Enabling Group Working Between Enterprises

Paper presented to GroupWare '95 Europe Conference, London, 19-21 June

David Jennings

Contents

1. Introduction
2. Business and Economic Context
3. Technical Context
4. Social Context
5. Conclusions
6. References

Introduction

In this paper I aim to identify some of the particular requirements for GroupWare that could be used to support group working across organisational boundaries. In doing this I am shifting towards a different focus from that taken in much GroupWare development to date. I argue that, in looking at group working between enterprises, the main areas of concern are:

• small and medium sized enterprises (SMEs), rather than large corporates
• independent knowledge workers, rather than clear chains of command
• emphasis on relationships, rather than business processes or workflow.

This shift of focus highlights some issues and distinctions while it blurs others. The process of forming groups between enterprises moves to centre stage, together with the cultural issues of establishing shared understandings in group working, and the need for trust, commitment and cooperation between group members. The distinctions between teleworking (working for a remote employer or customer) and "distance teamworking" are blurred. As archipelagos of association develop inside and across enterprise boundaries, those boundaries start to blur. The identities of the enterprises themselves become multiple and up for negotiation.

Typical examples include the associations that build up when SMEs regularly come together in consortia to compete with larger enterprises, or when they build relationships with distributors in foreign markets. The further development of group working between multiple enterprises could usher no less than a redefinition of trading and partnership relations in market economies. In the next sections, I map the convergence of factors that may accelerate, or hinder, this development.

Business and Economic Context

Public policy sees SMEs at the heart of economic growth in the developed economies (see recent white papers from the European Commission and the UK's Department of Trade and Industry). For example, the EC identifies the strengths of SMEs as their presence on expanding new markets and their flexible internal organisation (EC, 1994, p.85).

Recent research suggests that SMEs usually work more as a "web" of interconnected units, rather than as individual "motes" (Hunt, 1994). These enterprises are often orchestraters of power and agents of change, by working as gatekeepers to networks of influence or by clustering together to form "project firms". In the pharmaceutical sector, for example, large companies are increasingly rare, as they source their research work from clusters of SMEs.

Globalisation of economies is another key driver for building associations of SMEs: terms like the "global SME", the "extended" or the "virtual enterprise", are becoming more common.

Some SMEs are aiming to develop new associations and relationships with other enterprises as part of a strategic approach to repositioning themselves in new or fast-moving markets.

Nevertheless, we should not expect the development of these webs and archipelagos of SMEs to be a smooth or an even path. Within the various small business economies, there are noticeable cultural differences which could either support or undermine this networking and collaboration. In the UK and Ireland small business startup and accreditation is fairly deregulated, while on the continent startups often have to get a formal license. This license then gives you membership to large institutional networks of businesses (often with tens of thousands of regional members) which can be an entry card to group working with other enterprises.

These kinds of network are starting to spring up with increasing regularity in the UK. In South Yorkshire there are several sector-based SME networks, for example in the materials sector, in medical instruments and in the cultural industries. These all work slightly differently, involving different types of investment and return for the S
SME members, and they are complemented by cross-sector face-to-face networking events, organised by the likes of Sheffield Small Business Club. Each model has different strengths and weaknesses, and these could be further amplified or moderated by different models of technological development.

Technical Context

Until relatively recently the telecommunications infrastructure which might support group working between enterprises has been mainly controlled by large organisations, including multinational corporations and government departments (Hepworth, 1989). The Internet, CompuServe, CiX and related developments are pointing the way to how this might change.

These developments provide a number of services which can be used to support group working between enterprises:

• electronic mail
• electronic meeting places ("private" forums, newsgroups etc.)
• bulletin boards (for "public" notices)
• information libraries.

These services constitute the main elements for what Horace Mitchell calls "Open Electronic Networking" (Mitchell, 1994), a concept which brings together the technological and interpersonal meanings of networking, and which I will explore more in the following section.

Demand for these services in specific sectors of SMEs is already running high, particularly in knowledge-based industries. A recent survey of SMEs in Sheffield's Science Park, Technology Park and Cultural Industries Quarter shows that over a third currently own the basic technology for open electronic networking and over 10% have ISDN connections. More particularly, nearly all the SMEs, with and without the existing technology, gave examples of their interest in further developments and possibilities for exploitation (Jennings, 1995).

It is a truism that technological developments in this field are extremely rapid, and it is not clear which direction all the developments are heading. The European-supported RITE Project (Regional Infrastructure for Telematics Europe) is developing a "Regional Teleserver" to support a range of generic applications to support SMEs in a virtual marketplace. The applications envisioned include third-party business services, a business information service, a skill registry and online marketing. These will be supported by core services:

• electronic mail
• X.500 directory services (akin to an electronic White or Yellow Pages, with sophisticated extra features)
• electronic data interchange (EDI)
• information retrieval
• transaction processing.

