Introduction ... 3
Executive Summary ... 3
Toward Collaboration Business Models ... 4
Social Networks and Mobility as Key Collaboration Enablers... 8
Management of Social and Mobile Technologies Still Maturing ... 10
Collaboration and Social Networking Challenges ... 13
Social Networking, Mobility on the Rise ... 14
Case Study: Baxter International Inc ... 17
About Dassault Systèmes and Microsoft ... 18
INTRODUCTION
In December of 2013, the Manufacturing Leadership Council partnered with Dassault Systèmes and Microsoft Corporation to research and report on manufacturers’ attitudes and plans regarding the use of enterprise social networks and mobile technologies to enable real-time collaboration.
Based on a survey of members of the Manufacturing Leadership Community, the report was intended to explore the extent to which manufacturers believe enterprise social networks and mobile technologies support real-time collaboration, where manufacturers stand today in implementing these technologies, and which processes and functions will be most impacted by these technologies.
Among the specific areas of inquiry were:
• What is the status and extent of enterprise social networking use in manufacturing companies? • What are practitioner goals and objectives with enterprise social networking?
• What stage of maturity are manufacturers at with regard to enterprise social networking implementation? • In which functional areas of the manufacturing enterprise (e.g., product design, supply chain, production,
service and support, etc.) is enterprise social networking having the greatest impact?
• What cultural, organizational, and technology challenges may accompany the use of enterprise social networking?
• How are these enterprise social collaboration tools and methodologies impacting the worker experience and, ultimately, the experience of customers?
• What benefits or results have been achieved from investments in enterprise social networking?
The survey was developed by the Manufacturing Leadership Council’s Editorial Department and was fielded to the Manufacturing Leadership Community audience, including members of the Manufacturing Leadership Council, in January and February of 2014. The survey received 129 completed responses, primarily from manufacturing executives with C-level, vice president, and director-level titles. Manufacturing verticals accounting for the most responses included discrete manufacturing, process manufacturing, utilities /chemical/energy, aerospace /defense, and automotive.
EXECUTIVE SUMMARY
Traditional, top-down, command-and-control organizational structures are gradually giving way to collaborative business models as manufacturers are being pushed to respond quickly to – and even anticipate –rapidly changing business conditions resulting from complex global supply networks, less predictable demand, escalating customer expectations, and the need to accelerate new product innovation.
For many manufacturers, the transition to a collaborative business model is a work in progress, with not insignificant bumps along the way. Many, in fact, are struggling to translate their aspiration for improved collaboration and employee communication into consistent operational and competitive improvements.
But manufacturers believe that the transition to increasing the level of collaboration will be enabled in no small way by their adoption of emerging technologies, particularly enterprise social networking and mobile platforms. Manufacturers are particularly optimistic about the positive impact enterprise social networking can make on their sales, marketing, service, and support functions. Including the impact these changes will have on the experience that these various individuals will have on the job. They see somewhat less potential for enterprise social networking technology to positively impact plant floor production environments.
While manufacturers are positive about the potential of enterprise social networking and mobile tools, many struggle to justify investments in these emerging technologies. And most have yet to take a consistent, strategic approach to planning or funding enterprise social networking initiatives.
But maturity is likely to come as adoption expands, along with expectations. While many manufacturers continue to be concerned with issues such as data security, they also understand that, increasingly, their customers and next-generation employees expect to communicate and collaborate using enterprise social networking tools. In fact, these next-generation workers expect these tools to be as central to their work experience as a computer. As a result, manufacturers must plan to significantly increase spending on social and mobile technologies if they expect to “woo” the younger generation to take the place of retiring Baby Boomers.
TOWARD COLLABORATIVE BUSINESS MODELS
Manufacturers Embrace Collaboration
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Very important Somewhat
important Not at all important Don’t know 18% 77% 4% 2%
Q: How important is employee collaboration and communication to the execution of your company’s business strategy?
Manufacturers are clearly striving to embrace collaborative business models and enhance employee collaboration, with a very large majority, 77%, describing these goals as very important. These goals are particularly strong among manufacturers in automotive and aerospace and defense industries, sectors that operate with complex global supply networks and that face rising customer expectations.
