Digital Digest – Managing Intelligence
In this multi-media Digital Business digest we examine how organisations can gather information, analyse it, and serve it up in a meaningful, usable form
Video: business intelligence in action plus panel discussions
Podcast: disparate sources – how to use data from a decentralised business in several languages The days of the Next Big Thing could be over
Maybe there will be no one idea or invention, but a wave of disruptive technologies
Does IT work? Monitoring staff requires care
Tracking workers via mobile devices raises privacy concerns
Enterprise 2.0 is vital for business
Real benefits await successful adopters of new online tools
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Published on December 10 2009, or download as a pdf
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Wednesday, December 09, 2009
Does IT work? Monitoring staff requires care
Does IT work? Monitoring staff requires care
By Stephen Pritchard
Published: December 9 2009 16:29 | Last updated: December 9 2009 16:29
New devices and faster networks are driving up productivity by giving mobile workers direct access to corporate e-mail and applications on the move.
Analysis by Research in Motion, maker of the BlackBerry, found improvements in productivity in field service and sales of more than 20 per cent – the equivalent of an additional customer visit each day.
But managing an increasingly mobile workforce poses challenges for businesses.
Tools for managing the mobile devices themselves, such as the BlackBerry Enterprise Server, Microsoft’s System Center Mobile Device Manager (SCMDM), or LogMeIn Mobile are now reasonably mature and give strong levels of control over device content management and security. But managing the staff using the devices is more complicated, and more controversial.
Smartphone and personal digital assistant technology allows businesses to monitor where employees are, at any time, via GPS (global positioning system) chips.
With more smartphones and PDAs now offering GPS to support mapping and navigation software, businesses can tap into the data via specialist software that reports employees’ locations by linking location data to a business application, or through fleet management and tracking systems.
Businesses can also monitor their employees much more accurately by looking at the workflow information produced by mobile versions of CRM, salesforce automation, or other enterprise applications.
Monitoring technology, though, raises concerns about employee privacy, as well as the impact such data collection has on workforce autonomy, incentives, and management practice.
Although the technology exists to track exactly where someone is, if not what they are doing, it is often a poor substitute for supervision by experienced foremen and managers.
“Workforce tracking is a natural outgrowth of knowing where your assets are,” says Kevin O’Marah, chief strategy officer at AMR Research, an analyst company that specialises in technology for vertical markets such as retail, distribution and manufacturing.
“Tracking [individual] people is much more sinister, but the technology makes it very obvious where people are. Most of the value in track-and-trace comes from tracing assets such as trucks, and from areas such as speed monitoring. You can find out if a truck has been racing along at 85 miles per hour, and then the driver took a long break. Companies care because of fuel efficiency.”
Drivers of vehicle and industrial plant – often with price tags of $250,000 or more – accept a certain degree of monitoring as part of their jobs. And, according to Bob Walton, president of Qualcomm Enterprise Services, the potential downsides can be offset by providing services the drivers value, such as the ability to complete paperwork and training via an in-cab console.
Use of tracking systems does become more contentious if employees are expected to carry monitored devices outside the cab; extending the technology further, to an individual’s BlackBerry or iPhone, is even more likely to raise concerns.
“It is being done, especially monitoring where people are, in order to route them to the next job,” says Nick White, telecoms director at Deloitte, the professional services firm. “But there is absolutely an issue about privacy.”
Much depends on the degree of autonomy that different types of worker need, or expect. “If you try to control a salesforce to the nth degree, you will get resistance,” says Mr White. “If it is engineering, you want the workforce to be focused on the task, not worrying about what the next job will be.”
Some people will even appreciate a degree of monitoring, for example if they work alone in potentially hazardous or dangerous areas. Lone worker monitoring has already proved popular among groups including taxi drivers, and health care workers, who appreciate the improved sense of safety it brings.
Then there is the question of making up lost time, especially for employees who work on commission.
“People cancel appointments, so a salesperson wants to know who is the next best person to call on, who are the nearest customers or perhaps, those who recently ordered from the competition,” says David Perry, a director at Cognito, a specialist mobility vendor.
Mobile device user Mitie Pest Control uses device tracking to allocate employees to jobs, to monitor how long jobs take and also to ensure customers sign for any work carried out.
