Our research indicates that there is tight integration between C-level supply chain executives from B2B partner companies and CIOs within those organizations.

Original findings from 191 enterprises conducted in January 2011 and supported by follow-up interviews with 60 professionals within supply chain executive roles in May 2011 underscore the importance of the office of the CIO to their supply chain partners.

As IT moves to the forefront of business as a strategic differentiator for supply chain performance, the CIO’s responsibilities and influence have grown dramatically.

CIO’s find themselves at the nexus of often disparate groups ranging from internal stakeholders to suppliers and trading partners.

In our June 2011 research brief  B2B Integration and Collaboration: Strategies for Building a ROI Business Case, 58 per cent of companies surveyed cited establishing a supplier collaboration initiative to establish better visibility of the extended supply chains as one of the their top strategies in 2011.

Additionally, 53 per cent of companies surveyed cited integrating partner facing collaboration processes with internal business processes.

Figure 1: Top Strategic Actions of Supply Chain Executives Regarding Collaboration

Source: Aberdeen Group, May 2011

Still, for the CIO who is engaged in supply chain integration efforts establishing and maintaining effective collaboration and integration between various cross-functional teams and disparate external groups can be a daunting task.

Organisations that have rallied their suppliers, distribution partners, and customers to create a collaborative flow of supply chain information are reaping major benefits.

Table 1 summarises the benefits of process collaboration and the value it brings to a company as well as its trading partners:

Table 1: Process Collaboration Benefits

Source: Aberdeen Group, May 2011

Table 2 shows the improvements that Best-in-Class companies have gained in terms of unit costs of various transactions.

It is important to note that even for manual approaches for each transaction, Best-in-Class companies are ahead of all others.

But when we compare manual with automated both Best-in-Class companies as well as all other companies have seen vast improvements via automation.

Table 2: Transaction Costs for Manual and Automated B2B Approaches across Best-in-Class and All Others

Source: Aberdeen Group, May 2011

Challenges to Effective Collaboration
While there are cost benefits, many companies still run into resistance.

It is important for the CIO to be aware of these challenges to implementing a collaboration initiative and adjust for them within partnering organisations.

The top three challenges to supply chain B2B collaboration are:

 - Over-reliance on off-line technologies (such as phone, fax or e-mail) as a chief communication and collaboration means with trading partners
 - Lack of awareness of value proposition of B2B integration
 - Insufficient internal knowledge about new customer collaboration technologies and services

Increasing operational costs (including logistical and materials costs) and the ever increasing complexity within the supply chain have brought many companies to the brink of disaster.

However, top companies have used this confluence of increasing costs and growing complexity to spur collaboration between the trading partners and other key stakeholders to great effect. 

For more research that applies to the CIO, please click Aberdeen's CIO Toolkit.

Bob Heaney and Kevin Permenter are senior research analyst for Supply Chain Management and Research Associate at Aberdeen Group

Pic: Ingrid Taylar cc2.0