Business Innovation Homepage > Information Management

Organizations have been communicating and doing business with each other electronically for years. But with the newer, Web-based tools available, online collaboration with business partners has become a strategic weapon that can help boost sales and reduce costs.

Technologies such as e-mail, Web conferencing, blogs and instant messaging can open up new possibilities for easy, inexpensive collaboration among people, no matter where they are in the world.

“In today’s business world, there is no question in the minds of technical and business managers regarding the value that online collaboration technologies bring to organizations,” says Ruben Melendez, president and CEO at Glomark-Governan, a consulting firm that helps organizations forecast and track the value of technology investments.

Glomark-Governan has found that the economic benefits and return on investment (ROI) of the different collaboration tools vary. As a result, each type of technology should be assessed separately. Melendez says the benefits from collaboration tools can be grouped into five major categories: cost reductions, revenue enhancement, employee productivity/efficiency, revenue enablement and strategic gains.

The collaboration tool that brings the greatest economic benefit and highest ROI is e-mail, Melendez says. Like telephony, e-mail has been classified as an “infrastructure” type of investment, essentially meaning that businesses can’t function without it. Some small, consumer-related businesses such as restaurants or used car dealers could potentially survive in the short term without e-mail, but staying competitive in long term would prove difficult, he says.

In contrast, companies that rely on interactions with other companies must have e-mail to operate efficiently in both the short term and the long term, Melendez says. The main benefit of e-mail for B2B collaboration is enabling business processes and departments to exist, because it’s the new standard for communicating among businesspeople, he says. For collaboration among organizations, e-mail is a revenue enabler and also a cost reducer. For example, Melendez adds, it’s a lot cheaper to send an e-mail with attachments than an overnight package with printed documents.

Web conferencing software is being used by a growing number of organizations. It’s typically classified as a revenue enhancement rather than a revenue enabler because most businesses use the software to increase revenue by conducting more-effective sales presentations, Melendez says. Cost reduction can be another benefit, from the reduced need for travel, and increased employee productivity and efficiency when Web conferencing technologies are used for internal meetings.

Glomark-Governan’s research shows that companies can save, on average, two to five hours per month per employee when using Web conferencing, based on the reduction in travel time.

Blogs are becoming an increasingly popular method of promoting products, services, company information and news, Melendez says. “Executives, managers, engineers and product managers from small to very large companies use blogs to promote their products, and to collaborate with clients, media and consumers to gain ideas for product enhancements, increase brand awareness and generate ‘buzz’ around new product launches,” he says. The ROI from blogs comes from benefits such as increased revenue.

Another collaborative technology, instant messaging, can lead to cost reductions for companies of all sizes, Melendez says. Glomark-Governan research shows that telephony costs can be reduced by 4 percent to 8 percent if a company allows its employees to use instant messaging to communicate both internally and externally.

The business risks of using the various collaboration technologies vary. Glomark-Governan research shows that the two primary risk factors when using online collaboration are the increased risk of incoming viruses — causing downtime in systems and business-processes — and the potential loss of company information to unauthorized parties.

“As with any technology investment, companies must develop a business case to assess the total cost of opportunity, the total benefit of opportunity and the total risk of opportunity for investing in online collaboration initiatives and technologies,” Melendez says. “An online collaboration technology with a higher cost may be acceptable if the benefits are high and/or the risks are low.”

Click here for more Information Management articles