Although the company does use the technology to track the productivity of individuals, managing director Peter Trotman stresses this will not work if the result is simply heavy-handed management. There has to be feedback and training for staff who perform less well.
“There was some scepticism and resistance initially, as with any technology,” he says. “But because it replaces tedious paperwork and provides more accurate information, our staff have found it helps. They accept it as a useful tool, not an inconvenient management oversight.”
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
By Stephen Pritchard
Published: December 9 2009 16:29 | Last updated: December 9 2009 16:29
New devices and faster networks are driving up productivity by giving mobile workers direct access to corporate e-mail and applications on the move.
Analysis by Research in Motion, maker of the BlackBerry, found improvements in productivity in field service and sales of more than 20 per cent – the equivalent of an additional customer visit each day.
But managing an increasingly mobile workforce poses challenges for businesses.
Tools for managing the mobile devices themselves, such as the BlackBerry Enterprise Server, Microsoft’s System Center Mobile Device Manager (SCMDM), or LogMeIn Mobile are now reasonably mature and give strong levels of control over device content management and security. But managing the staff using the devices is more complicated, and more controversial.
Smartphone and personal digital assistant technology allows businesses to monitor where employees are, at any time, via GPS (global positioning system) chips.
With more smartphones and PDAs now offering GPS to support mapping and navigation software, businesses can tap into the data via specialist software that reports employees’ locations by linking location data to a business application, or through fleet management and tracking systems.
Businesses can also monitor their employees much more accurately by looking at the workflow information produced by mobile versions of CRM, salesforce automation, or other enterprise applications.
Monitoring technology, though, raises concerns about employee privacy, as well as the impact such data collection has on workforce autonomy, incentives, and management practice.
Although the technology exists to track exactly where someone is, if not what they are doing, it is often a poor substitute for supervision by experienced foremen and managers.
“Workforce tracking is a natural outgrowth of knowing where your assets are,” says Kevin O’Marah, chief strategy officer at AMR Research, an analyst company that specialises in technology for vertical markets such as retail, distribution and manufacturing.
“Tracking [individual] people is much more sinister, but the technology makes it very obvious where people are. Most of the value in track-and-trace comes from tracing assets such as trucks, and from areas such as speed monitoring. You can find out if a truck has been racing along at 85 miles per hour, and then the driver took a long break. Companies care because of fuel efficiency.”
Drivers of vehicle and industrial plant – often with price tags of $250,000 or more – accept a certain degree of monitoring as part of their jobs. And, according to Bob Walton, president of Qualcomm Enterprise Services, the potential downsides can be offset by providing services the drivers value, such as the ability to complete paperwork and training via an in-cab console.
Use of tracking systems does become more contentious if employees are expected to carry monitored devices outside the cab; extending the technology further, to an individual’s BlackBerry or iPhone, is even more likely to raise concerns.
“It is being done, especially monitoring where people are, in order to route them to the next job,” says Nick White, telecoms director at Deloitte, the professional services firm. “But there is absolutely an issue about privacy.”
Much depends on the degree of autonomy that different types of worker need, or expect. “If you try to control a salesforce to the nth degree, you will get resistance,” says Mr White. “If it is engineering, you want the workforce to be focused on the task, not worrying about what the next job will be.”
Some people will even appreciate a degree of monitoring, for example if they work alone in potentially hazardous or dangerous areas. Lone worker monitoring has already proved popular among groups including taxi drivers, and health care workers, who appreciate the improved sense of safety it brings.
Then there is the question of making up lost time, especially for employees who work on commission.
“People cancel appointments, so a salesperson wants to know who is the next best person to call on, who are the nearest customers or perhaps, those who recently ordered from the competition,” says David Perry, a director at Cognito, a specialist mobility vendor.
Mobile device user Mitie Pest Control uses device tracking to allocate employees to jobs, to monitor how long jobs take and also to ensure customers sign for any work carried out.
Although the company does use the technology to track the productivity of individuals, managing director Peter Trotman stresses this will not work if the result is simply heavy-handed management. There has to be feedback and training for staff who perform less well.
“There was some scepticism and resistance initially, as with any technology,” he says. “But because it replaces tedious paperwork and provides more accurate information, our staff have found it helps. They accept it as a useful tool, not an inconvenient management oversight.”