The Need to Become More Customer-Centric Drives Collaboration Push
Improving communication and information sharing Enabling the company to work together more effectively Improving our understanding of customer preferences and trends
Improving product innovation
Improving knowledge management
Improving financial performance
Attracting younger, tech savvy employees
0% 20% 40% 60% 80% 100% 87% 84% 84% 74% 69% 45% 74%
Q: Rate the importance of the following enterprise collaboration goals and objectives for your company. (Important and very important)
An important factor driving the broad embrace of collaboration is the need on the part of manufacturers to understand and respond to evolving customer preferences and trends. By enhancing communication and knowledge-sharing across and beyond the enterprise, manufacturers believe their organizations can become more customer-centric and, ultimately, more competitive by providing an end-user experience that is more personal, targeted and in alignment with the expectations of today’s consumers. They also believe they can leverage collaboration to accelerate new product development while, at the same time, increasing efficiency and reducing waste.
“If manufacturers can improve collaboration internally based on customer trends such as demand patterns, they can begin to make better decisions on which products to bring to market and, ultimately, they can become more competitive,” says Chris Will, chief technology officer, DELMIA at Dassault Systèmes. “Senior executives are asking, ‘How can you help me introduce new products quicker, faster, better,’ and collaboration is a big part of the answer.”
At the same time, as manufacturers strive to accelerate and expand operational improvement programs, they see a corresponding need to increase collaboration to improve organizational effectiveness.
Real -Time Collaboration Today
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%A critical need A significant need A somewhat
important need Not at all important
Total sample Aerospace & defense Automotive Discrete manufacturing Other industries Process manufacturing
Energy, chemicals & utilities
28% 27% 37% 19 % 29% 26% 9% 17 % 33% 38% 29% 22% 3% 0% 0% 0% 6% 7% 4% 26% 25% 43% 64% 58% 30% 38% 36% 48%
Q: How would you characterize your company’s need for real-time collaboration?
In particular, manufacturers–especially those in the automotive and aerospace and defense sectors–say their companies have a significant or critical need to enhance real-time collaboration. In today’s manufacturing enterprises, such real-time collaboration often takes the form of cross-functional communication aimed at enabling agility and improved responsiveness to customers. Supply chain managers, for example, may collaborate in real time with plant managers to rapidly adjust production schedules as soon as supply changes or disruptions are detected. These types of collaborative working experiences are becoming increasingly common and expected.
Real-Time Collaboration Will be More Important in the Future
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Substantially more
important than today important than todaySomewhat more About the sameas today Less importantthan today
Total sample Aerospace & defense Automotive Discrete manufacturing Other industries Process manufacturing
Energy, chemicals & utilities
45% 55% 47% 12 % 36% 50% 67% 0% 0% 0% 0% 0% 1% 2% 39% 36% 33% 33% 62% 64% 28% 16% 9% 0% 20% 25% 0% 20%
Totals do not always add up to 100% due to rounding
Q: How important do you expect real-time collaboration will be to your company in the next two - to - three years?
And most manufacturers predict that real-time collaboration will become more important tomorrow than it is today. While manufacturers in process, chemicals, and energy-related industries seem to be lagging somewhat on collaboration, even they say real-time collaboration will become more important over the next few years.
Complexity, Customer Expectations Underlie Need for Real -Time Collaboration
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increased operational
complexity Rising customerexpectations faster productThe need for innovation
Competitive
pressures Extended globalsupply chains
Total sample
Believe social networks are important real-time communication enablers Do not believe social networks are important real-time communication enablers
71% 77% 67% 48% 57% 41% 70% 85 % 57% 66% 75% 58% 63% 75% 52%
Q: Rate the influence of each of the following business issues on your organization’s real-time collaboration strategy and development. (Percentage that answered “influential” and “very influential”)
The need to respond to increased operational complexity–in the form of longer, more global supply networks; expanding product and part variety; and increasing product customization–is driving manufacturers’ focus on being able to effectively collaborate, both internally and externally, in real time. Rising customer expectations, the need to accelerate new product innovation, and increasing competitive pressures are also significant factors.
SOCIAL NETWORKS AND MOBILITY AS KEY COLLABORATION ENABLERS
Social Networking’s Role in Real-Time Collaboration: Big and Growing
Not important or don’t know Important
77%
23%
Q: Are mobile devices, social networks, and collaborative applications important enablers of real-time communication in your organization today?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 52% Much more important More important As important Less important 9% 0% 39%
Q: How important will these be in the next two to three years? (Of those who answered ‘Important’)
A large majority of manufacturers believes that enterprise social networking and mobile technologies already are important enablers of real-time collaboration. And, perhaps not surprisingly, those who feel these technologies are important enablers today also believe their role in fostering real-time collaboration will only increase in the near future.
