October 5th, 2009

Twenty-two power laws of the emerging social economy

Posted by Dion Hinchcliffe @ 1:41 pm

Categories: Architecture of Participation, Business Models, Cloud computing, Collaboration, Collective Intelligence, Community, Community Management, Cost-effective scalability, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Enterprise 2.0, Enterprise Web 2.0, Grassroots Community, Innovation marketplace, Network effects, Social Computing, Social Economy, Social Media, Social Networking, Social Software, The Long Tail, Two-Way Web, User Generated Content, Web 2.0, Web 2.0 Platforms, Web as Platform

Tags: Web, Knowledge, Information Technology, Knowledge Economy, Amara, Strategy, Web 2.0, Management, Internet, Dion Hinchcliffe

Traditional measures of business success are becoming less and less important.There is a time for big picture thinking and there is a time for details in business and IT, the latter which make business and technical strategy a reality and the former which provides needed direction and focus.

Highlighting the big picture side last week we saw Steve Ballmer’s exploration of the efficiencies he believes are being driven by something he calls “the new normal”. In this view, he tries to frame up how a reset of economic expectations during the downturn has created an environment that is putting pressure on business to do more with less, affecting IT at least as much as the rest of the organization, if not more.

We’ve seen also seen similar and broader variations on this theme this year, such as John Hagel’s capable attempt to define the “Big Shifts” in business taking place in this century. Just recently McKinsey published a similar reported titled The 10 Trends You Have to Watch: And What They Mean For IT in the Harvard Business Journal (summary is by Gartner).

If we factor out the commonalities in these views, it highlights a core set of strategic trends in IT and business in 2009, namely:

• New resource constraints. Today’s new economic baselines (the downturn, green business, etc) are requiring that we find ways to accomplish our goals using fewer resources. This includes identifying the means to capture opportunity and transform “in process” business activities using newer, more efficient models. Business leaders will need to effectively link IT and business much more so than in the past to accomplish the movement to this new baseline. This also doesn’t mean everything is constrained. As we’ll see on the technology side, abundance is being produced that may address shortcomings in the business side.
• Value shifting from transactions to relationships. This is the growing realization that the traditional rote business transaction as the core source of organizational value is diminishing and value is now coming from relationship dynamics. This has many implications including using new management methods (example: from top down command-and-control to community curator and facilitator), tapping into new reservoirs of innovation, adopting new ways of interacting with customers, or driving better tacit interactions. Web 2.0 and social computing will be key enablers of this for business units and IT organizations that want increased relevance.
• Industries in flux with new ones emerging. Previously stable industries such as finance and media are feeling the pinch the strongest, but most others are as well. The recession is creating a bigger gap between healthy and unhealthy businesses while many industries are being unbundled or transformed into new ones (traditional software companies moving to SaaS and cloud computing for example or the rise of crowdsourcing competing with outsourcing at the low end.) Again, today’s dynamic Web-driven global knowledge flows and agile online models for computing and collaboration — as well as economic and intellectual production — are now a significant change agent.
• Moving from change as the exception to change as the norm. Today we’re seeing faster consumer behavior shifts, quicker pricing changes, more rapid product cycles, and faster media feedback loops. While this can also lead to more extreme market conditions, it also enables opportunities to be turned into bottom-line impact for organizations that can adapt to market realities quickly enough. The network is the culprit (and solution) for much of this again: We now have pervasive social media instantly transmitting and shaping cultural phenomenon and faster financial cause-and-effect in the markets, real-time online markets, and so on. In the 21st century, following a plan is increasingly less important than responding actively and effectively to change.
• A shift of control to the edge of organizations. This has been predicted at least as far back as the Cluetrain Manifesto, if not farther. It’s not even really a shift, it’s more like the addition of a new dimension to how we operate organizationally, something I’ve referred to previously as “social business.” This new addition changes the dynamics of where useful information comes from, how decisions are made, and how more autonomy and self-organization will be needed (and tolerated) in modern organizations to meet more dynamic and changing global marketplace.

As I explored recently in “How the Web OS has begun to reshape IT and business”, today’s Internet has become a central driver of how we do things today. It’s the richest marketplace that

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September 2nd, 2009

Enterprise 2.0: Finding success on the frontiers of social business

Posted by Dion Hinchcliffe @ 12:48 pm

Categories: Blogs, Business Process Management, Collaboration, Community, Enterprise 2.0, Enterprise Mashups, Enterprise Web 2.0, Enterprise Wikis, Governance, Mashups, Network Effects, Network effects, Situational Software, Social Computing, Social Software, Social media, Social networks, Web 2.0, Web 2.0 Platforms, Wikis

Tags: Social Computing, Enterprise 2.0, Tool, Organization, Enterprise Social Computing, Dion Hinchcliffe

It’s entirely possible something may cause social tools to abruptly stop their broad movement into the workplace, but history tells us that it’s just not likely. Success is in the eye of the beholder and with it often spawns a growing body of followers, adherents, acolytes, as well as nay-sayers that won’t be convinced until it’s an inescapable conclusion. In this very manner, at least so far, seems to go Enterprise 2.0, a moniker for corporate social software that has been inspired by widely popular online Web 2.0 tools such as blogs, wikis, social networks, and other social software.