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
The days of the Next Big Thing could be over
The days of the Next Big Thing could be over
By Alan Cane
Published: December 9 2009 16:29 | Last updated: December 9 2009 16:29
The main difficulty in predicting the “next big thing” – apart from the ambitious nature of the task – lies in defining just what a “big thing” is.
Is it something that will have a lasting and material impact on society – the emergence of revolutionary inventions – the transistor, for example, or the integrated circuit and the microprocessor?
Or could it be software – the Cobol programming language that changed business data processing and continues to influence its progress?
For some, systems are their “big thing” – the advent of mobile phone networks in the 1980s, followed by the internet, and with it e-mail and the world wide web. Today, many believe “the cloud”, an abstraction that represents the electronically interconnected world, fits the bill.
But as Rob Gear, manager of PA Consulting’s innovation unit points out: “Some breakthroughs will transform life for certain people in certain geographies but that same breakthrough will have little or no relevance for others. A BlackBerry or iPhone might have transformed the life of your average urban office worker but it has had little or no bearing on the life of the tribesmen of the Masai Mara.”
Mr Gear’s colleague, David Elton, however, thinks that “big things” are less rare than is believed: “These are things that have changed the way we live and work: search engines, text messaging, wikis, bar codes, RFID (radio frequency identifiers), liquid crystal displays and cheap disk storage.”
He says “market moments” – the coming together of technology, price point and market demand – define big things, giving as an example online retailing: “The first time round in 2001-2003, it was a damp squib. The second go, from 2004, took off like a train. The difference: a market moment. People wanted it, the technology was there; they just needed secure online payment mechanisms.”
Some developments have universal significance. Kishore Swaminathan, chief scientist at Accenture’s technology laboratories, believes no single thing is the answer – it is more a phenomenon, or “scale”.
“The necessity that will drive all future inventions of significance is exponential growth,” he says. “We currently understand linear but not exponential growth. Successful companies, inventions and societies will be those that master scale. Three specific areas of necessity will drive invention – energy, health and mega-cities. Scale is not the same as big. The dinosaurs were big, the internet has scale.”
Rudy Puryear, head of Bain & Company’s global IT practice, argues that businesses are facing structural shifts that will “easily trump emerging technologies as the ‘next big thing’.”
He points to IT collapsing under its own weight: “In a recovery, the fact that IT can no longer respond within a reasonable time cycle will come to the fore. We are expecting to see a surge in IT projects that actually address complexity.”
He says that chief information officers must regain the right to take centralised decisions and that outsourcing will change from cost tactic to strategic weapon: “The smartest CIOs will find ways to use outsourcing providers to do more than cut costs.”
Industry experts such as Joerg Heistermann, chief executive of the Americas Region for the business process management software group IDS Scheer, doubts that 2010 will see breakthrough technologies, arguing that existing developments such as cloud computing may offer amazing possibilities.
“Real innovation is hard,” he says. “It means the destruction of what exists today and requires that we convince people to change . . . an IT industry devoid of supposed breakthroughs would still have plenty of work to do with our bread and butter – continuous improvement.
“Connecting customers and providers, optimising supply chains, streamlining accounting or making interfaces easier to use – these recurring projects are constantly needed to improve any company’s efficiency, customer satisfaction and profitability.”
A number of experts, including Colin Bannister, head of technical sales for Computer Associates UK, also argues that there will no single “next big thing” but instead, waves of disruptive technologies “which will ebb and flow”.
“The risks around them must be managed, complexity removed and company-wide management tools made available to CIOs, if these technologies are to provide added value for businesses within today’s rapid timeframes for payback,” he predicts.
As examples, he cites service-oriented architectures, virtualisation and cloud computing, pointing out that each can increase risk and complexity unless tightly managed.
Growing complexity also worries Karl Havers, head of Ernst & Young’s European technology team, who admits to simple personal requirements: “Let me use three devices instead of a dozen connecting me through the smart grid to my home, shopping, car and family.
“Let that happen far faster than currently and when I want it. Oh, and I would like to be able to rely on simple things like mobile networks to work and not drop calls and the voice quality on my landline to be as good as it used to be when using voice over internet protocol and a remote handset.”
