Helping Companies Collaborate

1. Helping Companies Collaborate Denis Kearney 13th October 2005 Istanbul

2. Topics Covered • Overview of SMEexcel project • Survey of user needs • Assessing Organisational Readiness – the Synergy / Maturity model • Collaborative Process • Next Steps • Summary

3. What is SMEexcel?

4. Problem How to encourage SMEs to embrace collaboration as a key tool for competitiveness

5. SMEexcel Concept Learn ‘How to Collaborate’ Develop Group Competencies Manage Collaboration Implement Business Processes Sustain the Partnership New Business Through Collaboration Review Organisation Goals Identify Strategic Assets Develop Individual Competencies Identify Opportunities Seek out RFQs Deliver Order-winning Proposals Manage Customer Expectations

6. Example

7. Interacts with Initiates Leads Participates in Coordinates co-delivery of ... ... Standards Standards Shares, ICT platform ICT platform collaborates using Procedures Procedures Support delivery of Prepares / agrees Organisation Relationships Goes to Customer Customer Enterprise Enterprise (legal entity) (legal entity) Implements, complies with & uses Product Product Collaboration Network VE Network or service or service

8. Partnership

10. Survey of User Needs

11. SMEexcel Survey • Carried out over 5 countries – Ireland, Scotland, Poland, Turkey and the Czech Republic • Follow up Focus Expert Group assessment in Ireland

12. How Important are Networks to you? 65% 25%

13. Survey Findings –What makes you more Competitive

14. Barriers to Success

15. Why would you collaborate?

16. What do you want from others?

17. Summary of Survey Findings • Marketing and particularly Sales, are the priority of most SMEs • “What’s in it for me?” – must see early return • “Show me where it was done” • Collaboration is important for companies that want to grow • Prefer Market Pull rather than Network Push • Trust and IP are important issues • SMEs tend not to strategise, particularly in the marketing arena • Individual skills training not a priority. Business Capability skills for the organisation are • The jargon is a turn-off – keep it simple

18. Are you Ready to Collaborate?

19. Optimising (5) Fully competent and able to demonstrate leadership Standardised (4) Well understood. Good competency and application Defined (3) Some understanding. Basic capability to apply Embryonic (2) Basic Understanding of requirements Not able to apply Initial (1) Unpredictable or Does not exist Synergy Model – Maturity Scale Operational Synergy Strategic Synergy Cultural Synergy Commercial Synergy

20. Maturity Assessment

21. Crawl before you Walk!

22. The SMEexcel Collaborative Process

23. ATTRACTION Gate 1 IDENTIFICATION Gate 2 FORMATION Gate 3 IMPLEMENTATION Gate 4 Gate 5 EVALUATION The Collaboration Process

24. Company A Company B Company C Driver for Collaboration (Market opportunity, Product Opportunity, etc.) N Interested in Determine Collaboration Individual Competencies and Needs Y Sort out basic Consortium Building Issues Y Determine Overall Other Source additional Competencies and Competencies Companies Needed? Gap N Integrate New Members (if necessary) Set up Business Set up Structure Set up Management Plan, and Responsibilities Targets/Metrics, Systems Information Systems Manage the Collaborative Audit the Process Project Review Performance and Adjust as necessary Repeat

25. Elements of Attraction Awareness Cost Benefit Analysis Case Studies

26. Checklist for Attraction • Do you understand the potential benefits of collaboration to your organisation • Do you understand the commitments that have to be made and the costs involved in collaborating • Do you understand the time / duration of a venture • Do you understand any IP and other issues involved • Are you aware of how it may impact the ‘way things are done around here’ – i.e. sovereignty, decision making etc. • Do intermediaries understand how to encourage client companies to collaborate • Do intermediaries understand how to support collaboration among client companies

27. Elements of Identification • Partners strengths and weaknesses • What new-value the collaboration is going to create • Each partners needs / objectives / motivation for collaborating • What value each partner will contribute • Are other partners needed

28. Core Competency The collective know-how of an organization that gives it a competitive advantage. This know-how is a result of learning that is driven by business strategy and built through a process of continuous improvement and enhancement that may span a decade or longer. (Grady, Successful Software Process Improvement) • Are you Good (very good) at it? • Is it Difficult for others to Replicate / Imitate / Copy? • Is it Valued (highly) by the Customer? An area of specialised expertise that is the result of harmonising complex streams of technology and work activity (Prahalad &Hamel, Havard Business Review)

