CIO Tony Aveta is racing to beat time. His company, PSINet, is in a hurry to become the world's largest provider of corporate Internet services. In each of the past three years, the 10-year-old company has doubled revenues, half through acquisition. Said revenues are approaching $500 million-two-thirds of which is generated outside the United States. It has 73,000 business customers and a foothold in the world's 22 largest telecom markets. But if Aveta doesn't scramble, he'll be eating the dust of bigger competitors like MCI WorldCom and Qwest Communications International "We need infrastructure and assets spanning the globe," he says.
Aveta faces a double challenge: He must support the global strategy without breaking the Bank. His capital assets are everywhere. SWAT teams around the world look for new acquisitions and must work with the home office. Technical people worldwide work in virtual teams to take advantage of the 24-hour clock. If that isn't enough, the competitive and technological landscape is constantly changing. "Three months is a lifetime," Aveta says. As a result of these dynamics, he confesses, "I am driven toward finding collaborative technologies." E-mail, chat, white boards, videoconferencing, PC conferencing, video streaming-he's tried them all.
Welcome to the 21st century, the Age of Collaboration. Aveta arrived ahead of most; others better arrive soon or they might not get there at all. Economic, social, cultural and technological forces are driving all companies toward greater collaboration among employees and with customers, suppliers and partners. For that, they need collaboration technologies, which help people work in pairs, in teams, or entire communities in real-time or on a schedule that suits each user.
Why collaborate? The age of the lonely corporate hero is over-experts estimate the typical manager spends four-fifths of the day communicating with others. Tasks are so complex and product cycles are so short that no one can do everything on their own. Workforces are geographically dispersed. And computers have improved personal productivity about as much as they can, which means technology's next great contribution will come from helping people work together. The Internet, unlike earlier technologies, actually makes collaboration affordable. "The environment is right for collaboration if you can find technologies that add value to the way people do business," says Aveta.
Share and Share Alike
Companies are adopting more collaborative technologies than ever, but they don't take full advantage of them, market analysts say. Ian Campbell, vice president of collaborative applications at International Data in Framingham, Mass. (a sister company to CIO Communications ), notes that companies install Lotus Notes, Microsoft Exchange and other groupware products as they evolve beyond e-mail, the most basic collaboration tool on a computer. "But they struggle with what to do with them," he says. "They need to change the working habits of the employees. They need to foster the sharing environment."
Before an organisation can put those tools to use, it must first deal with the people issues. Culture comes first, technology comes second. Reverse them and you're in trouble. "Trust, teams and technology in that order," says Carol Anne Ogdin, founder of Deep Woods Technology , a Santa Clara, Calif.-based consulting firm that focuses on the human aspects of collaborative technologies. During the 10 years that she has worked with clients, Ogdin has seen many companies throw technology at what were people problems. "IT people have a touching faith in technology but don't understand what managers do or how people work." She does, however, see a few signs of change.
An example is Steven T. Miller, manager of collaborative computing at DuPont in Wilmington, Del., one of Ogdin's clients. "My job isn't to roll out Lotus Notes," says Miller, who in fact is rolling out Notes. "My job is to put in place an infrastructure upon which DuPont can transform itself from a petrochemical company to a biotech company." Miller knows that Notes won't solve anything if the company doesn't encourage people to share. (More about DuPont later.) Unless you attend 12-step meetings, chances are pretty good that the last time anyone genuinely expected you to share was in kindergarten. "Trust is the big issue," says David Coleman, managing director of Collaborative Strategies LLC, a San Francisco-based consulting company. "You're not going to share with someone you don't trust." US companies have a long way to go, he adds. "We're a cowboy culture. You strap on the guns and go fix it. We are not a culture of collaboration."
Companies must motivate people to share. Most corporate compensation schemes, however, reward individual superstars. Coleman says smart companies-such as Cisco Systems , Hewlett-Packard and others-are changing bonus plans and performance ratings to reward team achievements. It's no surprise Cisco has become the poster child for collaboration among employees and with customers and suppliers. Coleman advises: "You either collaborate or die."
A company like PSINet has an advantage over more established companies. It is young, full of ideas and not yet set in its corporate ways. Its business is the Internet, which makes it predisposed to adopt Web-based collaboration technologies. With its flurry of activity around the globe, teamwork is the only way to survive. The young, techie employees have scant trouble adopting collaboration technologies. E-mail, for example, is so popular that one of Aveta's big challenges is dealing with the volume. Human resistance is the least of his problems.