As we’ll see, this is an intriguing case of a nascent business, social, and technology movement that seems to — despite some claims to the contrary — actually have had a rather humble and unheralded ascent while making surprisingly deep inroads in business including some higher profile successes. Make no mistake however, despite the apparent numbers, this is a movement that’s in its early days yet and which has years — if not a decade or more — before it has its largest impact.

What exactly the impact of Enterprise 2.0 will be however, has been the subject of an active and lively debate online over the last couple of weeks.

Uptake moving faster than absorption

My recent exploration of the potential causes of Enterprise 2.0 failures here on ZDNet managed to spark quite a discussion in the blogosphere about enterprise social computing and its overall appropriateness, motivations, and benefits to business. In particular, well-known contrarian Dennis Howlett weighed in last week with fairly severe criticism of Enterprise 2.0 which ultimately resulted in a direct response from Andrew McAfee today (who described it originally). For those wanting to follow the rest of the conversation, Paula Thornton probably did the best round-up of the discussion. The range of responses shows a wide variety of opinion reflecting both the scope and timeliness of this subject.

For my part, I would observe that the points that Dennis makes, while resounding with business importance (and being a bit disingenuous since I believe Dennis knows better given the information available), almost completely ignores the discussion and experiences with Enterprise 2.0 up to this point. This includes both the extensive efforts taking place in companies around the world right now as well as the already widespread nature of these tools. Far from being a solution waiting for some kind of business problem, at present Enterprise 2.0 describes a new way of working together that is already being used by millions of workers every day.

Figure 1: Stats, Adopters, and Motivation

That not every Enterprise 2.0 effort will benefit the business is also certainly true, as it’s occasionally misapplied and overused, like any new business or technology idea. However, the many people finding value in these tools today or who are working hard to make them successful are poorly served by broad generalizations, that for some reason, Enterprise 2.0 “is a crock.” That it’s not a well-known term is certainly true; most people using social tools at work are just doing it and not giving it a name. This does not distract from the numerous stories of success that have emerged over the last few years.

As JP Rangaswami pointed out recently, social computing is increasingly moving beyond the perception of being “interesting, but of no commercial value” and into a place where it’s thought to provide a range of bottom-line business results for most that apply it.

In working with and examining the results of many early Enterprise 2.0 efforts, I’ve been forced to come to the conclusion through repeated example that there is something fundamentally unique and powerful about social computing. Though not all uses of social tools result in rapid adoption or instant results, those that establish an early network effect can and do push existing IT systems (often ECM, knowledge management, and communication tools) into rapid irrelevance or completely upend and replace older, less dynamic databases or information repositories in surprisingly short amounts of time. That this almost always happens with just minor disruption is fascinating to me. And as we’ll see below, despite Dennis’ skepticism, these emergent tools have a rich and wide set of use cases. In the end, senior managers that may not “give a damn” about the emergent nature of the enterprise do in fact care about better ways of running their businesses.

That there is such a wide range of positions about Enterprise 2.0 from highly experienced people inside the worlds of technology and business is intriguing but probably inevitable due to the early stages of these changes and their rapid onset. In large part, I believe this is because of the distributed and muted nature of the information about what’s happening with social computing inside the workplace (this is in contrast with B2C-style corporate social media, which is still getting the lion’s share of buzz and attention right now.) Many projects are also adopting early advice and aren’t heralding the massive change that these tools may bring, are flying under the radar, and setting expectations low in a business world that is fatigued with the failures of big-bang IT. That adoption is happening as fast as is apparent today is intriguing given the warning that McAfee himself makes about expecting too much change from all of this:

[C]ertain E2.0 enthusiasts adopt the language of revolutionaries. They rail against the old corporate order and proclaim that they’re working for its downfall. They portray hierarchy, standardization, and management as enemies of innovation, creativity, and value creation. And they maintain that E2.0 is an unstoppable force that will only gain power as Millennials enter the workforce and that resistance to it is, ultimately, futile.

McAfee does point out that he indeed believes that those organizations without these tools will eventually fall behind, but he notes it generally won’t happen that quickly.

So while revolution is almost invariably not taking place in organizations adopting social computing tools, the pace of uptake has actually been quite impressive given the rate at which enterprises typically adopt new technologies (translation: usually with glacial pace compared to the consumer world). The numbers and profiles tell the story as you can see in the State of Enterprise 2.0 visual above. While a “disruptive revolution” is not what’s happening, and Enterprise 2.0 is certainly not inevitable for most organizations (yet), the adoption of the tools has in fact been taking place at what some would call near-revolutionary velocity, including the number of companies reporting they are consciously engaging in it as some level.

