Trends in networking and communication

There is overwhelming anecdotal evidence of the economic benefit of collaborative technologies:

Increased productivity:Collaboration improves productivity in a number of ways. First, it can efficiently bring together a broad range of experts much quicker then conventional methods. By having all knowledgeable and impacted groups represented, decisions can be made quicker and with greater assurances that they are correct. Collaborative technologies that enable employees to telecommute increase productivity and job satisfaction by allowing the employee to avoid unproductive commute time as well as the associated stress. Various studies suggest that employees tend to work more hours when telecommuting, presumably using the extra time the did not spend commuting for the betterment of the organization

Direct cost savings: Collaborative technologies can also offer an organization significant, direct cost savings, specifically on travel and other related expenses. Organizations have already effectively replaced some traditional meetings with teleconferences. As the functionality of the collaborative toolset expands, more and more meetings can be moved from the conference room to the network at a great cost reduction for the organization.

Indirect cost savings: There are also a number of ways in which an organization can accrue indirect cost savings through the use of collaborative technologies. For example, the ability to increase worker productivity either through telecommuting, facilitated sharing and dissemination of information, and mobile connectivity with the office can result in significant cost reductions. In addition, the ability to collaborate with someone in a different time zone in real-time can have immeasurable value, particularly in fast changing environments. The problem with these cost savings, of course, is that they are very difficult to measure, and as the old saying goes: If you can't measure it, you can't manage it.

On the other hand, there are significant costs associated with the adoption of collaborative technologies:

Hardware and software: An obvious and important cost of implementing collaborative technology is the actual costs of the hardware and software, plus the necessary infrastructure investments. The following graph illustrates how quickly these costs can rise. While an email "seat" costs an organization around $50, the cost of a "seat" for collaborative tools can be 6 to 20 times as high.

Network externality & Intranet applications: Network externality is also a significant factor in the deployment of extranet based collaborative tools; however, these network effects are substantially reduced for intranet implementations. For intranet applications, the organization's value proposition is derived primarily from the internal use of the application, which in turn is determined by the organization. When the technology is deployed, the firm instantly gains as much value from the technology as it chooses to invest. It has control of where to deploy the tools, at how many locations, and for what purposes. While this scenario might change for a single profit center within the firm, from the perspective of the organization as a whole the network is self-contained. This fact implies that such decision should be made at the corporate level when possible since a primary benefit of the technology can be cross-division collaboration. It also implies that, at least for intrabusiness applications, many diverse collaborative technologies can survive since wide-spread adoption is not required for the application to provide value

Network externality & Extranet applications: When the discussion moves to extranet applications, the equation completely changes. Network externality effects become increasingly important, and successful development firms will need to be widely adopted or comply with the prevailing standards. The desire for organizations to collaborate with each other will eventually push the market beyond internal solutions. At that point, the value of the application will increase significantly with each new adopter of the technology. Since firms do not have much (if any) control over the computing environment of their partners, interoperability and wide spread adoption will be critical to the success of the tools. These applications will require a different pricing model then the one employed to enter the intranet markets since the value is now tied to the number of adopters.

Because of these factors, we believe that collaborative technologies will first become widespread in intranet realms (i.e. for use primarily within a single firm) and some highly coordinated cross-firm efforts. These applications will prove to be the testing ground for the technology and new work paradigms. As these paradigms are refined and the technology becomes more universally accepted, dominant players will emerge that can provide value beyond just the organizations network either because of their market penetration or the emergence of industry standards. At that point, network infrastructure issues and interoperability will become the key determinants of the success of the industry.

Until then, we believe that the technologies will develop to meet the needs of the internal, or intranet, organizational markets. We believe that the business case for organizations to use collaborative technologies internally alone is sufficient to justify the expenditures they will incur, and many organizations are already validating this belief. Our case studies discuss the economic benefits accrued to the organization and shed some light on how to capture the cost-benefit information required to make the decision.

Human resistance to change: Humans are inherently averse to change. This resistance to change is not unique to collaborative technologies. It is true of any new technology or change in business process. The upside and downside in these technologies is they have such a great potential impact on the way people work and communicate, that it magnifies the degree of change and can engender strong opinions either for or against the technology. Effective planning for change drastically improves the probability of success.

At General Foods, which implemented a more basic collaborative tool - scheduling, fear kept the project from taking off for five years before it was finally overcome. The most common concerns were loss of control of personal calendars and a fear that they would be inundated by meetings because they were now easier to schedule. Management eventually overcame these fears with a two-pronged strategy. First, GF rolled the product out in a phased manner and only gave it to specific functional groups to start. These were groups that had considerable contact with everyone else in the division, so the word spread that these fears were unfounded. The second prong of the attack was to publicize the success of the project. GF published articles for the company TQM newsletter about how much time the scheduler saved in the initial pilot tests and how easy it was to use. The word got out, and the fears evaporated.

If this much fear can be generated by a scheduling tool, imagine the range of reactions, for example, to a system requiring individuals to collaborate over the internet with a company that was once considered a competitor. Even intra-firm collaboration can be perceived as a prelude to being replaced, laid-off, or relocated to a new division. Middle managers tend to be particularly fearful of collaborative technologies, viewing it as a threat (perhaps real, perhaps perceived) to their power and organizational domain.

