Collaborative Technology -- Part One

By Steve Epner – Founder, BSW Consulting, Inc.

Collaborative Technology describes how companies in the future will share information without human intervention. Actually, the technology is already in place and fully operational. Accountants, regulators, and even the IRS agree on how they are to be operated, how monies are reported, and how audits or tax documentation are to be completed.

Delays in usage are caused by a lack of: Trust; Desire; and Commitment. Until supply chains are able to eliminate these barriers, the hoped for benefits will remain out of reach of all but the largest companies.

Trust is a big deal. Does this sound familiar? “If I give my suppliers all of my customers’ names and addresses, what will keep them from trying to sell direct?” When we have to worry about trading partner relationships at this level, it is difficult to imagine establishing closer ties.

Collaborative technology requires trust. We must be willing to share information with our partners as it becomes available. The information must be complete – nothing can be held back.

Desire is the next issue. Based on data collected for my Master’s research, I found that the vast majority of companies who used the new technology did so only because it was required by a trading partner. They ignored the increased accuracy, speed, and cash flows. Worse, even after implementing it for a given trading partner, having put all of the technology in place, proved the value, they did not spread the use to other trading partners.

We need to want to have this technology in place. We must spread the word that it is good for us. We need to convince our own employees, trading partners, and intermediaries of the benefits. Only then will there be the critical mass so that the benefits are obvious.

Commitment is the last “leg of the stool.” We must be committed to making it work. Sure, the technology is there. The capabilities have been around for over 30 years. Business owners must decide to make it happen. Everyone is waiting for someone else to take the lead.

It is time to stop worrying about who will be the first user and commit to getting it done. We need to let our trading partners know that this will help them as well. We need to get others to join in the commitment to utilize what is already available. Then we will see the results as an industry.

When collaborative technology is used correctly, everyone wins. A simple example is the elimination of paper invoices. In industries that use Evaluated Receipts Settlement, there are no invoices. The customer pays for product as it is received on their dock. They pay based on the agreed to price in the Purchase Order.

Think about the results. Since all payments are made electronically on receipt, there is no need for an accounts receivable department. Since we do not hold invoices for later payment, there is not need for an accounts payable department. Maybe this is why there is so much delay in making ERS work – too many companies are trying to protect jobs.

What if we take the people who are now handling paper and give them more important things to do? Can we be more effective? Can we get things done we do not have time for today? Can we improve the workplace? These are all possibilities, if we want them.

Collaborative technologies take trust that the PO system is working, that trading partners will not try to cheat each other, and that the product was accurately picked, packed, shipped, and received. Trust can be improved with proper auditing techniques, but until two partners can feel comfortable with each other, nothing can happen.

Success requires a desire to make sure the trading partners are “on board.” It may be necessary to sell the idea inside and outside of the organization. Enthusiasm is contagious. If it is absent, the process is much more difficult to make work.

Success requires a commitment to implementing not only the technology applications, but the training and manual procedures that can verify the accuracy of the process. We must take the time to make sure that the systems are tested and validated.

The experience of large companies proves the value. The technology is available – and within most systems sold today. All that is required is for the top management teams in our supply chains to get together and make it a reality.