WH Smith achieves ever-faster feedback to publishers: Working with the other side

Competing in a multi-stranded market often demands close liaison with your suppliers - and even your rivals. Fortunately, communications technology can now be configured to make such seamless inter-company collaboration efficient and safe. Ron Condon explains.

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Last Updated: 31 Aug 2010

As the ultimate in stress reduction, a new service cooked up for people moving house has to take the biscuit. For a fee, OneMove will manage everyone involved in your house-buying process - the seller, solicitor, estate agent, mortgage provider, bank and removal company - and provide you with a blow-by-blow report on progress via a BlackBerry communications device they lend you for the period. At least one customer claims to have bought and moved into their new property without ever speaking to a solicitor.

It is just a small example of how electronic communications, and a bit of imagination, can be used to smooth the wheels of commerce. In the rest of industry, from heavy manufacturing to the law, and from retail to construction, companies are also sharpening their processes by the use of communications technology.

Several factors are driving the trend. Companies have offloaded non-core activities and find themselves dealing now with suppliers and customers from anywhere in the world. After 9/11, international travel is seen as potentially dangerous, costly and, for the environmentally aware, a waste of resources. And finally, communications technology has come on apace, with high-speed internet connections and mobile devices available to all.

It is increasingly easy to brainstorm with partners in India or China without leaving your desk, or trade with suppliers and customers without raising a paper document. That is the theory, anyway, and many companies are inching their way to that happy state. But technology is only part of the answer: to get the real benefits, they need to change the way they work and think.

For a start, in this age of joint ventures and outsourcing to specialist suppliers, two companies may find themselves competing savagely one day and bidding for contracts together the next as part of the same consortium.

In the first case, they guard their information jealously, and in the second, they will need to share.

So how do you build a sense of community, or common cause, when team members all work for different organisations?

Finding the right blend of communication - from face-to-face meetings, to phone, e-mail and video conference - is difficult, especially where commercially sensitive information is involved. Get it right and you can save time, effort, paper, petrol and money; get it wrong and you have a project veering out of control, with secrets leeching out to competitors.

Luckily, the IT industry has been active in creating a range of tools that can help companies work together, share information and run pre-arranged and ad hoc meetings without the bother of travelling. Leading vendors in the conferencing market include the likes of Webex, Polycom and Genesys, while traditional IT and networking companies, such as Cisco, Microsoft and IBM (via its Lotus division), have also moved into the market.

What makes their latest offerings more attractive is that they allow you to dispense with the expensive dedicated videoconferencing suite and let participants attend meetings while sitting at their desktop PC.

The picture quality over the internet will not be terrific in most cases, but that is not usually an essential component. The real appeal of this kind of system is that it allows people to use a standard desktop program such as Microsoft Outlook or Lotus Notes to arrange a meeting, and then to share information - such as Word files, or spreadsheets - or create a whiteboard where participants can brainstorm ideas, as if they were sitting in the same room.

Collaboration is more than meetings, of course, and conference systems form just part of the picture. Other collaborative systems focus on establishing a central repository of information that can be accessed, with the necessary controls, by all participants over the internet. This cuts out the need for phone calls, faxes and e-mails, or letters in the post.

A good example of this is the BuildOnline system used by the construction industry, where dozens of different contractors may be working on the same site. 'Construction companies need to co-ordinate a lot of different suppliers. Exchanging e-mails and paper documents can generate chaos,' says Mark Suster, the company's founder and chief executive.

'Eighty per cent of building errors occur as a consequence of people looking at the wrong version of a document or drawing. Things change all the time, with local planners or inspectors making alterations, and these need to be communicated to all involved. If an inspector asks for a change, then that will affect what materials are needed.'

His system allows all involved to access the latest information through a PC and an internet browser. Users can make any amendments they need, and send them back to be incorporated into the design, other users being alerted via e-mail or text message. In addition, every change is audited and logged, so it is always clear who approved what changes.

It is a big change for the building industry, which typically consists of small companies and where spending on IT, at 0.7% of turnover, is well below the average for industry as a whole. But for big projects, such as a major upgrade programme at 70 London Underground stations, says Suster, or the refurbishment of 2,200 branches of the French bank BNP Paribas, it has helped to maintain a welcome level of control. Most users can use the system after a two-hour training session, he adds.

In a very different arena - pensions and insurance - Friends Provident has opened up its systems to independent financial advisers to allow them check their clients' policies and to submit new applications on-line.

Dave Mace, the company's head of e-business, says the transformation has been dramatic. An application that might have taken weeks or months to process can usually be done on the spot. 'Sixty per cent of applications go straight through untouched by human hand at our end. The IFA can give the policy to his client straight away.'

And following an agreement between insurance companies, the IFA can now do a complete review of the client's financial position through the same system, regardless of the company holding the policy. Beforehand, the financial adviser had to write to each provider requesting the information.

In these examples and those shown in the panels (WH Smith News and Rolls Royce), companies have found a way of exchanging information securely, an essential prerequisite for this kind of collaboration.

But according to a survey done by Hummingbird, a provider of collaboration software, 56% of people said they did not save e-mails, meaning there was no record of what they had said, while 35% admitted to sending out the wrong version of a document, with procurement departments being among the worst offenders. A properly managed system will not only protect valuable information and ensure accurate working; it will also provide a complete audit trail of who did what and when.