We will discuss in further detail how an organization can address these concerns through training, communication, and reshaping of the corporate culture in the section on Industrial Organization. Suffice to say for now that an adopting organization will fail miserably at implementing these technologies if these human factors are not considered. Collaborative technology companies, for their part, must be prepared to help organizations recognize and plan for these issues. If the industry does not help prepare organizations, they run the risk of seeing the implementations fail and having the technology blamed for the failure. An early set of such horror stories could permanently stifle the young industry.

Human-computer interface: There are several very critical interface issues key to the successful integration of collaborative technologies into organizational work processes. First, the interface must be easy to use and intuitive. Given the high costs of training, successful tools will be developed in a way that minimizes individual learning curves. In addition, the tools should be developed to minimize the organizations learning curve. In other words, the tools must not only be easy to use, they should also fit seamlessly into the organizational processes. These goals can be accomplished through careful attention to the interface design details, standardization of basic commands across vendors, and by leveraging off the basic look and feel of existing GUI designs.

In addition, collaborative technologies will need to find a way to address the more challenging problems of simulating physical presence in a collaborative setting. The human interface will need to capture important non-verbal gestures in order to more fully capture all communication in a virtual meeting space. Body movement and facial expressions convey important information that, if successfully captured in virtual space, can greatly enhance the value of these meetings. A related issue is the subject of floor control. While neither of these issues is likely to stunt the growth of the collaborative technology industry, companies that come closest to emulating these important, real-world meeting dynamics will be able to push video conferencing applications beyond existing bounds.

Socialization implications: There are also many social habits that, while impacted by the human interface, are not likely to be overcome by it. Humans have a basic need for presence, a need that is greater for some interactions and less for others. Collaborative technologies will attempt to make up for the lack of true physical presence through the use of sophisticate GUIs and other objects. However, we believe that certain social customs, like the handshake symbolizing agreement to a deal, cannot and should not be replaced by these tools. Clearly people will continue to meet in person for significant, lengthy, or intimate discussions. Collaborative technology companies should recognize this distinction and focus their energy on features that will best support interactions best suited for remote interaction.

There are several organizational decisions which firms must address:

Complementary products: Because of the horizontal structure of the computer industry, there are numerous opportunities for niche players to develop successful products. These companies benefit greatly from the complementary nature of the technology industry. The collaborative technology industry as a whole was developed in part by these niche companies feeding off the explosive growth of computing power in the United States. The industry still depends heavily on complementary products, none more important than the network, in order to help promote the growth of the industry. While the presence of large companies like Xerox, Microsoft, and Netscape has given more credibility to the industry, it is still very vulnerable to the cycles of its complementary products. Different tools within the industry are also collaborative. As a result, firms may want to work together on design or implementation efforts to leverage these complementary skills for the benefit of both companies.

Standard setting: There are very few standards in the collaborative technology market. The Workflow Management Coalition (WfMC) has developed a number of specification for the transfer of data between process oriented workflow programs, and some initial standards discussions for group calendaring and scheduling software for the inter/intranet is still being debated by the IETF. However, standards for more robust tools like shared whiteboards are still several year from materializing.

Perhaps because of the youth of the industry, collaborative technology companies have not yet rallied around a single standard. This development is detrimental to the industry in many ways. First of all, companies are more reluctant to purchase a collaborative technology solution for fear of lock in to that provider. This concern is amplified by the fact that the technology may be incompatible with the technology being used by a potential partner, making it either useless or expensive to integrate with the alternative application.

Standardization does not, of course, mean commoditization. The standard that emerges will likely be one of the least common denominator, i.e. the set of tools or functions that all the warring parties could agree to support. Differentiating functions will be implemented on top of the standard, and the battle will move from pushing for a standard to delivering more robust functionality.

New relationships with partners: The collaborative technology industry needs to develop new relationships in order to push its way further along the adoption curve. Traditional relationships with hardware vendors will continue to be important, but the new technology requires new competencies to be successfully implemented. Many of these developer simply do not have those skills.

For example, companies may want to form alliances with consulting firms. The organizational changes required of companies implementing collaborative technologies is tremendous, and it is critical to the success of the industry that these early adopters have a successful experience. Developing relationships with consulting firms, particularly firms with core competencies in change management, will allow collaborative technology companies to play a proactive role in supporting the growth of their market.

For companies implementing collaborative strategies, they must be prepared for:

Organizational resistance to change: As much as individuals resist change, organizations resist them even more. Few things are as unnerving as change, particularly in the business environment. Most change is assumed for the worse, and fears of job security, changing reporting responsibilities, and loss of control are particularly high with changes involving collaboration. The fear and resistance should be met by open, honest communication that sheds light on the true nature and intent of the proposed changes

Organizational restructuring: With the fear of change relieved, companies must then face an even greater challenge: managing the entire spectrum of organizational changes required to create an environment supportive of collaboration. More then just the implementation of new technologies and procedures, collaborative technologies require a rethinking of the entire organizational structure. It is important to note here that while these changes sound ominous, they are in fact quite healthy for the organization (if perhaps potentially painful). Done correctly, a company emerges from these changes more focused and more competitive in its market.

Regulatory actions: The first way is through possible regulatory acts related to the network. These acts are most likely to take the form of regulatory measures intended to support the development of a network that is better suited for symmetric transfer of information, to achieve universal service of this w network, or to regulate the use of the existing network