Messaging and Meeting Apps are Most Heavily Used
Instant messaging GoTo Meeting Microsoft SharePoint Twitter Google Apps Internally developed application Salesforce Chatter Yammer Jive IBM Open Connections Other 51% 46% 36% 39% 34% 16% 11% 3% 2% 43% 0% 10% 20% 30% 40% 50% 60% 49%Q: Select all of the enterprise networking platforms used in your company today.
Among enterprise social networking apps most heavily used by manufacturers today, messaging and online meeting applications come out on top. This is not surprising, given manufacturers’ need for rapid, real-time communication among stakeholders who are often widely disbursed. Twitter is also widely used, as are internally developed social applications. While automotive manufacturers are more intense users of instant messaging today, aerospace and defense manufacturers have more actively embraced collaboration using the Microsoft SharePoint platform.
Sales, Marketing, Support Functions Receiving Biggest Bang from Social, Mobile
Technologies
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sales andmarketing Service andSupport Supplychain Productdesign Production Other areas ofthe business
Total sample Aerospace & defense Automotive Discrete manufacturing Other industries Process manufacturing
Energy, chemicals & utilities
77% 64% 80% 93% 88% 72% 71% 18% 67% 43% 47% 44% 43% 39% 29% 18% 21% 31% 30% 42% 28% 45% 31% 42% 23% 38% 29% 28% 45% 67% 64% 74% 62% 73% 92% 36% 44% 60% 58% 69% 22% 50%
Manufacturers overwhelmingly expect social and mobile technologies to benefit sales, marketing, service, and support functions over the next two-to-three years. Manufacturers expect supply chain, product design, and production functions to receive fewer, though still significant, benefits. Automotive manufacturers appear particularly optimistic about the benefits that social and mobile technologies will bring to their service and support activities, a reflection of the success car companies have had providing service and support through in-vehicle communications systems such as Ford’s Sync and GM’s OnStar.
Meanwhile, energy, chemicals, and utilities companies expect social and mobile technologies to significantly impact sales and marketing functions, while other process manufacturers expect these technologies to benefit supply chain operations.
MANAGEMENT OF SOCIAL AND MOBILE TECHNOLOGIES STILL
MATURING
Senior Manufacturing Leaders Still Pondering Business Value of Social Networking
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Leadership is still assessing the value of
social networking Leadership fully understands the value in greater collaboration and productivity Leadership doesn’t support social networking Don’t know 57% 11% 29% 3%
Q: What is the attitude of senior leadership today about the use of social networking technologies?
Although manufacturers say they value collaboration and see a link between real-time collaboration and social networking, senior manufacturing executives have yet to fully embrace the technology. Most are still assessing the value of the technology, while less than one-third fully understands the value. More than 10% don’t support it.
Budgeting for Social Tends to be Informal
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% We have a dedicatedsocial collaboration budget We do not have adedicated social collaboration budget
Don’t know
Total sample One to less than 100 employees 100 to less than 1,000 employees 1,000 employees or more
44% 29% 43% 54% 47% 65% 50% 33% 9% 6% 7% 13%
Q: Does a formal budget exist in your company for enabling enterprise social collaboration across enterprise social networks? (Budgets can include fully or partially dedicated personnel, hardware, software or services.)
Manufacturers today are evenly split among those that have a budget dedicated to social and technologies and those that do not. Larger manufacturing enterprises more often have dedicated budgets, while smaller enterprises more often tend to treat these investments in an ad hoc fashion.
And Most Lack a Consistent ROI Approach
20% 30% 40% 50% 60% 70% 80% 90% 100%
Total sample One to less than 100 employees 100 to less than 1,000 employees 1,000 employees or more
42% 58% 43% 31% 24% 19% 14% 35% 16% 10% 23% 15% 18% 13% 20% 19%
Consistent with the ad hoc budgeting approach that many manufacturers are taking toward social technologies, few today apply a consistent, documented methodology when evaluating the ROI of investments in these technologies. The largest group of manufacturers – particularly smaller enterprises – allow individual business units to evaluate ROI on a case-by-case basis.
Responsibility for Social Strategy is Inconsistent
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Corporate CIO Varies according
to project marketing managerSales and Business unitmanager business unit CIODivision or Don’t know
Total sample Aerospace & defense Automotive Discrete manufacturing Other industries Energy, chemicals & utilities
Process manufacturing 33% 27% 30% 43% 38% 30% 26% 17% 12% 6% 10% 14% 9% 6% 9% 14% 0% 10% 8% 2% 4% 9% 8% 0% 0% 0% 7% 27% 42% 21% 24% 12% 40% 17% 0% 19% 10% 8% 44% 28% 7% 27%
Q: Which one individual at your company is most responsible for planning and implementing enterprise social networking strategy?
