1. Profitable Collaboration for SMBs
Executive Summary
Collaboration has many different definitions, but whatever your definition, applying a few principles found in this paper can
make small and medium-sized businesses (SMBs) achieve profitable collaboration both internally and externally with clients.
Collaboration is about relationships and interaction, and a holistic view of collaboration (People, Process and Technology) is
the most successful way to look at enabling better client relationships. New Collaboration 2.0 tools that are cloud-based offer
great options for SMBs with little or no up-front costs, and these browser-based applications are available on almost every
platform.
This paper looks at three rules for good collaboration tools, how to select the right tool for the right process, and examines case
studies of how different SMBs have used these tools to their advantage.
September 2010
2. What is Collaboration?
Collaboration is one of those terms that everyone seems to have a different idea
about what it is. Is it communication, coordination, virtual teams, distributed
project management, real time interactions, or maybe some of all these things?
What is Collaboration?
I created my definition of collaboration many years ago, and it still works well
today:
“Multiple coordinated interactions
“Multiple coordinated interactions occurring between two or more people that occurring between two or more
include the transfer of complex information for some common purpose or goal.”
people that include the transfer
It is important for SMBs to understand why collaboration is critical to
organizations of all sizes and that it can help you to not only get new clients, of complex information for some
but to keep the ones you have. It is also important to realize that business is all
about relationships and maintaining them. Often, to be able to get the most out common purpose or goal.”
of collaboration, it is not a matter of simply implementing new Collaboration 2.0
tools that make the difference. It can require a change in the way you think.
A Holistic View of Collaboration
Adopting a collaborative technology often requires a new mind set and a
different way of looking at things. Since all the tools we create are extensions of
our mindset and beliefs, collaborative tools are no different. Therefore we need
to shift to a holistic view of collaboration (not a tool-centric view). This new People Process
Virtual
view of collaboration is holistic, and puts a much higher value on the people and
Teams
process aspects of collaboration than the technology, which is only about 20% of
the solution.
Technology
Figure 1: A holistic view of collaboration
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3. What is Profitable Collaboration?
Collaboration is already prevalent today. In Figure 2, from a study in March of
2010 on “The State of Collaboration,” we can see that more than half of business
people collaborate on a daily basis.
Frequency of Participation in Collaboration Projects or Efforts
Less than
monthly Monthly
3% 7%
Hourly
9%
Weekly
28%
Daily
53%
Figure 2: 53% of those surveyed collaborate on a daily basis
But is it profitable collaboration?
Profitable collaboration happens when the right collaborative technology is
applied to the right process, at the right time and creates a big win. Collaboration
is about relationships, and relationships are the way to keep long term clients,
and increase profitability. It is also the path to more effective and efficient
interactions, which also leads to profitability.
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4. How to Define Profitable Collaboration
There are four primary ways of defining profitable collaboration, some more
tangible than others:
1. Saving time or money – the most tangible benefit
2. Increasing quality
3. Innovating and/or providing decision support
4. Easing access to and interactions with subject-matter experts
Warning Signs that Collaboration is Not Profitable
There is also a downside to not implementing collaboration correctly, or not
having collaboration at all. The biggest indicator of this is that your client
relationships start going south. But how do you know they are going south?
Below is a list of some warning signs that your relationships are not working:
• People are angry with you
• The wrong supplies or people show up
• Your level of frustration is high
• Your partners are defecting
• New competitors are eating your lunch
• You can’t change quickly enough
• No one can see alternatives
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5. Collaboration Challenges Faced by SMBs
So why is it so difficult for SMBs in particular to take advantage of
collaboration? There are a variety of reasons for this, one being simply that
collaboration is difficult. A second reason is that until the last few years, most
collaboration tools were built for large enterprises with IT departments, but
SMBs either have small or no IT resources to apply. SMBs are also much
more price sensitive than the enterprise, so collaboration software has to be
inexpensive ($10-20 per person/per month) as well.