Although I’ve been following Enterprise 2.0 closely since 2006 and I’m generally known as an advocate, I should be clear that I’ve also tried very hard to be impartial and balanced (hence, for example, my Enterprise 2.0 failures post). No one is served by unrestrained hype. As much as possible, I have gathered data and examined the trends to see if indeed 1) the tools of Web 2.0 have begun to move into the enterprise and 2) improve business results. The first is now virtually a foregone conclusion; we are clearly beyond the

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August 18th, 2009

Using social software to reinvent the customer relationship

Posted by Dion Hinchcliffe @ 12:11 pm

Categories: Architecture of Participation, Business Models, Business Process Management, Collaboration, Collective Intelligence, Community, Convergence, Cost-effective scalability, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Encouraging Unintended Uses, Enterprise 2.0, Enterprise Web 2.0, Governance, Grassroots Community, Innovation marketplace, Network effects, Prediction markets, Social Computing, Social Media, Social Networking, Social Software, User Generated Content, Web 2.0, Web as Platform

Tags: Customer Service, Customer, Social Software, Tool, Organization, Web 2.0 Application, Productivity, Web 2.0, Product Marketing, Customer Relationship Management (CRM)

The elimination of decades of inadequate communication channels will suddenly unleash a tide of many opportunities, as well as challenges, for most organizations.As Web 2.0 applications move more deeply into the strategic operations of enterprises, a unique hybrid of social software has emerged to help businesses deal with the giant sea of customers that awaits them on the other side of the network. While Enterprise 2.0 tools, primarily aimed at collaboration, are certainly part of this story, they often don’t help companies enjoy the full range of possibilities when it comes customer-facing social computing.

Enter the rapidly emerging Social CRM space, an area that’s become significant enough that there’s now a dedicated blog on the subject here on ZDNet by the terrific Paul Greenberg.

This year’s rise of enterprise social computing is opening a new front line in many businesses where the old ways of engaging with customers is no longer sufficient or even competitive. Many organizations I talk to these days are now evaluating the way social software seems to be altering the CRM landscape. In particular, Social CRM has recently come into its own as a leading model for this transformation. For comparison’s sake, online customer communities were a very hot topic last year in this same space, but as I pointed out then, it was surprisingly hard to create them repeatably. My sense is that Social CRM will be a more predictable, reliable model for applying Web 2.0 to customer relationships using many of the strengths of the community model.

Read Michael Krigsman’s 3 Big Reasons CRM Initiatives Fail

This is not to say that many of the social media tools that companies have deployed already aren’t good examples of Social CRM. Many of them are and this highlights a major discussion in the blogosphere last week sparked by SocialText’s Ross Mayfield, who posited that with Social CRM, the people are the platform. The key point here is that where online tools let customers have a social relationship with a business — in other words, interaction that is visible to them and other customers whenever possible — then some Social CRM is taking place. Without a fundamentally community-based relationship, you’re just back to traditional, one-on-one push management of customers. This latter model, a closed and asocial mode of customer interaction, is the very antithesis of Social CRM.

Social CRM: It’s all about people

For its part, Social CRM paints a vision of creating a deeper and more engaging community-based relationship with your customers, instead of the traditional approach of managing them, in a very Cluetrain Manifesto way. Part online community, part crowdsourcing, part customer service, Social CRM can create an emergent, collaborative online partnership with customers that can result in an array of improvements to business performance.

Far from being just for the benefit of the business however, with Social CRM customers tend to 1) be much more in control, 2) are in sustained contact with the organizations they care about, and 3) can use self-service, mutually visible participation, collective history, and peer relationships to assist each other as much — and often much more — than the classic CRM model ever could.

But like any composite, heterogeneous group of participants, Social CRM necessarily entails less deterministic control and outcomes. For example, these new Social CRM tools will let anyone ask a question publicly and anyone else in the community (customers or employees) answer it. Or provide a means to let new ideas flow in from the community in a very Dell IdeaStorm fashion. The question of who decides what the right “official” answer is, or which ideas will be selected and how non-employee submitters will be compensated are currently hard questions to answer for many organizations.

Then there is the challenge that by its very nature Social CRM is

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June 8th, 2009

Reconciling social computing with the enterprise

Posted by Dion Hinchcliffe @ 5:07 pm

Categories: Architecture of Participation, Business Models, Collaboration, Community, Convergence, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Encouraging Unintended Uses, Enterprise 2.0, Enterprise Web 2.0, Grassroots Community, Hype, Network Effects, Network effects, Products, Right To Remix, Social Computing, Social Media, Social Networking, Social Software, The Social Graph, Two-Way Web, User Generated Content, Web 2.0, Web as Platform

Tags: Social Computing, Worker, Tool, Organization, Singularities, Social Networking, Online Communications, Marketing, Advertising & Promotion, Dion Hinchcliffe

Umair Haque wrote an impressive tract on his Harvard Business blog late last week about Twitter and how it changes the rules of innovation. It’s an incisive and challenging piece that well worth reading if your looking at cutting-edge business trends. It also helps surface what’s turning into an increasingly larger gap between what happens in the business world and what happens everywhere else.

It will sometimes be a challenge to find the right metrics that help you to drive decisions about your social computing behaviors that improve the business. Jeff Jarvis and Michael Arrington made similar points over the weekend about process vs. product, ostensibly about their particular industry (journalism) and how social processes are competing — often more effectively, though very differently — with traditional, non-social “product” creations, namely news stories. As we’ll see, you can find similar examples of this now in many other industries. The key point: The processes involved in how we accomplish our daily work are being transformed by social tools on the network. Along the way, the act of work itself is becoming more of a collective journey instead of a final destination as our individual work experiences become more open, collaborative, participatory, and social.

The net result is often better and richer outcomes, though the journey can occasionally devolve into a less-than-deterministic result that can be (for the time being) rather unsatisfying, though rarely does it come to a complete stop until everyone who wants to has a crack at it.