Manufacturers have not reached a broad consensus on where in the organization responsibility for setting and executing social and technology strategy should reside. While a significant percentage believes the office of the corporate CIO should hold responsibility for social and mobile strategy, others–particularly in discrete manufacturing verticals–believe this responsibility should be held at the project management level. And, among process manufacturing companies, a significant percentage believes this responsibility should rest with sales and marketing management.
COLLABORATION AND SOCIAL NETWORKING CHALLENGES
Wide Gap between Collaboration Goals and Achievement
Improving communication and information sharing Enabling the company to work
together more effectively Improving our understanding of customer preferences and trends
Attracting younger, tech savvy employees Improving financial performance Improving knowledge management Improving product innovation
87% 84% 43% 40% 74% 45% 34% 74% 34% 40% 69% 26% 84% 43% 0% 20% 40% 60% 80% 100%
Believe this goal is important or very important Rating of effective and very effective
Q: Rate the importance of the following enterprise collaboration goals and objectives for your company. (Important and very important)
Q: Rate the effectiveness of your enterprise collaboration strategy in attaining each of the following goals for your company. (Effective and very effective)
While manufacturers agree on the importance of collaboration and the role of social networking in supporting collaboration, large gaps remain between the benefits they hope to achieve from collaboration and the effectiveness of their organizations today in achieving those benefits. From improving communication and information-sharing to improving their understanding of customer preferences and trends, the benefits of collaboration seem to be eluding manufacturers across the board today. The inability of existing corporate cultures to fully support collaboration certainly accounts for part of this shortfall. But manufacturers’ incremental embrace of social networking tools to date may also be a factor.
Collaboration is Not Strategic for Most
28% Strategic, on-going approach No formal approach Largely experimental approach 35% 11% 26% Tactical, occasional approach
At the same time, manufacturers are still stopping short of approaching the migration to collaborative business models as an ongoing and strategic undertaking. Less than one-third describe their approach to collaboration as strategic, while most say it is tactical, experimental, or informal.
Enterprise Social Networking Concerns Linger
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Understanding cost
and benefits Data security Understanding the bestuses of technology
71% 64% 70% 62% 93% 67% 75% 71% 73% 83% 67% 81% 71% 65% 68% 55% 67% 70% 75% 71% 67%
Total sample Aerospace & defense Automotive Discrete manufacturing Other industries Process manufacturing
Energy, chemicals & utilities
Q: What is the most significant challenge you see when considering an investment in enterprise social networks?
Manufacturers also continue to perceive some significant risks associated with the use of social networking to enable collaboration. Cost/benefit and data security issues top the list of manufacturer concerns. And manufacturers appear to be struggling to understand the most promising applications of social networking technologies. But concerns about the impact of social networking on company image and productivity appear to be less pronounced.
SOCIAL NETWORKING, MOBILITY ON THE RISE
Social Networking an Important Enabler of Collaboration in the Future
Less important than today About the same as today 43% 10% 1% Somewhat more important 46% Substantially more important:
Q: How important will social networking and mobility be as enablers of real-time collaboration in the next two to three years?
Despite the challenges manufacturers face moving to collaborative models and their lingering concerns regarding the implementation of enterprise social networking, a substantial majority believe social, along with mobile technologies, will be increasingly important enablers of real-time collaboration over the next two to three years.
Social Networking Investments Slated to Increase
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increase by
over 10% Increase byunder 10% Stay the same Decrease byunder 10% Decrease byover 10% Don’t know
Total sample One to less than 100 employees 100 to less than 1,000 employees 1,000 employees or more
29% 35% 39% 19% 23% 19% 23% 26% 28% 32% 23% 30% 1% 0% 2% 0% 0% 0% 0% 0% 19% 13% 14% 26%
Q: How much, if at all, will your company’s spending on mobile devices, social networks, and collaborative applications change over the next year?
Most manufacturers say they will be increasing spending on social networking and mobility platforms over the next five years, and almost one-third say they will be doing so by over 10%. Small and mid-size companies appear to be increasing spending faster than larger manufacturing enterprises.
CONCLUSIONS AND RECOMMENDATIONS
Manufacturers are clearly moving toward collaborative business models, and they perceive enterprise social networking and mobility technologies as key enablers, particularly of real-time collaboration. This transition will impact the worker experience, how work gets done, and how issues are resolved.
But manufacturers’ use of enterprise social networking and mobile platforms as critical enablers of collaborative business models is a work in progress. Many are struggling to understand and quantify the benefits, and to develop a model for managing the technologies in a consistent and strategic manner. Many also have yet to enlist senior executives as enthusiastic sponsors of initiatives that leverage enterprise social networking and mobile technologies.
