...Peter Lusty, chief executive of Strategix is a voice of reason amidst a storm of hyperbole...

To maintain a strategic position in today's marketplace, companies must achieve a greater level of operational efficiency. This is done by balancing the need to provide excellent customer service (right product, right place, right time) with the need to optimise inventory and maximise margins. Ever since Gartner Group coined the phrase "collaborative commerce", debate has centred on it being the cure-all for enterprise efficiency ills.

In reality, only when it is properly implemented in line with strategic objectives, is collaborative commerce able to improve innovation and organisational flexibility, shorten time to market, reduce inventories and deliver significant improvements in profitability. So, before hopping on board yet another industry bandwagon, determine whether collaborative commerce is appropriate to your business and how it will add value to the way it operates. Also, ensure that you choose the appropriate collaboration to suit your needs. This could be purely the sharing of information across the company's Intranet(internal collaboration) or widened to collaboration with your supplier that results in stock level sharing (supplier relationship management).

In addition to considering appropriate collaboration, you also need to consider the cost of implementing a system that is capable of collaborative commerce. Many vendors will tell you that they do it, but this is something you really need to research - and keep in mind that it is not necessarily the most expensive system that is the best. What you're looking for is something that is fit for purpose, fit for pocket and fit for your organisation. Don't get swept away in the hyperbole and "marketing-speak". If the vendor can't tell you exactly what its software does and precisely how collaboration fits into your business plan, walk on by!

In its best form, collaborative commerce closes the links in the enterprise supply chain and (where appropriate) connects the organisation's customers, suppliers, warehouses, distributors and carriers in one virtual enterprise with clearly articulated, shared objectives.

The CEO of one of our customers recently gave an excellent example of how internal collaboration can really work when he explained how the pan-European IT backbone in his organisation enables them to do business in any country, in any currency, using a single system with full visibility to inventory across the company. Having built this solid base of experience and understanding of how business driven (not technology driven) collaboration can really deliver value, the same customer is now extending the reach of their collaboration strategy to embrace key suppliers.

There is no denying that greater visibility throughout the supply chain - from planning and procurement to point-of-purchase - can help organisations reduce expenditures, improve operational efficiency, and respond more quickly to customer demands. However, make sure you collaborate for value, not just because it seems like a good idea. Ultimately it's the lowest cost provider with the highest service level that will increase market share at the expense of its competition. If collaborative commerce can help ensure that that provider is you - go for it.