On the other hand, the classical way of working has been to create finished, perfect-as-possible outcomes (products, services, etc.) from opaque, unknowable, lengthy processes which outsiders, within or outside the organization, could not directly perceive, alter, or improve. As Jarvis writes of traditional work methods:

It is the byproduct of the means and requirements of mass production: If you have just one chance to put out a product and it has to serve everyone the same, you come to believe it’s perfect because it has to be, whether that product is a car (we are the experts, we took six years to tool up, it damned well better be perfect) or government (where, I’m learning, employees have a phobic fear of mistakes - because citizens and journalists will jump on them) or newspapers (we package the world each day in a box with a bow on it - you’re welcome).

The key point here is the broader changes we are experiencing today: The pervasive presence of social software and today’s highly open, interactive, and remixable Web embedded deeply into our personal lives is increasingly allowing us to experience a new way of living. And it’s one that bears less and less resemblance to the workplace all the time, with significantly differing behaviors, skills, tools, and expectations. This situation creates a delta that, sooner or later, will simply become untenable for many organizations. We simply aren’t keeping up with the pace of change, never mind that not all workers are experiencing the change of the modern world the same way or at the same speed. Media sharing sites, social networks, and social tools have become embedded deeply in a large percentage of people’s lives, just as long as we remember it’s not everyone.

This increasing distance between these two worlds creates a gap — a disconnect, even — that increasingly cuts organizations off from their most valuable assets (their people) and also exerts a subversive force on organizations as their workers help themselves to the tools of their own volition, bring their (and arguably better) new behaviors and processes to work, and try to get things done with them, whether that’s crowdsourcing, Enterprise 2.0, online customer communities, etc.

So what will happen? Will there just continue to be a growing chasm between the worlds of business and how we do things outside of work? Or will the gap just become too large to sustain, with an equilibrium shift suddenly taking place in some way that creates what I’ll call (for want of a better term), a social singularity.

Singularities are popular topics with tech audiences. Read about technology singularities and Internet singularities.

A social singularity would be embodied by a convergence of

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June 3rd, 2009

Building a vision for Government 2.0

Posted by Dion Hinchcliffe @ 4:49 pm

Categories: Architecture of Participation, Business Models, Collaboration, Collective Intelligence, Community, Convergence, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Enterprise 2.0, Enterprise Web 2.0, Grassroots Community, Network Effects, Network effects, Right To Remix, SaaS, Social Computing, Social Media, Social Networking, Social Software, The Long Tail, The Social Graph, Web 2.0, Web 2.0 Platforms, Web as Platform

Tags: Web, Citizen, Web 2.0, Vision, Vivek Kundra, Government, Vertical Industries, Dion Hinchcliffe

Government 2.0 isn’t waiting for a federal mandate. Earlier this week, the nation’s first ever CIO, Vivek Kundra, urged the use of Web 2.0 approaches to address the needs of government and citizens at the Management of Change conference in Norfolk, Virginia. Kundra outlined several important areas where he believed Web 2.0 can help improve government: connecting with citizens and their ideas (social computing), routing around the horizontal and vertical silos surrounding government data (open APIs), and tapping into the potential savings of low-cost new software applications and processing capabilities (SaaS and cloud computing.)

Among the three areas, Kundra’s perception that citizens were a true peer group in the process of governing seemed to come through clearest:

“We’ve got to recognize that we can’t treat the American people as subjects but as a co-creator of ideas. We need to tap into the vast amounts of knowledge… in communities across the country. The federal government doesn’t have a monopoly on the best ideas.”

That the global, pervasive network known as the Internet can directly connect citizens with their government is obviously an idea well-aligned with Web 2.0 ideas. Not that the vision for something known as Government 2.0 is a new one. It goes back to the very beginning of the Web 2.0 discussion. But with a new administration in place in Washington and a passionate CIO that by all appearances is progressive and understands the modern IT era, the timing seems to be ripe for a remaking of government and perhaps even democracy itself.

Fixing what isn’t broken?

Our democracy is not quite 250 years old and its mechanisms have largely served us very well over the years. That we currently have representative government is for a variety of reasons, not the least of which were that the vast distances in our large country used to make wide-scale direct democracy difficult and that considerable expertise and knowledge were perceived to be required to make important government decisions. The Internet, however, with its ability to make any distance equally close and to let us research virtually anything in real-time, has seemingly erased the need to impose such constraints on how we govern ourselves.

But of course there is more to the story. The state of government today is also still very much a “we the people” vs. them, the government. There is a distance between us and our government, at least for most of us, that is reminiscent of paternal days of old when getting involved, unless it was your local assembly, was something that few people had the ability to do. Government was for people who could join it and make a career of it, and many have indeed dedicated their lives to public service. Now, however, there is the means to enable many, many more to be involved and to potentially create a government that fits us and serves us, in our time, better than it can in its present form.

We should also not forget the classic sayings that “bureaucracies exist to perpetuate themselves” and “power corrupts, and absolute power corrupts absolutely”, which are old chestnuts for a reason. The roots of these concerns occasionally need tending to as well.

