Understanding the Impact of Collaboration Software on Product Design and Development

Prior research suggests that supply chain collaboration has enabled companies to compete more efficiently in a global economy. We investigate a class of collaboration software for product development called collaborative product commerce (CPC), and estimate its impact on product quality, design cycle time and development cost. We develop a theoretical framework to study the impact of CPC on product design and development. Based on data from CPC implementations in 72 firms, we test and empirically validate research hypotheses on the impact of CPC. We find that CPC implementation is associated with greater collaboration among product design teams which, in turn, have a significant positive impact on product quality and a reduction in cycle time and product development cost. Based on a subset of firms for which operational metrics were collected, we find that CPC is associated with substantial quantifiable improvements in product design quality, design turnaround times, and product development and rework costs.