Mr Havers concludes: “The next big idea will be about solving the confusion and plethora of alternatives for people, making things simple and reliable.”
For a contrary view, I spoke to Josh Bernoff, senior vice-president with the consultancy Forrester Research, who says that employees and customers are already taking technology into their own hands with dramatic consequences: “No matter what company you work for, your employees have better technology than you,” he says.
“With their iPhones, their Facebook connections and cheap computing power for rent, they can solve their own problems using technology. They’re building the solutions your company will run on right now, right under the noses of your IT department staff.
“We can tell you about the marketers at Black & Decker who let salespeople use little video cameras to gain an edge on the competition. Or the guy at the US State Department who built his own teleconferencing application to spread US ideas around the world. You can embrace their problem-solving power, or you can hide in a corner,” he challenges.
In fact, an intersection between unified communications (UC) and social networking is already developing, according to Neil Louw, CIO at Dimension Data Europe: “More businesses are realising the potential to harness the burgeoning ‘unified communications mindset’ of their employees – developed through the personal use of tools common to UC and social networking, such as instant messaging, webcams and groups – by introducing enterprise-ready equivalents as part of their UC strategy.”
Cloud computing, however, is high on many lists of likely barnstormers. Hub Vandervort, chief technology officer of Progress Software, believes adoption will be faster than most analysts think because of economics: “It’s a simple empirical model: in a 1,000-machine data centre, efficiency will typically be at 20 per cent to 30 per cent. Getting a further 10 per cent from your infrastructure by moving it to the cloud will save $6m a year – and many data centres are far larger than 1,000 machines,” he says.
Andrew McGrath, commercial director for the communications group ntl:Telewest Business agrees that the benefits and efficiencies of cloud computing and server virtualisation could prove too good to ignore.
“This, in turn, will make the network underpinning these IT initiatives even more important. As a result, the next big thing for business will be the adoption of Ethernet networks. Capable of transporting huge volumes of data at great speed, they are the key to success for the adoption of technologies that rely on shared services.”
And here is a wild card: IBM believes the hottest technology trend of 2010 will be advanced analytics – software capable of making sense of the mountains of raw data companies are routinely storing these days.
IBM argues that predictive analytics will emerge as an essential tool for competitive advantage, focusing on assets – information – that companies already possess.
But even the best predictive analytics are not enough to tell us unequivocally whether they can be the “next big thing”.
On ft.com Alan Cane says: necessity will sort “hot” technologies from the cool, in his regular Perspectives column at:
ft.com/digitalbusiness
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
By Alan Cane
Published: December 9 2009 16:29 | Last updated: December 9 2009 16:29
The main difficulty in predicting the “next big thing” – apart from the ambitious nature of the task – lies in defining just what a “big thing” is.
Is it something that will have a lasting and material impact on society – the emergence of revolutionary inventions – the transistor, for example, or the integrated circuit and the microprocessor?
Or could it be software – the Cobol programming language that changed business data processing and continues to influence its progress?
For some, systems are their “big thing” – the advent of mobile phone networks in the 1980s, followed by the internet, and with it e-mail and the world wide web. Today, many believe “the cloud”, an abstraction that represents the electronically interconnected world, fits the bill.
But as Rob Gear, manager of PA Consulting’s innovation unit points out: “Some breakthroughs will transform life for certain people in certain geographies but that same breakthrough will have little or no relevance for others. A BlackBerry or iPhone might have transformed the life of your average urban office worker but it has had little or no bearing on the life of the tribesmen of the Masai Mara.”
Mr Gear’s colleague, David Elton, however, thinks that “big things” are less rare than is believed: “These are things that have changed the way we live and work: search engines, text messaging, wikis, bar codes, RFID (radio frequency identifiers), liquid crystal displays and cheap disk storage.”
He says “market moments” – the coming together of technology, price point and market demand – define big things, giving as an example online retailing: “The first time round in 2001-2003, it was a damp squib. The second go, from 2004, took off like a train. The difference: a market moment. People wanted it, the technology was there; they just needed secure online payment mechanisms.”
Some developments have universal significance. Kishore Swaminathan, chief scientist at Accenture’s technology laboratories, believes no single thing is the answer – it is more a phenomenon, or “scale”.