A third reason is that most collaboration tools are unnecessarily difficult. In
many of the companies I have worked with (large and small) I found that any
impediment to collaboration, even something as small as an additional sign-
on, will drop adoption by 50% or more. The reason for this is that users of
collaboration tools need to feel empowered the first time they use them. These
tools need to be familiar, easy to navigate and intelligent enough to help the
users have a good experience.
Cloud-based Collaboration is Critical for SMBs
The recent migration towards Software-as-a-Service (SaaS) or cloud-based
tools has been a boon to SMBs. They are easy to use and require little or no IT
support to implement. In most cases, SMBs can sign up for a free 30-day trial
before committing to pay month-to-month or on a yearly basis. Let the software
vendor worry about keeping the servers up, adding new features and supporting
the software if it is needed - you will always have the most recent release.
The other benefit of these SaaS applications is that most of them were designed
for the web, not migrated from the desktop to the web. These web native tools
gave vendors a chance to shed a lot of the complexity that came with desktop
tools. For example, I am writing this white paper in Microsoft Word. What
percentage of Word functionality do you know and use? About 90 percent of the
hundreds of features in Word go unused because users generally don’t have the
time to learn them. This is true for most SMBs. They don’t have time to learn
because the pace of their business is so fast. That is why the ease-of-use rule is
so important (being able to use any of the tool’s functions with only one or two
clicks).
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6. Selecting Collaborative Tools
Most enterprises go through five stages of evolution with collaboration
technologies, but this is usually more abbreviated in smaller organizations
like SMBs. That is why groups, teams and even departments within larger
organizations are quicker to adopt collaboration technologies than the whole
enterprise. Many of the tools for these organizations are focused on internal
collaboration (SharePoint, Chatter, Connect, etc.) However, because SMBs have
fewer employees and often less geographic distribution, internal collaboration
(within the organization) tends to be easier to achieve. However, it is external
collaboration (outside the organization) that helps with the relationships where
your clients are, and where they need to be supported.
The Right Tool for the Wrong Purpose
Although these collaborative tools may sound like a silver bullet, they do not
always meet all of your needs. Sometimes you may have the right collaborative
tool, but are using it for the wrong purpose. You can technically write a report in
Excel (I have seen people do it) but it is not the right tool for that job. Similarly,
email gets pressed into service for messaging and coordination when email is
good at only one-to-one or one-to-many interactions, but not many-to-many
interactions.
Here is a story of the right tool meeting the wrong need. There was a village
in Africa, and every day the women of the village would set out to get water,
walking with large jars on their heads. They walked 12 miles each way every The right collaborative tool for the right problem
day. One day, someone from the United Nations was in the village and saw the
women leave each day to get water. Without asking the women, he decided that
the village needed a well. So a wonderful well was built in the middle of the
village, but none of the women used it and they continued to keep walking 12
miles each way to get water. Finally the UN employee asked the women why
they were not using this perfectly good well.
The women replied “because walking to the river gives us time with each other
and away from our husbands.” This shows how easy it is to get the right tool for
the wrong use.
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7. Finding and Understanding the Problem
Most SMBs don’t have the time to investigate the over 2,000 collaboration tools
on the market today. That is why SMBs need to first understand their problem in
order to help them find the right solution.
One of the best places to look for problems is in processes that have
collaborative leverage. There are seven critical processes we find in any business
(no matter what size) that have collaborative leverage:
1. Sales & marketing (proposal development)
2. Customer service/support (exception handling)
3. R&D (new product or service development)
4. Value network management/relationships with external organizations,
project management (exception handling)
5. Training (internal and external)
6. Decision support/crisis management
7. Corporate or project planning
For example, a company that is collaborating on a sales presentation would
ordinarily need to email copies back and forth to update it. This creates multiple
versions of the same file sitting on multiple computers. This is the type of
process that can cause relationship problems and is usually a fertile ground for
solutions with collaborative tools.