The development of information superhighways - switched broadband networks - has considerable potential to facilitate this inter-enterprise group working in the longer term. Steps towards this are being taken in the REGIS (Regional Information System) Project, which will use the ISDN and CATV infrastructure of two cable operators in South Yorkshire and Nottinghamshire to deliver data services to SMEs. However, exploiting the full potential of these developments will depend on at least two contingencies:

• achieving interworking between different network service providers at increasing levels of service sophistication (e.g. CompuServe initially offered email connectivity with the Internet; it has recently begun to offer Worldwide Web access; but a CompuServe member cannot take part in a CiX conference, or vice-versa)
  
• understanding what the next step-up is for services to support group working between enterprises, in order to move beyond the four basic Open Electronic Networking services listed above (e.g. to what extent, given the different issues involved, can the likes of document management, workflow and Lotus Notes applications be scaled up, or scaled out, to work between enterprises).

Social Context

Group working between enterprises has a different flavour and emphasis to group working within enterprises. Much of the discussion on group working inside enterprise centres on scenarios where the group and its leader can readily be identified. The focus is on building the team spirit of the group and enhancing leadership.

When working across organisational boundaries, it is more problematic to establish the team identity and the power relations within the team. The emphasis here is precisely about how to resolve the uncertainties of group membership and leadership. It is about building networks of influence and setting up deals as a prerequisite of task performance.

The politics of inter-enterprise group working can be more explicit because different group members acknowledge that they have different interests (whereas, in intra-enterprise groups, politics dare not speak its name). The key political issues are establishing confidence and commitment, getting the right gut feel that you can "do business together". Duke Ellington never let anyone play with his band until he had played poker with them first.

To sum up the differences between the two kinds of group working: within enterprises, the focus is on optimising performance through reengineering processes; between enterprises, it is on optimising alliances through reengineering relationships. Perhaps "cultivating relationships" would be a happier term.

What kinds of problems do enterprises face in cultivating these network relationships, and what kind of support might facilitate solutions? Some of the issues that entrepreneurial SMEs face are:

• how to identify potential partners
• how to run a check on potential partners to establish the benefits from an alliance, and whether you really can do business together
• how to assess the possible risks and downsides of alliances
• how to present yourself as a desirable partner to specific enterprises that would clearly be valuable for strategic alliances
• how to negotiate the terms of the alliance with regard to the balance of mutual aid and mutual trade
• how to get the right balance between spreading "ownership" and responsibility across an alliance of enterprises, and making responsibilities difficult to manage by being too dispersed
• how to establish as quickly as possible whether an alliance or collaborative proposal is going to be a dead-end.

Traditionally the means of addressing these issues has been a mixture of formal techniques - directories, databases and analysis - and of the informal - lunches, games of squash and intuition. These techniques have developed primarily in a face-to-face business culture. There remain major questions about how GroupWare can support and enable the development of group relationships as a prerequisite to the performance of group work.

The EBNET (European Business Network) project is starting to explore some of these questions in the context of international SME networking, where it is hoped that telematic links between enterprises can facilitate group working (Simmons, 1994). This consortium building should improve the business opportunities of all partners concerned, in circumstances where the travel required for face-to-face meetings would be so expensive as to make the consortium uncompetitive.

EBNET has looked to the role of a "network broker", to act as a trusted go-between and manage the relationships in group working. This broker may have a wider range of contacts than the other enterprises involved, and may themselves take part in a number of face-to-face meetings. However, by acting as the main conduit for the informal aspects of cultivating relationships, the broker aims to minimise costs overall and accelerate the process of moving to the "performance phase" of group work, which can be more easily supported by GroupWare links between enterprises.

Coordinate UK provides another example of aiming to minimise the need for face-to-face interactions and move as quickly as possible to a teleworking relationship. In this case Coordinate is seeking to provide third-party administrative and financial services via a network, to compete with local alternatives. The collaborations involved are thus between customers and suppliers, rather than consortium partners. The critical relationship-cultivating process is the establishment of a service level agreement to build confidence and commitment with customers.

Although interviews are known to be generally less reliable as employee selection methods than some other more formalised methods, employers still insist on face-to-face interviews at some point. It seems likely that there will generally be a similar tendency in group working between enterprises. Nevertheless, SMEs can expect to gain competitive advantage from getting the right mix between face-to-face networking and GroupWare support for collaboration.

Conclusions

Business, technical and social considerations are closely interrelated factors in the growth of group working between enterprises. As the technology currently stands, a firm commitment to partnership may itself require the collaborating organisations to standardise on a common provider of network services - and this may in turn influence what other enterprises are identified for further alliances.

There is a wide mix of factors that influence the growth of group working between enterprises: local and global; cultural and technological; economic and social. This means that we can expect growth in this area to be patchy, following several parallel, and potentially contradictory, paths. Similarly we should expect a wide range of GroupWare products aimed at supporting inter-enterprise working. It is unlikely that any of these will quickly become dominant.

References

European Commission (1994) Growth, Competitiveness, Employment - The challenges and ways forward into the 21st century (White Paper) . Luxembourg: Office for Official Publications of the European Communities.

Hepworth M (1989) Geography of the Information Economy . Belhaven Press.

Hunt D (1994) Telematic Trading: Towards the Global SME . Paper presented at Babson College, June.

Jennings D (1995) Science and Media Electronic Networking: Opportunities and Demand for Growth. David Jennings Associates.

Mitchell H (1994) "Networking" and "Open Electronic Networking" (Version 3, September 1994) . Management Technology Associates.

Simmons S (1994) Netting the Small Fry: Commercial networking for small business . European Journal of Teleworking, Vol 2 No 3.

Copyright © David Jennings