“The necessity that will drive all future inventions of significance is exponential growth,” he says. “We currently understand linear but not exponential growth. Successful companies, inventions and societies will be those that master scale. Three specific areas of necessity will drive invention – energy, health and mega-cities. Scale is not the same as big. The dinosaurs were big, the internet has scale.”
Rudy Puryear, head of Bain & Company’s global IT practice, argues that businesses are facing structural shifts that will “easily trump emerging technologies as the ‘next big thing’.”
He points to IT collapsing under its own weight: “In a recovery, the fact that IT can no longer respond within a reasonable time cycle will come to the fore. We are expecting to see a surge in IT projects that actually address complexity.”
He says that chief information officers must regain the right to take centralised decisions and that outsourcing will change from cost tactic to strategic weapon: “The smartest CIOs will find ways to use outsourcing providers to do more than cut costs.”
Industry experts such as Joerg Heistermann, chief executive of the Americas Region for the business process management software group IDS Scheer, doubts that 2010 will see breakthrough technologies, arguing that existing developments such as cloud computing may offer amazing possibilities.
“Real innovation is hard,” he says. “It means the destruction of what exists today and requires that we convince people to change . . . an IT industry devoid of supposed breakthroughs would still have plenty of work to do with our bread and butter – continuous improvement.
“Connecting customers and providers, optimising supply chains, streamlining accounting or making interfaces easier to use – these recurring projects are constantly needed to improve any company’s efficiency, customer satisfaction and profitability.”
A number of experts, including Colin Bannister, head of technical sales for Computer Associates UK, also argues that there will no single “next big thing” but instead, waves of disruptive technologies “which will ebb and flow”.
“The risks around them must be managed, complexity removed and company-wide management tools made available to CIOs, if these technologies are to provide added value for businesses within today’s rapid timeframes for payback,” he predicts.
As examples, he cites service-oriented architectures, virtualisation and cloud computing, pointing out that each can increase risk and complexity unless tightly managed.
Growing complexity also worries Karl Havers, head of Ernst & Young’s European technology team, who admits to simple personal requirements: “Let me use three devices instead of a dozen connecting me through the smart grid to my home, shopping, car and family.
“Let that happen far faster than currently and when I want it. Oh, and I would like to be able to rely on simple things like mobile networks to work and not drop calls and the voice quality on my landline to be as good as it used to be when using voice over internet protocol and a remote handset.”
Mr Havers concludes: “The next big idea will be about solving the confusion and plethora of alternatives for people, making things simple and reliable.”
For a contrary view, I spoke to Josh Bernoff, senior vice-president with the consultancy Forrester Research, who says that employees and customers are already taking technology into their own hands with dramatic consequences: “No matter what company you work for, your employees have better technology than you,” he says.
“With their iPhones, their Facebook connections and cheap computing power for rent, they can solve their own problems using technology. They’re building the solutions your company will run on right now, right under the noses of your IT department staff.
“We can tell you about the marketers at Black & Decker who let salespeople use little video cameras to gain an edge on the competition. Or the guy at the US State Department who built his own teleconferencing application to spread US ideas around the world. You can embrace their problem-solving power, or you can hide in a corner,” he challenges.
In fact, an intersection between unified communications (UC) and social networking is already developing, according to Neil Louw, CIO at Dimension Data Europe: “More businesses are realising the potential to harness the burgeoning ‘unified communications mindset’ of their employees – developed through the personal use of tools common to UC and social networking, such as instant messaging, webcams and groups – by introducing enterprise-ready equivalents as part of their UC strategy.”
Cloud computing, however, is high on many lists of likely barnstormers. Hub Vandervort, chief technology officer of Progress Software, believes adoption will be faster than most analysts think because of economics: “It’s a simple empirical model: in a 1,000-machine data centre, efficiency will typically be at 20 per cent to 30 per cent. Getting a further 10 per cent from your infrastructure by moving it to the cloud will save $6m a year – and many data centres are far larger than 1,000 machines,” he says.
Andrew McGrath, commercial director for the communications group ntl:Telewest Business agrees that the benefits and efficiencies of cloud computing and server virtualisation could prove too good to ignore.