29. Honda - engine design and manufacture • lawn mowers • cars • trucks • snow blowers Example

30. Competencies Capabilities Competencies Core Competencies What we can do What we are really What is difficult to good at doing replicate E.g. CSM E.g. CSM Strategy development Strategy development • • Supply chain management Supply chain management • • Supply chain management Supply chain management • • Performance measurement Performance measurement • • MRP/ERP MRP/ERP • • ISO9000 ISO9000 • • Collaborative enterprise dev. Collaborative enterprise dev. • • Strategy development Strategy development • • EFQM EFQM • • Change management Change management • • Performance measurement Performance measurement • • Six sigma Six sigma • • BPR BPR • • Kaizen Kaizen • • Benchmarking Benchmarking • • MRP/ERP MRP/ERP • • Six sigma Six sigma • • Strategy development Strategy development • • Collaborative enterprise dev. Collaborative enterprise dev. • • Performance measurement Performance measurement • • Change management Change management • • Product development Product development • • Innovation Innovation • • IT Strategy IT Strategy • • BPR BPR • • Benchmarking Benchmarking • • SPC SPC • • Collaborative enterprise dev. Collaborative enterprise dev. • • Change management Change management • •

31. Opportunities!What Opportunities?

32. Business Opportunities Ansoff Growth matrix

33. Assessment of Opportunities H RISK • Assess the identified ‘Opportunities’ in relation to Risk and Gain. • Use circles of different diameter to signify the projected investment to realise each opportunity. • Risk = Likelihood of occurrence X Impact X Ability to take advantage L Revenue /Year €,000 (steady state) L H

34. RISK/BENEFITS ANALYSIS High Don’t do it Collaborate RISK Do it yourself Is it worth it? Low High Low GAIN

35. Checklist for Identification • Has a company or group of companies identified a potential business opportunity for collaboration? • Have individual members of the group assessed their readiness for collaboration? • Has each member identified how the collaboration will benefit him or her? • Is a facilitator needed to assist the group in the next stages? If so has a facilitator been invited to join the group?

36. Formation Stage

37. Elements of Formation Confidentiality / NDA Project Management Methodology Stakeholder Analysis • Integration between partners • Info Systems • Health & Safety • Environmental Mgmt • Quality Mgmt • Financial Systems Business Plan Risk Analysis IPR Agreement Collaboration Agreement

38. 2008 Collaborative Partnership Business Ambitions • Objs for Customers • Objs for Capabilities Objs for Technology Objs for Employees Owner: Owner: Owner: Owner: Owner: Projects for Customers Projects for Capabilities Projects for Technology Projects for Employees Project T1 Project T2 Project E1 Project E2 Project Cu1 Project Cu2 Project Ca1 Project Ca2 Project T3 Project E3 Project Cu3 Project Ca3

39. 2008 Portal House Partnership • Business Ambitions • 1 m€ revenues within 3 years • 60% of revenue to be generated in new sectors (medical devices?) • Objs for Customers • To provide full turnkey solutions within 6 months • Objs for Capabilities • Clean room assembly • Objs for Technology • To develop an integrated IT management system by end of 2006 • Objs for Employees • To double the return per employee by 2006 To be the world’s best at providing niche customer focused design and prototyping support services to industry in the Electronics and Medical sectors. We will provide Innovative solutions utilising our technical and business competencies in a collaborative environment. Implement Innovation Culture Owner: F. Keohane Innovative Culture Client Management Process Owner: ??? Market Focussed Web-based Project Management process Owner: ??? Collaborative Management ISO9000 procedures generation / management Owner: ??? Controls and Procedures Implement Lean / 6 Sigma culture Owner: F. Keohane Continuous Improvement Env Projects for Customers Projects for Capabilities Projects for Technology Projects for Employees Project T1 Project T2 Project E1 Project E2 Project Cu1 Project Cu2 Project Ca1 Project Ca2 Project T3 Project E3 Project Cu3 Project Ca3

40. Checklist for Formation • Business plan including metrics and targets signed off • Benefits to each partner estimated • Reward and recognition arrangements for people agreed • Management structure, accountabilities, review mechanisms and conditions for termination in place • Systems for sharing information / allocating resources • Overall control policy agreed • IPR implications (if any) known • Auditing process agreed for the initial stages • Financial arrangements between partners – investment, bank accounts, invoicing, spending authorisation etc.

41. Elements of Implementation Monitoring & Control Processes Performance Metrics Resource Coordination Business Process Management

42. Checklist for Implementation • Performance metrics agreed and implemented • Resources from partners integrated • Information systems from partners integrated • Collaboration review mechanism in place and functioning • A decision-making process established and functioning • Targets being achieved and any shortfalls being addressed • Effective leadership • Is each partner achieving benefits from the collaboration?

43. Next Steps

44. Next Steps • Test the SMEexcel methods • Develop On-line support tools • Localise for Turkey, Poland and the Czech Republic • Launch the final methodology • License the methodology throughout Europe

45. Summary • Overviewed SMEexcel project • Describer the results of our Survey • Described the Synergy / Maturity model • Outlined the steps in the Collaborative Process

46. Thank You Denis Kearney Supply Network Shannon 13th October 2005