In short, events of the last couple of years and vast changes in our modern society seem to urge some essential improvements upon our government, if only we had the means:

Improving Government 1.0

• More transparent and accountable. Too much government information is inaccessible from the citizens that paid to create it. Much more than just raw data or collated statistics, which is increasingly opening up already, its the very deliberations of the government machine; the decision making, who made them and why, as well as the actual actions taken, all of which are often far too closed to the governed, yet affect us so profoundly. Make no doubt about it, like Web 2.0 was to the rest of society, opening up daily activity to the daylight is a sea change and governments around the world, never very comfortable with scrutiny or criticism to begin with, will be seriously challenged in an era where their constituents have as much power as they do to communicate. It’s also true that too often the information that is intentionally kept from coming to light that is the most significant. I’m not talking here about secure or classified information; there is information that simply must be kept highly circumscribed for security reasons (though that too is often overdone). For an example of a move in the right direction, OpenSecrets.org is an excellent example of transparent and accountable government information, while Data.gov is also a good start, but only a start. Globally visible, persistent government activity is the enabler here, and Enterprise 2.0, which will be used much more internally within government at first over the next few years, is part of the answer.
• Less expensive, cumbersome, wasteful, and heavyweight. Our current government is largely a construct of the 20th century, when most of the growth and development of the federal government as well as our state and local governments took place. This is a traditional paperwork and hierarchy-driven system where, despite impressive adoption of Web 1.0 as well as numerous bright spots (some dramatically so), far too many of the cowpaths have merely been paved. The way we run our government must be reinvented for a world that has gone decidedly connected, digital, and is increasingly ready to be directly participatory. Not only can the way we interact with citizens and within government be made enormously better and more lightweight, it could cost dramatically less with the application of new technologies and social structures. And as we saw with the rise of nearly revolutionary open business models 10 years ago on the Web, engaging the greater world on the public network is often the best, easiest, and cheapest way to accomplish things, if only we have the freedom to fundamentally rethink the way we do things today. With the federal budget skyrocketing and no end in sight, dramatic means will be required to cut costs sooner rather than later, and some of the more powerful aspects of 2.0 will likely be the answer.
• Not as impersonal and imprecise. Not many people have a regular, meaningful relationship with their government other than paying their taxes and obeying the law. Most of the time, we are a government statistic instead of what we really are: living, breathing citizens. And while the debate on large vs. small government will probably never be over, a new form of government that is far more direct and personal is coming. The very nature of how citizens can connect with, engage, and gain mutual value from our government is changing because of the Internet. With 2.0, the government’s ability to provide a customized experience to each and every citizen so that the services that are provided, whatever they end up being over time, are exactly what we need, right when we need them, often powered by the rest of us. And mass customization is likely just the beginning; Facebook groups and political online communities began to help us self-organize but the legislation of the future as well as national decisions will increasingly be tailored by us and for us in a form of modern digital gerrymandering to fit us like a glove, potentially overcoming at long last the winner takes all tyranny of traditional democracy. E-mail gave us ability to reach our representatives instantly, but social tools, online community, government tools powered by collective intelligence, and participatory citizenship will change our civic lives a great deal more. In the very near future, for better or worse, our relationship with our government is almost certainly going to be closer, more personal, dynamic, and custom fit.

A quick glance at this list shows that it tends to parallel

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May 15th, 2009

The year of the shift to Enterprise 2.0

Posted by Dion Hinchcliffe @ 8:32 am

Categories: Architecture of Participation, Blogs, Business Models, Collaboration, Collective Intelligence, Convergence, Design Patterns, Enterprise 2.0, Enterprise Web 2.0, Enterprise Wikis, Network effects, Radical Decentralization, SaaS, Social Computing, Social Software, Social media, Social networks, Web 2.0, Web 2.0 Platforms, Wikis

Tags: Collaboration, Business, Enterprise 2.0, Tool, Organization, Productivity, Dion Hinchcliffe

Traditional collaboration tools can create powerful, local information flows but little build-up of value over time.The latest data emerging on how enterprises are using Web 2.0 tools in the workplace this year is painting a picture of a sea change in the way those businesses conduct collaboration and communication amongst their workers, and to a lesser extent the rest of the world.

Intriguing new just-released reports now show that between a third and one half of businesses either already are or will be employing so-called Enterprise 2.0 tools in the workplace (blogs, wikis, and social networking/messaging) in 2009. The data also show that security concerns remain high, access is actually fairly low, compliance with mainstream enterprise data practices is poor, and some workers aren’t planning to get anywhere near them.

The bottom line: The tools have arrived. How enterprise knowledge and is created and flows within our organizations is beginning to change dramatically.

