Enterprise 2.0 - What are people *really* doing

This is the first post in an "Enterprise 2.0" series of posts, reflecting on lessons learned and some of the debates in the space, and we'd like to use this to spark off several posts and a discussion on the use of these new technologies in enterprises. There was quite an interesting survey recently by McKinsey of what parts of Web 2.0 Enterprises were actually looking at using. Here is the chart from the paper:



This seems - in our experience, and with the exception of peer to peer networking - fairly sensible usage of Web 2.0 technology in terms of "bang for the buck" for any enterprise.

The use of Webservices is by far the biggest economic driver in the ability to restructure a business in studies to date, and companies are already driving tangible benefits from it. We see it as the "outsourcing endgame" as it allows "rightsourcing" rather than just shifting today's workpatterns to low wage economies.

The ability to build on the combined knowledge of staff - and beyond - is a major competitive advantage, in fact some people (eg John Hegel) believe that we are moving from a "transaction" economy to a "talent" economy, and the ability to use knowledge correctly will be critical. While not sure that transaction economics is going to die anytime soon, clearly making best use of the wetware - especially in high cost economies - will be critical

In fact we believe that the above two forces will be primary drivers of the "Lean Enterprise 2.0" (more in later post)

We can only assume that many webservice media providers were interviewed in the survey, as the high usage of peer to peer networking per se seems odd.

Social Networking is a bit tougher to justify - its not clear if all that many enterprises have a real "need to belong" aura about them that will draw in their customers - and its also not clear just how many Social Networks any one person will join. Nonetheless, for an enterprise with a capability to attract a social network (examples we have worked with include Financial Services, New Technology development, Interactive Media ) they have proven values in customer attraction (Friend of Friends) and Retention (Sense of Community, warning of impending defection).

RSS, while great for geeks, has some real issues with monetisation of advertising, so we believe that it is necessary to balance out the positive benefits of such technology vs potential revenue loss. If it increases your site's helpfulness (exports "attention" as it were), and results in more transactions, its a winner. If it merely sucks users away from Ad impressions its harder to justify.

Podcasts and Blogs are interesting - fraught with problems of privacy, disclosure etc etc, they are - in our experience - very powerful demand generation ( mainly marketing and PR) tools. They have been shown to be fairly effective in transmitting the human values of enterprises (Robert Scoble at Microsoft, the recent J&J/Red Cross bunfight for example) They do have limitations however, namely the requirement for an enterprise to become more of a media business. However, it is our view that in the Broadband Net world all businesses will be Media businesses to one extent or another, so its best to act sooner rather than later.

Wikis and other in-house collaborative software - this to us is in the box of "Why wouldn't you" - but we see it happening at grassroots level and in reality part of any Collective Intelligence suit of applications.

So why are Enterprises doing things in some way in the opposite direction to Web 2.0 "coolness"?

The reason is that Web 2.0 fans forget that Enterprises are trying to optimally manage a far wider range of issue that just technology adoption. In some ways its very simple - value is created in essence by:

- Increasing volume of customers
- Increasing value of customers
- Reducing churn / increasing retention
- Reducing OPEX (operating expenses) per unit of sale
- Using existing CAPEX (Capital Expenditure) as efficiently as possible
- Maximising bang for buck of new CAPEX

And that is in the backdrop of faster pace of ever faster technological innovation, new markets opening up globally and online, existing customers getting sucked away by a plethora of "long tail" and global competitors - and the da to day of running a complex, dynamic social network called an Enterprise.

WebServices are an obvious choice - increasing reach, potentially value, certainly reducing Opex and potentially Capex as well - and have been shown to help prolong retention by offering self-service

Collective Intelligence (CI). If harnessed well CI will impact all the above areas. However, it is an emerging field an requires quite a shift in "ways of working" - from information hoarding to information sharing - to really gain from it. As noted we see Wikis etc as part of the overall toolset in this area, though we know of enterprising people who have developed very innovative customer and supplier interfacing wikis and save significant costs (and retained customers) in that way.

Social Networks - witness the furore over Facebook to see the current issues. Will they come - yes, but the current crop do not - in our view - have acceptable levels of privacy and security for use outside of any enterprise, and are not really structured for use within an enterprise yet. However, suitably modified we can see they will have major impact as overlays in B2B exchanges, as tools in CRM and VRM approaches, and probably as part of an CI system. More of this in a later post.

Podcasts and Blogs - mainly market making, but we believe they have a major potential role in customer retention as well. The more an enterprise relies on media, the more useful these technologies will be. (And Vodcasts more than Podcasts in our view)

RSS we have discussed already, in the light of the above forces it seems that it has to be an enabler of something bigger (ditto widgets).