by Jane Gray, Marketing Manager – Analytics, SAP UK & Ireland

Ethnic-ethnic businesspeople shaking handsI’ve noticed a lot of businesses today use the word “partners” when referring to suppliers.  In a lot of cases, this is accurate – two companies with mutual respect and commitment to achieving shared goals.  However, many businesses still have a somewhat adversarial relationship with suppliers – squeeze their margins, don’t return their calls, make them buy lunch, as though treating ‘em mean will make ‘em keen. A frequent complaint among consumer goods companies is the master-slave dynamic imposed by retailers, while themselves treating upstream raw materials suppliers to a similar ethos.

But this imbalance of power is no longer in anyone’s interests.  Organisations that previously negotiated aggressively and hammered suppliers now need to actively create value rather than simply cut costs.  Technology can be a great enabler of collaboration, trust and mutual accountability, allowing companies to share information instantaneously.  The focus is shifting from customer-issued directives to a real dialogue with suppliers, and enabling access to information on a want-to-know rather than need-to-know basis.

What’s more, as people embrace social networks, online billing and mobile commerce as consumers, they bring similar expectations of convenience and transparency into the workplace, which is triggering a cultural shift.

Open collaboration actively drives business model innovation by allowing insights to be shared and ideas to be jointly explored.  It’s not rocket science – there’s great advantage to being able to tap into the creativity, talent and expertise of people who are in your business ecosystem but not on your payroll.

Imagine that same consumer goods company is able to receive analytical insight from POS data from supermarkets in real-time.  These “business signals” can be turned into replenishment triggers to maintain continuous on-shelf availability while avoiding over-stocking.  Everybody wins, including the consumer.

In any market, flexibility and innovation are becoming the ultimate competitive differentiators.  Cloud, mobility and the convergence of social media with enterprise applications is democratising information, creating communities and supporting efficient collaboration.  Before too long, organisations with an inside-out, “them and us” mentality will likely find themselves trailing behind networked businesses and I, for one, find that vision rather exciting.

Find out more with this week’s Top Tips.