, we wouldn’t be able to do this,” he said.
When asked about the return on investment and supply-chain savings that are expected to result from the use of collaborative technology, Peden offered a broader view. “In some cases, it’s not a matter of how much you want to save, but whether or not you want to be in business,” he said.