Businesses need to boost collaboration

Businesses have to innovate in order to grow, but less than half of new products launched by companies in the last three years have been a success. Companies need to collaborate much more with their customers, and IT is a key tool for doing this.

These were the main findings of the Collaboration for Innovation Study compiled by CapGemini, the consulting firm.

The firm found that the priority for manufacturing companies is moving away from cost cutting and towards new product development and innovation. To do this, companies are turning more towards collaborative business models, and are trying to involve customers and suppliers more closely in new product development.

CapGemini found that half of the companies it surveyed now use external experts as part of their product development process. As many as 79 per cent said they were involving suppliers more in the innovation process.

But businesses still need to do more to involve customers in new product development, a measure the consultants believe is critical to success. In half of the companies surveyed, just one in five said new products started out as ideas generated or shaped by customers.

None the less, almost four out of five companies reported that they are making more use of IT-based collaboration tools in new product development. Web 2.0 technologies, such as social networking sites and the virtual world, Second Life, are increasingly important for driving both collaboration and innovation.

Manufacturers should more proactively seek out and pursue opportunities for leveraging IT-based collaboration technologies, including Web 2.0," said Udo Lange, principal, innovation and lifecycle management at Capgemini. Collaborative networks and virtual communities [help businesses] to gain closer intimacy with their customers and so achieve higher innovation success rates.

"By using these types of technologies, manufacturers are better able to work together with customers to shape products to their needs and identify unpromising projects earlier in the pipeline."

Manufacturers are also turning to IT in other areas, such as a system developed at Portsmouth University that predicts when machines fail.