Others should be so lucky. In the following vignettes, you'll meet some companies that are trying to collaborate better with customers, among employees and with business partners. Their stories illustrate the recurring theme one hears from experts: Collaboration is not about technology; it's about culture and training.
Collaborating with Consumers
There's a higher potential for success when the new collaborative technology grows out of an existing culture. Lands' End , the catalog retailer based in Dodgeville, Wis., launched two applications last year to help customers on its Web site. One of them, Lands' End Live, takes advantage of the hundreds of highly trained customer service representatives who know the products, the Web site and understand customers, says Jeremy Hauser, a research and development analyst for electronic commerce at the company.
Lands' End Live allows site visitors to ask for personal help over the Web from a customer service representative. The other application, Shop With a Friend, allows two people to shop together on the site. Both use technology from WebLine Communications , a Burlington, Mass., developer recently acquired by Cis WebLine built Shop With a Friend for Lands' End, which had exclusive use of the application through the end of 1999.
The two applications work in a similar way. The technology synchronizes the browsers so that two users can navigate the site together, pointing to products of interest. The two parties can talk on the telephone while they do this or they can use a chat application. For example, Shop With a Friend lets two sisters in different states shop together for their parents.
When the company launched Lands' End Live, Hauser figured most people would use the telephone because the shopper can request a call back from a customer representative at no cost. Instead, four of five Lands' End Live users prefer chat. The company has not tracked usage for Shop With a Friend, but Hauser guesses chat is more popular there too. He says several thousand customers use the applications.
David Marshak, an analyst at the Patricia Seybold Group in Boston, expects to see more chat-based tools like the Lands' End applications. He says tools for team brainstorming and problem solving must be simple and usable in real-time. Hauser expects to see more retailers adopt chat, and he offers a caveat for those without a customer service culture: "We had the people; they are trained; and helping customers is what they like to do. Making the move to online collaboration wasn't that difficult to do."
Collaborating with Suppliers
Sometimes the hurdle isn't the end user or the CEO but managers and executives with a vested interest in the status quo. Adaptec, a maker of SCSI boards and other data transfer hardware and software, wanted better collaboration with its suppliers. The goal was to create a virtual factory that would let Adaptec, its semiconductor foundry and other supplier-partners reduce the time it took to make the custom integrated circuits, which Adaptec designs for its products.
Adaptec and its partners, including Taiwan Semiconductor Manufacturing (TSMC), adopted software from Redwood Shores, Calif.-based Extricity Software It allows partners to create and manage shared business processes over the Internet no matter what the system, file format or business rules, with little or no customization of either system.
As one result, Adaptec engineers can monitor chip wafer fabrication for quality control while the foundry in Taiwan ramps up to full volume production. If problems are detected, Adaptec engineers can make changes to the recipes from their Milpitas office.
Engineers, who had much to gain from the new processes, accepted the change eagerly, says Dolores Marciel, Adaptec's vice president of worldwide materials. The problem was getting their partners to agree to share their information. "Three of them compete with each other for our business," she says. "There was a lot of resistance."
One reason for the trepidation is that the partners would need to go inside each other's firewalls. "Most CIOs say, 'That's not going to happen,'" says Marciel. Her own CIO was no exception; he came around when he saw that the EDI solution he preferred would be too expensive. Marciel identified the key stakeholders at each enterprise, including her own, then caressed, coerced and cajoled people into cooperating. "It is easy to sell something like this at the CEO level, and the engineers were delighted with it. It's everyone in between that makes it easy or difficult."
Hau Lee, a professor at the Stanford University School of Business and an expert in supply chain management, agrees. "Most problems come from organisational nervousness," he says. "Information is an asset, and partners are reluctant to share an asset." He urges companies to use measuring devices to show their partners how collaboration is affecting the supply chain.
Adaptec took that advice to heart. It used to take 105 days from the time it cut a purchase order until the TSMC-made chips were assembled on finished circuit boards. Marciel says the goal of collaborating was to cut the time to 55 days. Once they achieved it, everyone involved could see how collaborating could benefit them. TSMC even decided halfway through the project to use the software with many of its other customers.
Collaborating for Transformation
Collaborative technology can support the transformation of a large, global company, but it takes patience, a plan and top people who support the effort. DuPont is undergoing many important changes. For one thing, it is more global than ever, with several new plants in Asia and Europe. It sold off its petroleum company to focus more on biotechnology, pharmaceutical, feed and food industries.