In my recent post about the return on investment (ROI) of Enterprise 2.0, I cited the most recent widely available data as of mid-2008 saying approximately a third of businesses have the tools in place. However, we know have additional, more recent datapoints that shows both the latest adoption rates as well as some of the concerns that business have with use of the social tools inside and outside their organizations:

• Nearly one in two businesses will make use of Enterprise 2.0 software in 2009. According to a new report from Forrester, despite the novelty of the technologies (only 3 years old), the percentage penetration is very high, about half of all enterprises globally. Tellingly however, actual employee access to the said tools is fairly low and few enterprises are taking a “holistic” approach and are using them in a more targeted and/or fragmented manner.
• Business use of social networking has rough parity with personal use, while a quarter of people are not planning to use the tools at all. A broad new survey of over 6,000 respondents released yesterday by TMCnet and IntelliCom Analytics shows consistent business use of the social networking tools tools across organizations of all sizes and around the globe, ranging from 35% to almost half, depending on the demographic. The survey also found that company policies around social tools also remain far behind adoption, with less than half of all organizations having official policies on use. Also, some workers are determined to be disengaged, with about 25% reporting no plans to use social networks, period.
• Concerns about the security issues with social computing is high, around 80%. A new survey from Deloitte, also released yesterday, showed that Web 2.0 and social engineering security concerns are at an all-time high. Pretexting and phishing are now widely regarded as a serious threat to most organization’s information security.
• At least 50 percent of organizations will use wikis as important work collaboration toos in 2009. This is a slightly older but new to me finding from a respected source, the Society for Information Management’s Advanced Practices Council (APC). The report notes that “with over 75% of the global assets tied up in knowledge assets, having access to increased solutions to improve collaboration productivity is a key growth factor for organizations that want to improve their innovation capacity.” The report itself is only available to members, but is summarized well here.
• Management of content types like SMS/text messages, blogs and wikis are largely off the corporate radar in 75% of organizations. The AIIM State of ECM Report for 2009 says this issue (lack of indexing and archiving of these vital information flows) is a major management risk. It’s also a terrible and unnecessary loss for most organizations.

Proactive organizations: Avoid disruption while managing risk and accessing benefits

While the challenges of taking a business social are many and varied, one critical underlying issue that’s become increasingly clear that businesses need to strike the right balance between the tools they now have for communication and collaboration. A major change has taken place in many organizations over the last year and so there is imbalance and uncertain about how to best use the resources at hand.

To be clear, social tools aren’t the right answer for

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April 12th, 2009

Determining the ROI of Enterprise 2.0

Posted by Dion Hinchcliffe @ 9:27 am

Categories: Architecture of Participation, Blogs, Business Models, Collaboration, Collective Intelligence, Community, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Encouraging Unintended Uses, Enterprise 2.0, Enterprise Web 2.0, Enterprise Wikis, Grassroots Community, Network Effects, Network effects, Radical Decentralization, SOA, Social Computing, Social Media, Social Networking, Social Software, Social media, Social networks, Two-Way Web, User Generated Content, Web 2.0, Web 2.0 Platforms, Web as Platform, Wikis

Tags: Enterprise Software, ROI, Enterprise 2.0, Tool, Productivity, Dion Hinchcliffe

Despite recent statistics showing that Enterprise 2.0 tools have spread to about a third of businesses globally, there remain ongoing questions being asked in the enterprise software community about the real returns that they provide to businesses that deploy them.Many IT solutions create value only after traveling through an indirect chain of cause and effect. Certainly blogs, wikis, and social networks are popular on public networks, but does that translate to meaningful bottom line value to organizations? In other words, is Enterprise 2.0 truly strategic in the unique way that information technology can so often be?

This is a key question since actual penetration of these tools is almost certainly lower than the one third figure I mention above. Most organizations today, even the ones where the applications are available to employees currently, are not yet exhorting workers to adopt these tools en masse despite a suite of compelling arguments and a growing set of case studies. Even impressive citations such as the recent TransUnion Enterprise 2.0 case study that claims an eye-opening 50x return on investment (using the most basic ROI formula for calculating returns) are not yet initiating widespread inquiry.

Instead, while we’re seeing widespread interest and acceptance of Enterprise 2.0 in the workplace, there is still mostly a wait-and-see attitude amongst IT managers and business leaders at the moment. The reasons for this seem to fall into three general categories:

One is an broad wariness of a new horizontal information technology approach that purports to solve so many problems and will overlap extensively with existing solutions from e-mail and instant messaging to content/document management and knowledge management systems, to name just a few. Other related concerns are feelings that workers already have a lot of software to use today, that the tools already exist in the organization (see my Enterprise 2.0 and SharePoint discussion a few weeks ago), or that the available tools aren’t fully enterprise-ready yet.

A second set of issues is related to corporate culture and its fundamentally hierarchical nature, which seems anathema to the flattened, highly social nature of Web 2.0 in the enterprise. At this point, it’s becoming increasingly clear that in some tightly controlled, top-down organizations, culture is indeed an impediment to the use of emergent, social computing. Fortunately, there is now enough evidence visible in current case studies that many industries can indeed benefit from Enterprise 2.0.

The last issue is one that has bedeviled software and its strategic application to business since the very beginning, namely the

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January 29th, 2009

Using Web 2.0 to reinvent your business for the economic downturn

Posted by Dion Hinchcliffe @ 5:27 pm

Categories: Architecture of Participation, Blogs, Business Models, Business Process Management, Cloud computing, Collaboration, Collective Intelligence, Community, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Enterprise 2.0, Enterprise Mashups, Enterprise Web 2.0, Enterprise Wikis, Governance, Hype, Mashups, Network Effects, Network effects, Open APIs, Right To Remix, SOA, SaaS, Social Computing, Social Media, Social Networking, Social Software, Social media, Social networks, Two-Way Web, User Generated Content, Web 2.0, Web 2.0 Platforms, Web as Platform, Web services, Web-Oriented Architecture (WOA), Wikis

Tags: Web, Software-as-a-service, Network, Crowdsourcing, Business, Enterprise 2.0, Organization, Chances, Refactoring, Web 2.0

We are very fortunate that, given the generational challenges we face today, we have tools that those that came before us could not possibly imagine.At this point it’s more than clear that 2009 will be a challenging year for a great many businesses. Most organizations these days are now actively engaged in activities that are taking a look at what they can do to make the best of the current economic situation.

