Survey Shows CEOs Are Making Collaboration a Top Priority

Senior Executives at Small and Midsize Enterprises Join Large Enterprises in
Embrace of Business Networks as Pathways to New Markets and Business Growth,
According to BusinessWeek Research Services Survey and Report

NEWTOWN SQUARE, Pa., July 22 /PRNewswire-FirstCall/ -- A new survey finds
that C-level executives are increasingly turning to collaboration with their
business networks as a way in which to win new markets and address quickly
evolving customer needs. According to the survey conducted by BusinessWeek
Research Services (BWRS) and commissioned by SAP AG (NYSE: SAP), these
executives also plan to expand their collaboration efforts even further over
the next three years. Additionally, nearly twice as many small businesses and
midsize companies expect to rely heavily on collaboration within the next
three years. The C-level executives surveyed emphasized the importance of
information technology (IT) and its role in facilitating integration to
support their companies' business goals of increased levels of collaboration
with customers, partners and suppliers.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050310/SFTH009LOGO-a)
Titled "Getting Serious About Collaboration: How Companies are
Transforming Their Business Networks," the research report about the survey
finds that large and midsize businesses plan to expand their reliance on their
business network of partners by more than a third over the next three years.
Approximately one out of three respondents identified access to new markets
and customers as one of the top benefits to collaboration today. Roughly half
of the respondents said they are currently counting on partners for R&D,
manufacturing, marketing, logistics, distribution, customer service, human
resources or other corporate functions -- and two-thirds expect to be reliant
on third parties for these functions to some extent by 2011. Large and midsize
businesses also plan to outsource 18 percent of their operations by 2011. They
already outsource 13.4 percent of their operations to date.
In the survey findings, a Procter & Gamble executive addresses the reasons
for seeking out third parties for collaboration:
"The reason we had to do it was that the world had changed," says Jeff
Weedman, vice president for external business development at manufacturer
Procter & Gamble Co. "Only about one-third of the products we brought to
market were successes. The fast-followers were getting faster, and the
retailers were increasingly our competitors ... Over time, we've been able to
understand networks and the value of them, so we've added places to look for
ideas and technologies."
Small Businesses and Midsize Companies Embrace Collaboration
The survey findings show that collaboration is skyrocketing for small and
midsize enterprises (SMEs, 100-1,000 employees). These companies now recognize
co-innovation with partners as a pathway to growth. Nearly twice as many SMEs
are expecting to rely more heavily on collaboration in the next three years.
The survey findings show that the percentage of business operations supported
by external partners of SMEs will triple by 2011 and are approaching the level
of partnering currently used by large companies. In addition to gaining access
to new markets and obtaining cost benefits, SMEs emphasize improved quality as
one of the most important benefits for collaboration.
The Rising Importance of IT to Enable Collaboration
As the role of collaboration changes, the need for a robust IT
infrastructure becomes even more important to drive success across
partnerships. Only half of the C-level executives responding to the survey are
confident that their IT infrastructures will be able to support their
collaboration strategies during the next three years. This result underscores
the crucial role IT plays in facilitating collaboration and enabling business
transformation. While CEOs are embracing the concept of developing customer-
centric business models by optimizing the company's network of employees,
suppliers, customers, partners and distributors, IT needs to play a strategic
role to make it all work.
As mentioned in the survey findings, The Dow Chemical Company's heavy
investment in IT in the mid-1990s set it apart from other companies in the
low-margin chemical industry. It ditched fragmented legacy systems and created
common work processes. Its smooth-running technology became the gold standard
among large companies in its industry. Dow's IT infrastructure is the crucial
foundation platform that enabled a successful overhaul of its strategy and
business model.
"The findings of this survey confirm that collaboration is being
increasingly recognized as a pathway to growth, innovation and competitive
differentiation," said Zia Yusuf, executive vice president, Global Ecosystem
and Partner Group, SAP. "In an early acknowledgment of this trend, SAP itself
is a practitioner of business network transformation through collaboration.
Through our ecosystem of partner and customers, we are helping to accelerate
innovation and improve return on investment for our customers. The SAP
ecosystem brings together diverse relationships, resources, and communities to
help create the next generation of technology solutions in concert with our
own development efforts."
In addition to the survey, SAP also has engaged business leaders worldwide
on the subject of collaborative business networks. To view SAP TV videos where
CEOs from companies including Cisco Systems, Inc., the LEGO Group and Mahindra
and Mahindra discuss their thoughts on collaboration, please visit
http://www.sap-tv.com/special_0801_00.htm.
Please visit, "Getting Serious About Collaboration: How Companies are
Transforming Their Business Networks," to view the research report.
BusinessWeek Research Survey Methodology
BusinessWeek Research Services (BWRS) launched a survey and research
program in early 2008 to discover and analyze the views of C-level executives
and line-of-business executives on collaboration with third parties. BWRS
received responses from 353 C-level executives of companies with at least 100
employees in January 2008 via an online questionnaire. Respondents were from
a wide variety of industries including manufacturing, financial services,
healthcare/pharmaceuticals/life sciences, transportation/utilities and
wholesale/retail. The quantitative survey was complemented with qualitative
research. BWRS conducted in-depth telephone interviews with senior executives
from a cross-selection of industries. BWRS also conducted interviews with
leading independent consultants, industry analysts and academics to provide
context and additional insights.
About SAP
SAP is the world's leading provider of business software (*), offering
applications and services that enable companies of all sizes and in more than
25 industries to become best-run businesses. With more than 47,800 customers
(excludes customers from the acquisition of Business Objects) in over 120
countries, the company is listed on several exchanges, including the Frankfurt
stock exchange and NYSE, under the symbol "SAP." (For more information, visit
http://www.sap.com)
(*) SAP defines business software as comprising enterprise resource
planning and related applications.
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