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 design and development called collaborative product commerce (CPC). Drawing on prior research in media richness theory and organizational science, we develop a theoretical framework to study the impact of CPC on product development. Based on data collected from 71 firms, we test our research hypotheses on the impact of CPC on product design quality, design cycle time, and development cost. We find that CPC implementation is associated with greater collaboration among product design teams. This collaboration has a significant, positive impact on product quality and reduces cycle time and product development cost. Further analyses reveal that CPC implementation is associated with substantial cost savings that can be attributed to improvements in product design quality, design turnaround time, greater design reuse, and lower product design documentation and rework costs.