The company wants to give its 20 strategic business units more autonomy and to create teams across geography and business units to pursue new business. It decided in late 1997 to roll out Lotus Notes because it needed to upgrade and standardise on a single e-mail platform (down from eigh packages). It also chose Notes over other e-mail packages, Miller says, because of its out-of-the-box collaboration features, including document and discussion databases.
Thousands of companies have installed Notes. What's different about DuPont is that Miller and his team of seven people understand the problem is not technology. Like most other companies, consultant Ogdin says, DuPont is stumbling along the way. But unlike most others, it understands the root of the problem is simply people and how they work.
DuPont has installed Notes in 56,000 of 90,000 desktops worldwide and expects to be done by the end of 2002. E-mail has been ingrained in the culture since the mid-1980s, Miller says. As the company enters the new decade, the goal is to give people new collaboration tools. DuPont already has 4,000 Notes document and discussion databases in use, and Miller expects to see 10,000 to 15,000 when the rollout is completed.
Acceptance of Notes was not a simple matter, however. Miller and his team had to deal with workers who wanted e-mail only and saw no value in discussion databases. But when Ogdin explained that DuPont needed a marketing expert to work on motivating people to make full use of Notes, Miller hired one. "Miller got assigned the task of rolling out Notes, but he took it as a charter to solve the real problem" of sparking collaboration, Ogdin says. "We had to put in place an internal marketing effort to show people the value of them," he says. They identified early adopters of Notes databases and worked closely with them to understand the technological and sociological issues around using a database.
As the early adopters began to show results, Miller's team covered the DuPont universe with presentations, phone calls and conferences about the results. "By the end of 1998, we had plenty of success stories to tell," he recalls. His team also recruited a network of 70 IT people around the globe responsible for installing Notes and used them to carry the message about the value of databases. This network has also provided valuable feedback to Miller about problems and issues around Notes.
One such issue: personal accountability to the database, meaning the obligation to look at new material and respond. With the help of early adopters, Miller and crew developed guidelines for moderating databases and for the user's obligation to look at them and respond. They came up with consistent code words-like urgent, not urgent and FYI-to help users know the level of importance of postings.
Miller does not have his own training budget per se; training is handled by business units. Some are more committed to training people in the full use of Notes than others, and often it takes some kind of crisis to make a business unit leader realise his people need Notes training, Miller observes. Missed project deadlines and faulty communications are among the motivating factors for the handful of business units that decided to engage in Notes training, he says.
Ogdin says culture change like DuPont's rarely comes from the top. Managers in the middle, who need to get things done more effectively, have the real power to move a corporation into a more collaborative culture. "Almost all guys who are willing to make changes are line of business managers who have problems to solve," she argues.
That fits Miller's experience. All top DuPont executives use Notes for e-mail, but they aren't using discussion databases, he says. He says the general managers at each business unit, on the other hand, are beginning to use the databases. As those people move into senior ranks, he expects they'll bring their database behavior with them. "One vice president and general manager was promoted, and he took it all with him," Miller says.
Collaborate or Die
At the very least, lands' end, Adaptec, TSMC and DuPont deserve an "A" for effort. Companies that don't learn how to collaborate will be the first casualties of the new century. "Collaboration provides the kind of real-time agility that translates into more satisfied, loyal and buying customers," says James Canton, president of the Institute for Global Futures, a San Francisco high-tech think tank that advises Global 2000 companies. "With the Internet we now have a host of collaboration technologies that will become business critical and will create competitive advantage." The Internet, he points out, spawned products ranging from discussion threads to virtual conference rooms to virtual auditoriums, and forced the developers of client/server based products to adapt their wares to the Web.
Companies that collaborate better will more quickly deliver more innovative products and services, argues Canton, who wrote Technofutures: How Leading-Edge Technology Will Transform Business into the 21st Century (Hay House, 1999), a book which explores how technology will transform business in the 21st century. They'll become more efficient in manufacturing. And they will have happier, more loyal customers. Companies that don't adapt risk getting left behind. Corporate America's experience with the Web in the past five years is just a hint of things to come, he says. The Web is a standards-based ubiquitous tool that supports real-time communication. Companies that recognised this early are already reaping benefits from greater collaboration among employees and with customers, suppliers and partners.
A lot of companies don't get it, Canton says. He estimates one-quarter of the Fortune 1000 haven't even decided whether to launch an intranet. "CIOs do not realise the business critical value of collaboration," he says. The problem isn't technology, he adds. "The problem is training employees in the use of collaboration as a high performance tool."