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When information sharing goes wrong

Trust in the supply chain

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Workshop One of the most troubling phone calls I have ever received was from the irate managing director of an IT reseller. I was working as a channel manager for a major software company at the time and the complaint was that we had a leak.

Extreme carelessness

After a bit of investigation, we figured out what had happened. A few days before, I had had a sales review with my boss and had written a list of potential deals on his whiteboard. He subsequently had my reseller’s competitor in his office for a meeting and had not cleaned the whiteboard. During the meeting, the second partner had obviously made a note of everything on the board, then proceeded to poach the prospect list.

"when markets are tight and margins are thin, many people will take advantage of every edge they can get"

This may be an extreme case of carelessness and dodgy ethics, but it does serve to illustrate that some of the romantic notions we have about the free sharing of information with trading partners can come across as a bit naive.

Business is business and when push comes to shove, especially when markets are tight and margins are thin, many people will take advantage of every edge they can get. We might pride ourselves on our ability to cultivate trusted relationships but information can easily be abused in ways it’s often hard to anticipate.

Appreciating the dangers of business-to-business knowledge sharing is becoming increasingly important. The advantages of more open communication and exchange of data between trading partners are clear.

In a supply-chain context, for example, there are benefits to sharing forecasting or other information with key suppliers. If they know what you are likely to be asking for, they can be better prepared to deliver it promptly when orders are placed.

Rush, rush, rush

Conversely, persuading suppliers to give you access to inventory, capacity and other fulfillment-related information can help with your own planning processes. As an example, knowing in advance whether your suppliers can do their bit when a customer wants a rush order can make the difference between an immediate deal and losing the order.

The same principles apply further into the process. An open exchange of information with your sales channel can help you forecast and plan efficiently. Later, collaborative selling can boost the collective sales effort.

All such exchanges are becoming easier as technology advances. Creating extranets based on customer, partner or supplier portals is much simpler than it used to be. Indeed, packaged applications can help to open up your systems to trading partners. Content management systems also often cater for outside access, and some licensing models even allow for user accounts to be recycled to deal with transient third-party access.

Together with continuous improvements in communication – from email through instant messaging to web conferencing – and the emergence of technology that allows direct transactions between systems, some might argue that the exchange of information has actually become too easy.

The question is whether an understanding of the risks, and of the safeguards necessary to protect against them, are keeping up with developments.

Dangerous people

Four key areas are important to consider here: the security of systems and information; the legal framework within which sharing takes place; the enforcement of security and compliance policies; and staff awareness and training.

In other words, you need robust control, explicit contract terms governing what can be done with shared data, good procedures and a responsible workforce.

On this last point, the share-by-default culture that has grown up around social media is one of the dangers to look out for, as it has a tendency to bleed from the personal to the professional. It is a real problem in business, where as we have seen information can represent tangible value.

So, while integration of information flows is getting easier and can have significant advantages, it is critical to cater for the associated risks, particularly the people-related ones.

Be clear about what you want to share, with whom, and under what circumstances, then put in place the processes and safeguards. ®

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