What to Look for in Collaborative Tools
Now that you’ve defined the problem, it is time to start looking for the
appropriate collaborative tool to solve it. Evaluating tools based on the
right criteria will aid in this process. Here are the four things to look for in
collaborative tools:
1. Applying the appropriate technology to the problem/challenge
2. Ease-of-use (1-2 clicks to do anything)
3. A tool that does not get in the way of the conversation, but rather
facilitates the interaction
4. A tool that ties into the user’s native, familiar environment (Outlook,
Office, email) to keep the learning curve small
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8. Rhino Bill’s Search for the Right Collaborative Tool
(Case Study)
Rhino Bill, an Ohio-based provider of Medicare Charge Billing software, is a
good example of a company that defined its problem, and then sought a solution.
Approximately 18 months ago, Rhino Bill was searching for a collaborative
project management tool and began the process of evaluating various solutions.
Rhino Bill felt Basecamp, although simple and easy to use, did not have enough
power for what they needed to do in the agile software development process,
and Daptive and AtTask were overkill and expensive. The company found that
Central Desktop’s online collaboration platform provided the best mix of cost
and features. Rhino Bill began using Central Desktop and has been using it to
run the company for the last year and a half.
Rhino Bill was also building some new software called “Cloud 11.” According
to Jenni Robertson, Business Manager and Scrum Master at Rhino Bill, “We do
agile development of our software; that means we do new iterations about every
two weeks. We spent a lot of time looking for the right tool to support our four
full-time employees and six additional contractors on the development team.
Although we are based in Ohio, our team is very distributed and we needed
a central place for all of our documents. But it was Central Desktop’s task
management features that convinced us that it was the right tool.”
In this case, Rhino Bill was able to narrow down the type of collaborative tools
they wanted to evaluate to a general tool category (project management). Since
they are technologists, they had a good idea of their issues and the functions they
needed to solve them. With this in mind, they were able to test and select a tool
based on price and feature fit.
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9. Measuring Profitable Collaboration
One of the interesting problems about collaboration that affects everyone (no
matter what size organization) is determining if it is working and how well it
is working. This requires metrics… but since the value of most collaboration is
indirect and intangible, it can be very hard to measure directly.
Let’s take the example of an astronomer looking for a black hole. Black holes
have such a high gravity; they absorb light and so cannot be seen directly. So
how do astronomers know they are there and how big they are? Astronomers
look at the more visible astronomical objects around where the suspected black
hole is. Because of the high gravity of the black hole it affects other planets, the
moon, asteroids, and even the dust surrounding it. These things can be measured,
and through them the astronomer can calculate where the black hole is, and its
size and strength.
The same principle applies to collaboration. Since it is hard to see or even
characterize for most people, it is best to measure the things in an organization
it affects. Let’s examine a few scenarios that yielded measurable benefits as a
result of effective collaboration.
Using a Collaboration Tool to Save Time
Let’s say that you are working on a report for a client and you need the input
and expertise of a few people outside your organization. You can set up a virtual
workspace using a collaboration tool like Central Desktop and invite those
experts into the workspace.
In the meeting you may require some documents that are part of the report to aid
in the discussion with these experts. These documents can be uploaded one at a
time or loaded in a batch into Central Desktop where everyone can access them.
This way there is “one golden copy” of the document and not many versions
floating around in different people’s email inboxes. An online conversation
about the documents can be done through a discussion forum and the project’s
progress tracked through Central Desktop’s task management functions.
As a result, you are able to finish the report three days faster than if you did not
use a collaboration tool. This type of time savings is one of the most common
and easiest ways to measure the benefits of collaboration.
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10. Lightner Property Group Gains a “Virtual Staff
Member” (Case Study)
In this next example, a property management and development firm, Lightner
Property Group (LPG), was also able to experience a measurable benefit of
using a collaboration tool. The company needed a solution that would help
them streamline many of their manual and tedious processes. After being
in operation for 25 years, Lightner Property Group had accumulated a vast
amount of information and data that was all stored in dispersed filing cabinets,
laptops, and hard drives. The company had protocols for key resident and tenant
communications; however, staff members had to manually perform all steps,
which expended a lot of company time for a fairly standard process.
