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 today 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.

Greater Innovation Through Closer Collaboration, sponsored by Sterling Commerce and AT&T, is based on a survey of over 400 executives and managers across a wide range of industries, as well as over two dozen qualitative interviews with leading executives from global businesses including Best Buy, United Rentals, and PepsiCo. The report can be downloaded by visiting http://www.bizcollaboration.org/collaborate-report.php .

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.

“Twenty-first century business models are more dependent than ever on complex, cross-company collaboration for business innovation, product and service delivery and customer satisfaction,” said Liz Miller, vice president of the BPM Forum and CMO Council. “Developing and extending information systems, business processes and corporate cultures to succeed in a global networked economy will become increasingly critical for global businesses.”

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.

“As businesses look to improve performance and be more adaptable to market opportunities, managing complex webs of interconnected vendors and partners has become a business necessity,” said Joel Reed, Senior Vice President Product Management and Marketing, Sterling Commerce. ” Those webs encompass a company’s Business Collaboration Network, which, when optimized, can transform what used to be called the ‘supply chain’ into a differentiating ‘value chain’ that helps increase productivity, speed time to market, and reduced risk and cost associated with compliance.”

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.

“This research highlights the need for today’s business to have access to systems and networking solutions that cross borders and functional barriers to connect vendors, partners and customers.” stated Alicia Dietsch, Vice President, Business Marketing Communications & Operations of AT&T. “Connectivity in today’s fast-paced market breeds innovation – and new ways to serve and engage with customers. We can’t let cost, burden and hassle be barriers to innovation.”

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About the BPM Forum

The Business Performance Management (BPM) Forum is dedicated to advancing performance accountability, process improvement, operational visibility and compliance in global organizations. It provides support to thousands of senior executives and practitioners representing enterprises with more than $500 billion in combined annual revenues. The BPM Forum’s C-level members engage in research, thought leadership, and knowledge exchange programs around a variety of strategic issues and challenges. More information is available at: www.BPMForum.org.

About the CMO Council

The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide-range of global industries. The CMO Council’s 5,000 members control more than $125 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and it’s strategic interest communities include over 12,000 global executives across 90 countries in multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East and Africa. The Council’s strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Marketing Supply Chain Institute, and the Forum to Advance the Mobile Experience (FAME). www.cmocouncil.org

About Sterling Commerce

Sterling Commerce, an AT&T Inc (NYSE:T) company, helps companies optimize and transform their Business Collaboration Network to accelerate revenues and reduce costs. More than 30,000 customers worldwide use Sterling Commerce applications and integration solutions to connect, communicate and collaborate inside and outside their enterprise. More information can be found at www.sterlingcommerce.com

About AT&T

AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world’s most advanced IP-based business communications
services, the nation’s fastest 3G network and the best wireless coverage worldwide, and the nation’s leading high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of their three-screen integration strategy, AT&T operating companies are expanding their TV entertainment offerings. In 2009, AT&T again ranked No. 1 in the telecommunications industry on FORTUNE├é┬« magazine’s list of the World’s Most Admired Companies.
Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at www.att.com

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