Tuesday, February 19, 2008

Mashup - Web 2.0 with Enterprise (Part 1)

Web 2.0 has been great success story with consumer products but much has still not been said or done with it in the enterprise environment. Pundits and analysts have been toying with idea of web 2.0 in the enterprise sector but surveys show very little actual adoption of web 2.0 in this area. How can the trends be optimistic if surveys show the opposite? The trends have been optimistic but actual implementation of web 2.0 is yet far away from reality. Do we know why?

What is web 2.0 in an enterprise? What do we need to know about web 2.0 that can be applied in an enterprise environment? Web 2.0 is a trend or paradigm that is shaping the next generation of world wide web. But this definition is not enough. Web 2.0 has different meaning for different audiences - technical and business. For technical community it is wikis, blogs, RSS, podcasting, folksonomy, mashups and social networking. From business prospective it is finding new business models and opportunities, marketing new innovative products, engaging large untapped user communities into the businesses and enhancing customer satisfaction and retention to name the few. Where do web 2.0 and enterprise meet (mashup)? We will only be able to answer this question if we understand underlying set of principles of web 2.0 and try to put all web 2.0 blocks together in the enterprise environment.

First lets discuss the core principles of web 2.0. According to Tim O'Reilley, web 2.0 are networked applications that leverage network effects. What is "Network Effect"? It is a situation or effect in which a product or service becomes more valuable as more people use it. It is increasingly focused towards engaging large user communities into the network with new products and services, strengthening the network with shared knowledge pool and collective intelligence, and leveraging the web into business strategies, products and services. Then what is problem with widespread adoption of web 2.0 in an enterprise? We have all its constituents; audience, web, knowledge. The fourth quadrant i.e. product and services, depend and leverage the other three constituents and enable in shaping the new business strategies and opportunities with web 2.0.

Then why are the enterprises not moving as fast as they should have been in adopting web 2.0? Web 2.0 is more than just products, people, knowledge and web, it is also about processes and culture i.e. shift in power and control. Enterprises will have to change the way they do business to take strategic advantage of the web 2.0. It will not be easy to formulate a web 2.0 strategy without changing underlying processes and power switch. It will require an enterprise widespread and dynamic changes since web 2.0 approaches will require self assessment, introspection, risk and new strategic alignment. Web 2.0 is basically a disruptive model that may derail old platforms and business models. Web 2.0 advocates moving away from command and control towards collaboration and teamwork, from push to pull model, from process-centric to people-centric business model.

Even in the presence of directives from top management for enabling this change, enterprises are still unable to implement or deploy the web 2.0 apps? My 2 cents. The single biggest challenge here seems to be the employees. The sheer numbers here present a daunting task of getting them at an equal level of understanding of the new technology and its strategic advantages. It is a challenge to educate them and for many leaders, web 2.0 shift is thus beyond their scope and mandate. Avoiding risks and taking the path of incremental improvements then becomes the easier alternative.

Many companies have therefore adopted web 2.0 principles not as a business strategy but more as an experiments to get on the web 2.0 technology map. These companies are plying low risks strategies and trying to gauge its adoption with respect to business model and corporate culture. It will be interesting to see how many companies deploy web 2.0 as business strategy and change their internal culture, because that is when they take full advantages of web 2.0 principles.

The next challenge is where exactly to apply web 2.0 principles. According to research and surveys, the biggest reasons for widespread adoption of web 2.0 are to cut costs and increase revenue. Nothing new, lets find more. About 80% of companies surveyed see the collaborative aspects of Web 2.0 as a way to increase corporate revenue and/or margins. As a cost-reducer, 30% of companies expect Web 2.0 tools to trim the most in customer-service and support costs. As for increasing revenue, 40% of companies expect web 2.0 will help in acquiring new customers and 25% in product innovations. Generally perception is that collaboration is single greatest reason for web 2.0 adoption within the corporate. So far the largest implementations of web 2.0 are wikis and blogs that have been adopted as next generation collaboration tool.

There are two facets of an enterprise - internal and external. Internal apps are for their employees, internal communication, knowledge sharing and product innovation. External apps are for their customers and partners, marketing and sales, product development, customer services and retention, and new opportunities.

I will drill more into these facets and how web 2.0 can serve them. These apps may use same technologies but differ from how they are provisioned and used. I will start with internal apps in my next post and then discuss the external apps of the organization with reference to web 2.0 in subsequent posts.

Please follow the links below for rest of the series:
Mashup - Web 2.0 with Enterprise (Part 2)
Mashup - Web 2.0 with Enterprise (Part 3)
Mashup - Web 2.0 with Enterprise (Part 4)

1 comment:

Dev said...

The ubiquity of Web 2.0 tools inside Enterprises is inevitable. Wikis and Blogs will redefine the way we comport and interact with internal and external stakeholders. This is driven by the fact that Web 2.0 tools provide a much more lively, engaging and interactive alternative to Web 1.0 tools, as well as email.