Archive - Edition 5: Collaboration

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Leading Article and Introduction

Communities, Knowledge Management, and More...

SAP Collaboration Projects

 

Beyond Commerce: Bringing Business Relationships and Community to the Web

By Karen Holtzblatt & Hugh Beyer, CEO and CTO of InContext Enterprises – September 12, 2002

The web's power to traverse space by linking disparate, distributed databases enabled e-commerce marketplaces, but they haven't proved profitable. Now companies are looking at the web to support collaboration among the distributed workers of global companies.

InContext Enterprises sought to identify Internet directions that could support complex business deals and product development that require significant coordination and collaboration. InContext consultants used its widely accepted Contextual Design methodology to conduct an in-depth study across key functions in four representative industries (This study was sponsored by SAP together with two other large companies from banking and high tech industry.) Thirty observational interviews provided close range, on-the-job views of key players in financial services, auto manufacturing, and oil and utility trading. Participants in the study included traders, sales staff, buyers, purchasers, customer contact points, corporate treasurers, consultants, managers, and business coordinators.

 

Business is about People, not Products

What InContext learned is that business is built on relationships, communication, and personal community. The Internet has not been exploited to support these fundamental aspects of doing business; the industry focus has remained on products instead of people. And while the concept of community recently has emerged as the hot buzzword in analyst pages and the popular press, scant attention has been paid to defining what a community is, how it can be supported, or what this means to business. Therefore, companies have failed to capitalize on the opportunity that the Internet is best able to facilitate – communication among groups of people across distances.

All Complex Business Transprires through Relationsships

When complex, non-commodity products are designed, manufactured, bought and sold, their exchange demands increased human support and interaction. Unlike simple commodities, complex offerings such as bonds, customized automobile parts, cash management processes and advice cannot be traded without extensive collaboration. Furthermore, with increased internationalization of business, such collaboration frequently occurs across distances and time zones. For complex products:

Relationships Increase Convenience, Reduce Risk

If participants in a business relationship do not know each other well, their negotiations are complex and involve extensive paperwork. As the participants work together over time, they close deals quicker with less paperwork in a more informal, collaborative relationship. Whether we are talking about collaborating to close deals, co-designing products, instituting financial processes, or trading strategies, business is built on trusted relationships. Ultimately, mutual trust ensures quality from suppliers and vendors, and that quality, in turn, ensures ongoing and repeat business.

Therefore, the goal of people involved in complex business interactions is to develop and maintain a small set of trusted people on whom they can rely. These relationships are nurtured and maintained. They generally begin with, and are punctuated by, numerous face-to-face meetings. Initial contacts are followed by ongoing telephone calls, emails, and faxes as discussions and negotiations proceed. People depend on these tight relationships to reduce the complexity of their daily interactions, speed achievement of business goals and lower the risks that would otherwise be incurred when dealing with unknown suppliers. It is these groups of people in business relationships that together form personal business communities.

 

People Operate within Communities

If you know what the elements of a community are you can design a system to support them. The industries we studied revealed three models of community that operate within the larger business community. Across all industries and functions observed, these communities share common elements: they are based on closed membership, yet provide methods for new players to enter; members trust each other and rely on advisors; and members hold a set of shared values and goals. In addition, each community features an ongoing conversation based on industry and community-specific information.

The Personal Community is at the Center

The personal community is created by an individual's relationships with the people who helpthem get their business done. This can include co-workers, support staff, colleagues and business partners. For example, buyers identify a set of preferred suppliers with whom they do repeat business, and sellers work with a set of customers. All other community models also include the personal community.

Models of Community

The models of community provide a powerful way of looking at industries and business. Examination of community models shifts the design of Internet-based systems from a product-focus to the support of business relationships. It helps identify the business activities the Internet needs to support for any industry, including those not studied. And it illustrates ways that online environments can promote productive interaction, even in fragmented industries that lack an intrinsic community.

InContext identified and defined the following community models:

 

Implications for the Internet

Traditional Web use has served to decrease interaction between people. This is appropriate when buying items that are easy to specify, such as simple commodities. Aggregate buying makes sense for commodity purchases as well. However, when supporting business with complex products and services, the Internet can be most effectively used to support interactions and relationships between people. Aggregate buying opportunities decrease, but collaboration and negotiation increase with complex products. The Internet can be particularly effective in providing ongoing support for long-term and recurring business relationships, which depend on high levels of coordination and collaboration across distances.

The challenge is to bring the personal community onto the desktop, while allowing quick access to the larger community of participants that is designed by community type.

Opportunities to Make Community Real on the Web

While the Internet can't replace face-to-face meetings, InContext identified opportunities in a number of areas for it to supplement and enhance relationships. Both marketplace providers and companies seeking to gain strategic advantages can do so by identifying the appropriate community and work practice they are supporting. For example, remote collaboration on a deal can be enhanced if the collaborating parties have vital information about community members, their history of deals and transactions, documents, market conditions and trends, and other necessary information available and accessible from one place. Shared virtual space for one-on-one or group meetings of community members could support telephone document reviews for engineering or contract negotiation.

By providing full, ongoing support of all the interactions that are involved in creating and exchanging complex products, from design through manufacture, distribution, selling and buying, online marketplaces can become online communities.

Opportunities exist for marketplaces to support and maintain:

There are different and appropriate designs for each type of community and relationship. Each level requires support for multiple, ongoing transactions. By establishing a context that maintains relationships, you move beyond the current practice of buying and leaving the website and into the practice of keeping business online.

 

InContext Enterprises

InContext is at the forefront of moving Internet design from information environments to work environments. Founded in 1992 by CEO Karen Holtzblatt and CTO Hugh Beyer, InContext designs market strategies, integrated product suites, communication and learning environments, portals and online business communities using the Contextual Design methodology. InContext also teaches Contextual Design techniques in conferences and universities around the world.

Contextual Design provides a proven process for collecting field data from users as they work and enables its practitioners to transform that data into innovative designs that support enhanced work practice. Along with numerous articles and contributions to other publications, Karen and Hugh co-authored Contextual Design: Defining Customer-Centered Systems.

During her fifteen-year tenure in the HCI industry, Karen has been an instrumental figure in moving technology from product-driven to customer-driven design and in bringing Contextual Design to business. Karen holds a PhD in psychology from the University of Toronto.

Hugh brings extensive knowledge across a wide range of technical platforms to Contextual Design, with expertise in new and emerging technology. He holds a degree in software engineering from Harvard University.

 

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