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5.2 The Benefits

 

A survey of 300 business leaders conducted by Deloitte Consulting found that 75% of those surveyed consider collaboration a top priority, and those who’ve linked partners and suppliers to their internal business processes report 70% greater profitability than companies that haven’t integrated with partners yet. However, 45% of respondents say they’re concerned about the complexity of implementing collaborative tools, 33% are unconvinced of the maturity of collaborative software, 33% cite internal hurdles that might keep them from making progress, and 31% say trading partners and other external forces are potential obstacles.

Emiliano Duch, CEO of the Cluster Competitiveness Group, gives an example of the Cadore Region in the north of Italy. With almost no indigenous industry it now controls more than 35% of the world’s manufacture of eyewear. A large cluster of 900 companies and workshops all collaborate to provide the training and skills needed for every element of production.

With so many perceived benefits, it is worthwhile to wonder why so little collaboration takes place, especially among small companies and organizations. Unfortunately, many relationships based on collaboration fail.

Apart from the many perceived barriers for collaboration that withhold the companies; collaboration efforts often fail because critical long-term details are overlooked. Not enough care is taken to select the right partners, to match inter-organizational needs and capabilities and to clearly define standards, metrics, goals and implementation procedures over a medium to long-term planning horizon.

A company can improve business performance by taking any one or a combination of the above routes. Working together can considerably reduce the costs of doing everything yourself. The risks can also be shared. Literature provides numerous sources on the benefits of collaboration, which are summarized in following table:

Benefits of collaboration

Reduced Increased
Risks Market share
Costs Assets utilization
Time to market Quality
Delivery time Flexibility and responsiveness
Inventory Skills and knowledge
Critical mass

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