“Overall, manufacturers are already aware of the potential benefits of using enterprise social networking tools and, as leaders in every industry use these tools to gain a competitive edge, it won’t take long for their competitors to master these technologies and treat them as strategic assets that they must manage with the appropriate processes,” says Dassault Systèmes’ Will.
In this way, enterprise social networking and mobility technologies will enable manufacturing companies to close what today is a wide gap between the benefits many hope to receive from collaboration and current levels of achievement.
In the meantime, manufacturers should take the following steps:
• Align enterprise social networking and mobility strategy with business strategy, and • Take a consistent approach to managing and cost-justifying investments;
• Seek out and develop a set of best practices in the day-to-day management of enterprise social networking activities;
• Explain the benefits of mobility and enterprise social networking in terms that senior leaders can understand and support; and
• Think beyond sales, marketing, and service when deciding where and how to leverage the power of enterprise social networking and mobility technologies.
CASE STUDY: BAXTER INTERNATIONAL INC
The Rising Social Networking Tide at Baxter Healthcare
When Baxter International Inc.’s Healthcare division first launched instant messaging seven years ago, it was a low-key initiative carrying low expectations.
“It was an icon that appeared on the desktop one day, and the message was, ‘Use it if you want to,’” says Drew Holmes, director of engineering and compliance in Round Lake, Ill. “The perception was that this was like texting, and, while we’d get some business benefit, people would use it to text about lunch.”
But, in the years since, instant messaging has become an important social networking tool used by most Baxter Healthcare employees to communicate and collaborate across continents and time zones. Holmes estimates that over 70% of Baxter Healthcare employees use IM. He says he typically has multiple IM conversations going on at once. Next, the company plans to add screen-sharing and multi-lateral IM conversation capabilities.
As IM has taken hold, it has been joined at Baxter by several other enterprise social networking applications. And, as these applications have become increasingly embedded in the Baxter culture, the company has begun surrounding at least some of them with more formal management structures.
Besides instant messaging (Baxter uses Microsoft’s Lync platform), enterprise social networking applications in wide use at Baxter now include an online talent management application–internally called MySite – that employees can use to locate internal subject-matter experts and engage with them. The company also has rolled out a project collaboration application – based on Microsoft SharePoint – that allows team members to exchange documents, schedules, and other materials.
And, most recently, the company launched what it internally calls Spark, an app that Holmes describes as “our Facebook.” Baxter is using Spark to encourage and nourish internal communities to develop around important business and cultural issues such as support for women in the workplace, risk management, and bioscience knowledge management.
Baxter doesn’t tend to impose many restrictions on the content that can be shared over these social networking platforms because they are not considered critical systems of record.
But the company is beginning to place more formal structures around the deployment and management of social networking applications. The Spark Facebook-like social platform, for example, was rolled out as a formal program with a review committee, and employees have been encouraged to take advantage of it.
“The perception is that there is value there, and it’s being taken more seriously,” says Holmes.
And, says Holmes, there’s another reason deployment of social networking apps is being taken more seriously: the younger generation of Baxter employees expects them to be there.
ABOUT DASSAULT SYSTÈMES AND DELMIA
Dassault Systèmes, the 3DEXPERIENCE Company, serves 190,000 customers across 140 countries, providing virtual universes for sustainable innovation. Dassault Systèmes’ DELMIA brand offers products that connect the virtual and real worlds. As part of DELMIA, the Apriso product portfolio helps manufacturers transform their global operations to achieve and sustain operational excellence. Learn more at www.apriso.com, visit our blog at apriso.com/blog, or follow us on Twitter at @Apriso.
ABOUT MICROSOFT CORPORATION
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
ABOUT THE MANUFACTURING LEADERSHIP COUNCIL
The Manufacturing Leadership Council, a unit of Frost & Sullivan, is the world’s first member-driven, global business leadership network dedicated to senior executives in the manufacturing industry. The Manufacturing Leadership Council’s mission is to help senior executives define and shape a better future for themselves, their organizations, and the industry at large. The Council produces an extensive portfolio of leadership networking, information, and professional development products, programs, and services, including the Manufacturing Leadership Community website, an online global business network with over 6,700 members worldwide; the Manufacturing Leadership Council, an invitation-only executive organization of over 100 members; the annual Manufacturing Leadership Summit; the Manufacturing Leadership Awards, celebrating industry achievement; and the thought-leading Manufacturing Leadership Journal. For more information, visit www.MLCouncil.com.
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