Tuesday, December 8, 2009

Companies Struggle With Integration and Coordination Across Complex Partner Networks As Business Interdependence Increases Globally

Executives worldwide are struggling with the challenges of integration and collaboration across complex networks of business partners and customers in a more interdependent business world, according to a new study released by the Business Performance Management (BPM) Forum and the Chief Marketing Officer (CMO) Council. The study finds that 21st Century business models have become increasingly dependent on partner networks to shape customer experiences, drive innovation processes and deliver products and services to global markets. Information systems and cross-company business processes, however, are strained to keep pace.

According to key findings in the research, executives appear to be well aware of the need for significant improvement:

-- Some 68 percent of respondents indicate that business partners are essential to their companies’ go-to-market processes, customer experience and competitive position.

--More than half say their partner networks are becoming more global and complex.

-- Yet, only 8 percent of executives believe their companies are highly effective in the way they integrate and optimize these business networks.

Even in a difficult economic environment, the vast majority of companies -- some 73 percent of respondents -- are investing in programs and systems to optimize the way they collaborate with partners. 37 percent of respondents say their partner networks are contributing significant innovation, insight and value to their business, further emphasizing the return from program investment. Executives are also responding to the pressure to transform customer experience and satisfaction as nearly 4 in 10 respondents report that their customers are demanding greater visibility into both their supply and distribution chains.

The study underscores that information systems and cross-company business processes, are not keeping pace with increased business interdependence to enable companies to achieve round-the-clock collaboration, shared innovation, improved productivity and cooperative customer handling:

-- Only 6 percent of respondents say they currently have end-to-end data and process integration across their partner networks, although 51 percent report at least some level of integration with select partners.

-- Some 64 percent of respondents say they have either no ability or an unsatisfactory ability to extend and leverage their internal systems to selling and service partners.

-- Some 75 percent say they have no ability or an unsatisfactory ability to extend and leverage their internal systems to suppliers and outsourced service providers.

--Only 26 percent of respondents say they are effective in sharing customer data and insights with partners to enable innovation.

The study found that business network transformation holds multiple direct benefits to customer experience, including faster time to product resolution (55 percent), reduced cost of customer support (42 percent) and better innovation around products and services (45 percent). Some 42 percent of respondents say they rely heavily on suppliers and outsourced services to meet customer needs and more than 51 percent say integration of partner networks with the customer is important to delivering enhanced service and support.

The study makes it clear that outsourcing, supplier and demand chain partnerships are contributing far more than just cost savings and operational capacity for today’s global businesses. Executives are concerned with improving productivity across their value chains as indicated by at least 25 percent of respondents signaling a significant need for improvement in supplier vendor management, global procurement and sourcing; customer handling and support; sales and customer acquisition; transportation and warehousing; order management and fulfillment; and product lifecycle management.

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