And the technology is improving all the time, with many companies finding ways to control how electronic documents can be used. For instance, Adobe, the company that gave us the ubiquitous PDF file format, has embedded new security features into its technology to manage who does what with documents, even after they have been sent.

According to Mark Wheeler, the company's head of knowledge worker solutions, the technology works as an 'electronic tether' to the document, allowing the sender to dictate whether it can be printed, saved or edited, and even control how long it can be used on the recipient's machine.

'If I want you to bid for a contract, I can send you a document with the details. If you don't win, I can switch it off at your end,' he says.

The technology can work equally well for monthly price lists with, for example, a pre-set expiry date to ensure that the right version is used.

And it does not apply just to PDF files. The technology will also work across most office data formats, and a range of computer-aided design formats. So it becomes possible to share all manner of confidential information without losing control of it. Moreover, you can audit the information and see when someone printed a file and how many copies they made. It gives a complete audit trail of the document.

Developments such as this, together with the ubiquitous availability of fast internet access, is making complex multi-partner collaboration feasible. But as the examples above emphasise, management and monitoring are still essential factors for success.

- WH Smith's distribution arm handles more than 50 million newspapers and magazines per week, from 500 publishers to 22,000 retailers. With most products taken on sale-or-return, there's a fine line between shifting too many copies and too few to meet demand.

Information systems director Richard Webb says the major growth in newspaper and magazine sales at the big four supermarkets has forced a change in the way WH Smith News works. In the late '90s, it streamlined its processes by installing SAP (enterprise resource planning software) throughout the business, with Oracle data warehouse and business intelligence software from Business Objects.

This enabled sales information to be fed upstream quickly. 'We began providing information back to the publishers in a form that they could analyse, to see which titles were doing well, by title, issue and store, and also the level of returns. The minute the product came off sale, we could explain exactly how it had performed in the market.'

The company has worked with the major outlets to improve processes further.

As a result, some retailers now provide WH Smith News with their daily Epos data, which lets it track sales at each store and replenish the shelves automatically. Previously, the company supplied a weekly delivery of Radio Times, for instance, which was too many to fit on the shelf and so had to be managed by shop staff. Now, the distributor can monitor stock and drip-feed delivery to the shelves. WH Smith News manages stocks itself rather than acting as a staging post for publications coming in and out.

The result of these efforts, says Webb, is to reduce the wastage by 75% and provide a keener service to retailers and publishers. The next step: to link up with the transport companies.

ROLLS-ROYCE GEARS UP ITS SUPPLIERS

For the past three years, Rolls-Royce has been involved in creating Exostar, a commercial e-business trading exchange for the aerospace and defence industry, along with BAE Systems, Boeing, Lockheed Martin and Raytheon.

The firms often compete, but they share thousands of common suppliers; Exostar provides them with a single electronic portal through which to deal with them.

According to Nick Bleech, Rolls-Royce's head of information security, 'it's now a huge international system and supports the whole electronic supply chain from the electronic design end, through manufacturing to financials'.

The main benefits are paperless trading and speed of operation, but it goes further. The system has enabled Rolls-Royce to reduce stock and warehouse space by managing orders and deliveries more closely with suppliers. 'We are all under pressure to reduce stock. In most cases now it is unacceptable to tie up warehouse space. You need someone else to do it for you - carriers such as TNT and Exel, for example - or to eliminate the need for it with just-in-time delivery.'

But technology is only half the story. 'More quietly, in engineering we have had to roll our sleeves up and do the work. It requires a lot of detail. It is very easy to make mistakes. Look at how Wal-Mart and other retailers tried to impose EDI (electronic data interchange) on their suppliers, obliging them to shell out money for expensive systems.'

He advises: 'Work with your suppliers to educate them in what they should do, and be proactive about it. Don't just tell them the day before that you'll be working over the internet.'

Confidentiality is an area of concern. Bleech warns that suppliers need to be trained to use the system. 'They are not IT-mature, so when we start trying to hook them up, we have to pass on the stuff we know about securing messages.'

Rolls-Royce operates a control centre in Derby to monitor Exostar activity and to catch any problems early. The approach is more gentle than previously.

'In the past, the attitude was that we'd go into the supplier in rottweiler mode when things went wrong. We find now that this psychological barrier can be broken down. When you have a level of joint commitment from your suppliers, you get a disproportionate benefit.'

FIVE STEPS TO SEAMLESS COLLABORATION

1. Agree how the intellectual property of all parties will be managed, and who will have access to it, right at the start. Only when everyone is happy with this part of the process can true collaboration begin.

2. Put someone in charge of managing communications. Let them be the focal point for reporting problems, as well as producing updates, newsletters and a quick guide for new joiners on how to use the system.

3. Use technology to help track versions of documents, and to provide a complete audit trail of who did what and when. This is necessary to meet compliance regulations and will be invaluable in the event of any dispute between partners.

4. Choose a medium for communication - be it videoconferencing, e-mail or instant messaging - that everyone is both able and willing to use.

5. Don't rely on technology alone. Participating teams need training and support before they become comfortable with the systems. If in doubt, don't send an e-mail; pick up the phone and talk to someone.

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