Some business leaders will be looking at paring things back to the basics while a different sort will be looking at entirely new avenues to survive and thrive. The decisions we make now can greatly affect what happens to our organizations going forward.

The good news is that most enterprises actually have a fair number of compelling options right now if they are willing to think outside the box. While some might look at the social aspects of things like Web 2.0 as marginal subjects when things get tough, nothing could be further from the truth when it comes to the deeper implications of Web 2.0 in the enterprise. Many of the more transformational aspects of the 2.0 era now have extensive groundwork laid for them, are available in genuinely enterprise-ready solutions/pilots, and many have just been waiting for the right situation; the driving need for businesses to change and transform in the face of radically different business conditions.

Why is Web 2.0 particularly interesting right now for the enterprise? Web 2.0 has always been about making the most of the intrinsic power of the network and whatever is attached to it. This can be people (social computing and Enterprise 2.0), low-cost dynamic Web partners (open APIs and cloud computing), the world’s largest database of information, lightweight integration (mashups and Web-style SOA), or maximizing the value of the network itself (the network effects that everyone talks about), and much more. These collectively represent better, more efficient, and less expensive ways to accomplish things that we previously used to do without the network’s help or with methods that didn’t take advantages of how the network works.

Read this year’s Enterprise Web 2.0 predictions for 2009 for more perspective on this topic.

Fortunately, our businesses have become so thoroughly network connected that the inherent efficiency of most 2.0 approaches will now work just as well inside the firewall as outside, though there still remain a few differences.

So what does this mean to the harried businesses looking for new approaches to creating value in a chaotic and unpredictable time? How can this help in cutting costs or driving growth? Here are some practical ways that 2.0 approaches can help organizations grapple with the challenges of 2009. Though some of these have an IT slant, many of them are strategic approaches to Web 2.0 that most organizations can embrace across their lines of business to capture substantially better outcomes.

Note that the struggle with many of these, as with so much of Web 2.0, is that there is a major shift in control, a much higher level of transparency, and an openness that many businesses can be uncomfortable with. However, to organizations that are willing to overcome these largely political, cultural, and mindset challenges, significant opportunities are available for the taking, often for relatively modest investment.

Strategic use of Web 2.0 for growth and resilience

As always, this is not an exhaustive list, though it’s a good start, and only gives a sense of the possibilities. I pointedly left out important areas like mobile, despite prognostications like mine or others lately that it’s a hot subject; it is, it’s just not fundamentally transformative enough at this point. I am sure readers will contribute more below in TalkBack.

1. Move to lower-cost online/SaaS versions of enterprise applications. - Face it, paying for yearly upgrades and new license fees is a major, recurring budget line item most organizations would like to eliminate now that most companies have a computer in front of every worker. Open source software is an option and is certainly cheaper up front, until the support costs and other factors come in. There are, in fact, numerous lower-cost options today for virtually any type of business software but unless it’s browser-delivered, or even better, externally hosted as SaaS, you can’t use the provider’s economies of scale to drive down the full range of costs from deployment of upgrades and technical support to hosting, backups, and management. In general, moving to SaaS for anything that isn’t strategic to the business is the best place to start if you’re trying out externally hosted apps for the first time.

   Strategic applications might be more difficult to migrate to a SaaS model both from a customization and change management standpoint as well as from concerns about governance, reliability, compliance, and regulation. Retraining and data migration are a cost component in SaaS scenarios but are manageable in today’s increasingly online and data standardized world. How much will you actually save? The numbers vary, but recent reports say that moving to a SaaS version of your Customer Relationship Management (CRM) system will save the average firm

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December 4th, 2008

The emerging case for open business methods

Posted by Dion Hinchcliffe @ 10:48 am

Categories: Architecture of Participation, Business Models, Cloud computing, Collaboration, Collective Intelligence, Community, Cost-effective scalability, Crowdsourcing, Customer Community, Customer Self-Service, Design Patterns, Encouraging Unintended Uses, Enterprise 2.0, Enterprise Web 2.0, Governance, Innovation marketplace, Network effects, Open APIs, Radical Decentralization, SaaS, Social Media, Social Software, Social media, User Generated Content, Web 2.0, Web as Platform

Tags: Network, Industry, Business, Business Strategy, Business Method, Reasons Organization, Dave Bort, Internet, Strategy, Open Source

The Internet has been the genesis of countless useful business innovations over the last several decades. These include a globally unified e-mail network, the advent of search engines, the rise of rich user experiences and SaaS, and most recently cloud computing to name but a few. But perhaps one of the most far-reaching innovations was the Internet’s ability to enable the creation and organization of the open source movement, arguably the most important progenitor to most things 2.0 and perhaps eventually to business in general.

