The Pros and Cons of Collaborative Planning
Written By: Steve McVey
Published On: September 12 2000
The Pros and Cons of Collaborative Planning
The rapid advance of the Internet and related technologies are quickly
turning business-to-business collaboration into a reality. Among its promises
are real-time information sharing, the ability to maintain personalized
relationships between buyers and sellers, and greater efficiency for all
companies joined in the expanded enterprise. Unfortunately, excitement
surrounding B2B collaboration often drowns out the simple truth that collaboration
products are still in a formative stage and their promise, largely unfulfilled.
this case, B2B collaboration software vendors do not shoulder the largest
part of the blame. The culprit is simply the absence of a commonly held
and coherent view of how collaborative planning should be performed. Consolidating
the various approaches to collaboration into a finite set of methodologies
is a daunting endeavor, but one that many software vendors struggle to
do. These vendors assume leadership roles in standards organizations and
work with users to design an overarching solution from the top-down.
less ambitious vendors bypass the larger issues surrounding collaboration
among external and internal trading partners and simply code software
that automates current chains of communication and information sharing.
Feedback from users serves as a corrective factor, influencing future
release functionality and steering it iteratively toward a better design.
kinds of vendors, the theoretical and the empirical, have produced collaborative
planning solutions that address many important parts of the collaboration
the ongoing evolution and variety of collaborative planning applications,
it is instructive to take a snapshot from time to time and make comparisons.
Most collaborative planning products have three things in common: emphasis
on role as member of a trading partner community, real-time communication
of a wide variety of data among trading partners, and access through a
Web browser. Like most strengths, these have an associated downside or
"every silver lining has a cloud," and here we examine the pros and cons
attributes of collaboration software include:
on role as member of a trading partner community
Pro: Companies see their enterprises as components of the larger
The widely held belief that technology is making the world smaller applies
to the corporate world as well. Collaborative planning is more than
simply buying and selling online but is, in fact, an extension of a
company's business processes into those of its trading partners and
vice versa. Technological aspects aside, the mindset that inwardly focused
corporations must adopt to make effective use of collaborative planning
is vastly different from even that required to make the jump from ERP
to supply chain planning.
Con: Requires companies to have smoothly running internal processes.
Before companies can expect to benefit from having better visibility
into their trading partners' operations, they must first get their own
house in order. This is because companies must provide accurate data
to the right partners at the right time. In a very real sense, information
becomes as much a product as is an ingot of steel, a crate of detergent,
or a box of microchips; and getting it to the customer with routine
good performance is important to building a trust. Some companies embark
on collaborative planning implementations thinking that all they need
to ensure is that data are plugged into the proper places and the Internet
will take care of the rest. Painful months spent tracking down bad and
missing data are the consequence of a premature move to collaboration.
communication of wide variety of data among trading partners
Pro: Instantaneous sharing of mission-critical business information.
Data typically of interest in collaboration schemes include available
inventories, outstanding orders, new purchase requisitions, unpaid invoices,
engineering changes in bills of material, service part status, and shipment
locations. The improved visibility afforded by collaboration products
allows planners to respond quickly and accurately to changes.
Con: Potential exists for inadvertently giving trading partners
access to sensitive information.
User education and careful planning are critical in the early stages
of an implementation. Users should understand what data will be shared,
how and when it will be transmitted outside the company firewall, and
what responsibilities they have to the integrity of the data. Without
taking the time to ensure that everyone knows how collaborative planning
software works, companies can compromise and destroy valued, long-standing
relationships with suppliers and customers.
through a Web browser
Pro: No software installation necessary and a low (or zero) cost
of entry for business partners.
Perhaps the most attractive technical characteristic of B2B collaboration
solutions is access via the Internet through a simple browser program.
This gives companies who host the software a powerful argument for convincing
suppliers and customers to join. Partners reap the rewards of access
and visibility without needing to purchase, install, or maintain the
Con: Incomplete or nonexistent integration to core enterprise
applications and potential for duplication of data.
Although Enterprise Application Integration (EAI) or middleware tools
combined with data repositories can solve the problem of connecting
data received over the Internet to a company's internal applications,
implementing the links is still a complicated process requiring skilled
integration resources. Proper synchronization of data received via the
Web with data circulating internally also presents a host of difficulties
and some compromises in when data are updated are inevitable.
Though solutions promising to deliver instant collaboration are available
now, much work remains in forging a consensus on how collaborative planning
should be accomplished. Finding the best balancing among the pros and
cons requires input not only from individual enterprises, but also from
their trading partners and members of the extended network that can cross
multiple industries, time zones, disparate business cultures, and languages.
Flexibility is a must for collaborative planning solutions so that enterprises
can model internal processes as desired while still maintaining the ability
to participate effectively with other members of the network.