Using Central Desktop, LPG was able to upload all their data online, where
clients could easily access their own information from their respective
workspaces. Central Desktop’s workflow solutions also allowed LPG to
automate its resident and tenant protocols. For example, whenever a tenant filed
a work order request, Central Desktop would automatically send an email to a
vendor to let them know they’ve been assigned the work order.
As a result of using Central Desktop, LPG saved valuable time and resources,
which is essential for a small business. The time that LPG employees previously
spent on many of the company’s manual processes was eliminated. In fact,
LPG says that Central Desktop alleviates so much work that it has become like
“another staff member.”
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11. Fuzebox Saves $1M on One Project (Case Study)
For those of you who prefer to measure benefits in terms of cost savings, we’ll
examine how Fuzebox, a global consulting and technology firm, was able to
save money through its use of Central Desktop. Fuzebox’s larger client projects
were very complex and could last several years, so they needed a collaboration
tool that would keep them organized. Specifically, the functions that they needed
include: the ability to check in/check-out documents, manage workflows and
host web meetings, as well as allowing both internal and external members to
share communications in real-time, and effectively help monitor projects on an
ongoing basis.
Like other SMBs, Fuzebox looked at everything from Basecamp to SharePoint.
After choosing Central Desktop for its feature set, they initially began with five
users, but today there are over 150 people using Central Desktop on a daily
basis. Fuzebox was able to realize the most tangible benefit of collaboration
– cost savings. Central Desktop was used to manage one of Fuzebox’s largest
international projects, and has already saved $1 million dollars in travel,
organization, management and overhead costs for this project alone.
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12. Measuring Collaboration ROI
What other metrics can be used to show the value of collaboration? Assigning
value based on an outcome is another popular way. For example, getting a
project for a client done early, as mentioned in a previous example, can result in
earning you a new project with a $100K contract. Would you assign all of the
$100K value to collaboration? Of course not, but perhaps you would assign 10%
or even 25%.
So working collaboratively has now earned you $25K. At what cost? A typical
cloud-based collaboration tool ranges from $100-$200/per month (for a 10-20
person company) so let’s estimate an annual cost of $2K. If the value received
(on this one client) was $25K, that is a 12:1 return (ROI). Even if the annual cost
for the tool was $10K, you have a good return, which more than justifies (and
pays for) the collaborative tools you are using.
However, I don’t believe ROI is the right question to be asking. Collaboration
on its own has little value, but when applied within the context of a process, it
gains value that can be (to some degree) measured. While measuring ROI may
make your accountant happy, a better question to ask yourself is “how is this
moving my company forward?” Is collaboration helping you get (and keep) new
business, retain old business, be more productive and make new partnerships
and alliances?
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13. Conclusion
If you want to be more productive with the few resources you have, and retain
and grow your client base while making little or no IT expenditure, then I invite
you to look at cloud-based collaboration tools like Central Desktop. These
vendors are focused on SMBs, as opposed to larger vendors that have hamstrung
their enterprise offerings and labeled it as an SMB version. Often these tools
don’t take into account the special collaboration needs of the SMB, and can be
expensive even in the SMB version. Instead, look at tools for SMBs that were
built in the cloud and are native to the cloud as they have better performance,
are at a better price point, and often require little or no initial investment. Using
these tools can help your business share information, work more efficiently and
improve the quality of your client relationships. All of these factors will help
you and your business become more profitable.
About the Author:
David Coleman is the founder and Managing Director of Collaborative Strategies and is the author
of four books on collaboration, the two most recent being Collaboration 2.0 and 42 Rules for Suc-
cessful Collaboration. He is a frequent blogger at a number of sites like collaborate.com, and writes
a regular column for eLearning Magazine called “Collaborative Thinking.” When not doing research
and writing industry reports on collaboration, David works with large and small organizations to
help determine their collaboration strategy. He also works with collaboration vendors on: demand
generation, partnering, and product roadmaps. David can be contacted for speaking engagements,
workshops, or consulting at: 650-342-9197 or davidc@collaborate.com, or dcoleman100 on Gmail
or Twitter.
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14. Central Desktop
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http://www.centraldesktop.com. www.centraldesktop.com