The business world of the next decade will look quite different from today and require different values and management styles to match.While open source itself is mostly closely associated with the creation of free software in the Internet age, the associated concepts of open collaboration and open information sharing has roots in the early scientific community, where the (mostly) transparent sharing of ideas and data was the most effective way to enable progress. Related trends such as open data and the Web 2.0 model of open content reflect the now widespread activity of open information sharing and exchange using primarily a commons-based approach, enabled greatly by pervasive world-wide networks such as the Internet.

Given the current size of the Internet, about 1.2 billion people, tapping into and unleashing the enormous productive capacity and latent knowledge at the edge of the network has become one of the most powerful and underutilized economic resources available to businesses today. Accessing this effectively ahead of the competition has been the explicit (though too often unstated) premise of countless Internet startups. It’s turned out that companies with a native “Web DNA” have the best perspective to see the fundamental potential here better than their traditional business counterparts. Most businesses still look at the network mostly as a secondary channel for activities such as value inputs, customer relationships, and worker communication and collaboration and not the most valuable one. This is primarily because they’ve traditionally had more dominant and important channels.

But this is starting to change. Through continuous and very widespread experimentation and endeavor, open models of communication, information, and even the creation of products and services, have emerged as a proven and highly effective way to directly drive business activity in entirely new and powerful ways. It’s largely thanks to things like open standards, open source, and open content (aka user generated content and peer production) which have tremendously challenged and even up-ended the old world models of proprietary formats, commercial software, and traditional media respectively.

All this might seem a familiar story but these methods, still too pent-up in a world of high technology and Internet businesses, have begun to spread beyond their origins in software and content and become an significant avenue of opportunity across all aspects of business, albeit involving both great rewards and significant challenges. Particularly in these trying economic times, open models have begun providing the crucial, raw ingredients for a fresh, new perspective in the way we look at how we operate our businesses.

Enterprise 2.0 is just one good example of the emerging intersection of many of these open trends combining open collaboration where anyone can collaborate with globally visible information sharing. It’s also one of the most immediately appealing models to most businesses since it doesn’t necessarily entail many of the risks and challenges that more external modes of open engagement would require. In other words, businesses today are generally comfortable with achieving objectives with the assistance of 3rd parties in an outsourcing or partnership model, but they are generally not as comfortable with using open sourcing or crowdsourcing to achieve the same objectives.

The reasons organizations are wary of more open and 2.0 models for sourcing work and information are many and varied but it generally boils down to four reasons:

1. Lack of familiarity. Despite the extensive body of knowledge that has accumulated, particularly in the software and media industries, there is a broad lack of understanding of how open models work for those whose line of business lies outside the technology industry. These include how to start and successfully manage open business methods as well as the various governance, legal, and brand issues that open models involve, to name just a few. While many businesses are in fact evolving and expanding their Internet channel, most executives are not yet tracking how these open methods can potentially generate much greater value for less cost across their organization, something that most businesses would find very attractive right now.
2. Poor evidence in their industry. Most organizations are medium-to-slow adopters or fast followers, not

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November 4th, 2008

Open APIs reach new high water mark as the Web evolves

Posted by Dion Hinchcliffe @ 12:27 pm

Categories: Badges, Business Models, Cloud computing, Cost-effective scalability, Design Patterns, Encouraging Unintended Uses, Enterprise Mashups, Enterprise Web 2.0, Gadgets, Global SOA, JSON, Lightweight Service Models, Mashups, Network Effects, Network effects, Open APIs, REST, Radical Decentralization, Right To Remix, SOA, SOAP, Small Pieces, Loosely Joined, Web 2.0, Web 2.0 Platforms, Web as Platform, Web services, Widgets

Tags: Web, API, Channel Management, Internet, Marketing, Dion Hinchcliffe, Business Leader

Late last week an important milestone for the Internet was quietly reached as the number of available open Web APIs crossed the 1,000 mark, according to the popular API tracking service, Programmable Web.

We are nearing the time when opening our supply chains across the Web isn’t just a good idea, it will be essential for competitive survival. While still seemingly small in number compared to the number of traditional Web sites that exist, open APIs have become an increasingly vital story for Web startups and traditional firms alike to cost effectively partnership, expand the reach of their products (and especially their data), and drive their network effect deeply across the Web.

It’s now almost uncommon to see a new Web product that doesn’t sport a shiny new API so that other online products can integrate the pieces they like into new experiences and offerings. In short, APIs allow a Web application or online business to have thousands of points of presence in other products, instead of just one.

Though APIs were pioneered by many of the original, successful firms on the Web including eBay and Amazon, which can both cite considerable returns for their efforts, it’s only been in the last couple of years that APIs have been taken seriously in a widespread way by the Web community and have become a new competency area.

In my discussions with many companies, one of the biggest obstacles to adopting APIs is a lack of understanding of what a non-visual Web presence looks like and how to build a business model around it. Business leaders are much more likely to understand investment in a traditional Web site, which they are familiar with and understand somewhat, than in an online software development kit, which is more developer-centric and which they are much less likely to fully appreciate, even though APIs can often have more strategic value than a Web site.

The good news is that emerging case studies and the impressive numbers from Amazon earlier this year are showing the the way and there has been a noticeable change in attitude and uptick in interest since cloud computing became such a big topic over the summer.

Yesterday, Programmable Web’s John Musser summarized some of the more interesting findings

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