The profitable collaborative commerce

September 1, 2008

, NAIROBI, September 1 – Collaborative commerce, also known as Inter-Enterprise Integration, is the use of Internet technologies to integrate an organisation’s core business processes with those of its customers, suppliers, business partners and other stakeholders.

This assimilation results in a seamless and transparent business chain involving all stakeholders. Though collaborative and e-commerce utilize the same tools for the same overall objectives, the former brings together many players in a corporate business effort while the latter is largely individualistic.

Recent studies suggest the impact of collaborative commerce is significant. One such study conducted by NerveWire shows that companies which have embraced collaborative commerce have increased revenue by 40 percent, reduced costs by 30 percent, slashed cycle-times (the time it takes to accomplish a business process) by 37 percent and boosted customer retention by 35 percent.

Several factors drive modern businesses from mere e-commerce to collaborative commerce: globalisation and its associated threats and opportunities, the Internet revolution, economic liberalisation, rapid specialisation as well as new business concepts such as Business Process Outsourcing (BPO).

It is now dawning on industries that they can no longer treat suppliers as mere vendors from whom every last ounce of cost-savings must be wrung nor customers as simple markets at the best prices. Conversely, suppliers and customers are now recognized and treated as collaborators in the business, deserving improved business efficiency and value. Thus, the most successful businesses have now created a scenario where the company and its most important trade partners operate as one finely tuned value chain.

Ironically, research also indicates that in spite of the benefits, very few companies engage in collaborative commerce. Most barriers to collaborative commerce are non-technical. In fact, the top barrier is lack of mutual trust between partners. The fear concerns the sharing of proprietary information and that it may be abused. Other hurdles include fragmented internal business processes, divergent operations platforms, and lack of capital among the would-be collaborators.

Kenya has been making arduous efforts to ‘wedge out’ a slice the online business pie but there is very little to show so far. The National Taskforce on E-commerce was formed in the late 1990s but to date, there’s not much to its credit in terms of mainstreaming Kenyan businesses in cyberspace. We remain mere hitch-hikers on the business information superhighway to date. To break the jinx, I propose that we should shift focus from e-commerce to collaborative commerce.

The greatest benefit of collaborative commerce for Kenya would be its pooling model where various players bring in their best which is then harnessed for maximum impact. This yields superior visibility, higher credibility and greater efficiency. Further, its participatory approach also makes it easier to implement ideas drawing from the collective intelligence and resources of the collaborators.

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