“This, in turn, will make the network underpinning these IT initiatives even more important. As a result, the next big thing for business will be the adoption of Ethernet networks. Capable of transporting huge volumes of data at great speed, they are the key to success for the adoption of technologies that rely on shared services.”
And here is a wild card: IBM believes the hottest technology trend of 2010 will be advanced analytics – software capable of making sense of the mountains of raw data companies are routinely storing these days.
IBM argues that predictive analytics will emerge as an essential tool for competitive advantage, focusing on assets – information – that companies already possess.
But even the best predictive analytics are not enough to tell us unequivocally whether they can be the “next big thing”.
On ft.com Alan Cane says: necessity will sort “hot” technologies from the cool, in his regular Perspectives column at:
ft.com/digitalbusiness
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
Enterprise 2.0 is vital for business
Enterprise 2.0 is vital for business
By Andrew McAfee
Published: December 9 2009 16:29 | Last updated: December 9 2009 16:29
Every day, more companies are deploying the technologies of Web 2.0, and also adopting the approaches to teamwork and interaction that have made Wikipedia, Facebook, Twitter, and other Web 2.0 resources so phenomenally popular.
I call this trend Enterprise 2.0 (E2.0), and have made it the subject of much of my research since 2006.
Corporate executives ask three excellent questions about E2.0. What, if anything, is so novel about it? What are the benefits? And the risks?
Enterprise 2.0 is actually something new. It is enabled by technologies that were not widely available 10 or even five years ago. These include blogs, wikis, social networking software such as Facebook, and “microblogging” utilities such as Twitter.
All of these tools share three fundamental properties. First, they are “frictionless” – easy to learn and make use of.
Second, they are free-form, meaning that they do not have pre-defined workflows and do not place users into categories. Instead, everyone starts as equals, contributing to a blank slate. This sounds like a recipe for chaos, but it is not.
The third property shared by all 2.0 technologies, and the most remarkable, is the emergence of patterns and structure in a system without central co-ordination.
To make this concept concrete when I’m speaking, I ask audience members to raise their hands if their organisation’s intranet is easier to search and navigate than the public internet. Very few hands go up, even though intranets are designed and maintained by professionals whose job it is to build navigable web environments.
The internet works better because even though it is radically decentralised and unco- ordinated it is not unstructured. It has a dense structure defined by all the links between pages.
This structure changes continuously and actually becomes more refined as the net grows. It is emergent, rather than imposed. The technology- enabled communities of Enterprise 2.0 work the same way.
Beyond better intranet navigation, what benefits can an organisation expect from E2.0?
The consultancy firm McKinsey has conducted three annual surveys on this question. In the most recent, published in September, respondents reported benefits that included better access to knowledge and internal experts, greater employee and customer satisfaction, and higher rates of innovation.
The magnitude of the gains was striking, ranging from 20 per cent (innovation rates) to 35 per cent (access to internal experts).
These self-reported and subjective data must be interpreted with caution, but are still compelling. They indicate that real business benefits await successful adopters of emergent tools and work practices.
Such improvements arise because E2.0 brings much-needed technological support to the informal organisation. The formal organisation is characterised by hierarchical organisational charts and standardised, repeatable business processes.
It received a technological shot in the arm in the mid 1990s when large-scale commercial applications such as ERP and CRM became available. Research suggests these applications significantly boosted productivity and performance. They did so primarily by allowing companies to standardise best practices and by making huge amounts of structured data available for analysis.
These tools, however, did not do as much to support the less formal and structured work of an organisation. And as we all know, the informal organisation is tremendously important. It is where many exceptions are handled, questions answered, and connections made. It is also often where novel ideas are sparked and new threats and opportunities identified.
Yet until now, the informal organisation has been almost entirely unsupported by IT. E-mail works when you know who you want to send a message to, but what about when you do not – when you are not sure who has the knowledge or expertise you are looking for?
The first generation of knowledge management systems attempted to address this challenge, but they were too structured; they did not match the emergent nature of the informal organisation.
E2.0 technologies do. When they get going, it becomes easy to find a bit of knowledge, or a knowledgeable person. It also becomes easy to learn what others are working on, and to be helpful to them. And it becomes possible to float a question to the entire organisation.
As Eric Raymond, the open source software advocate, says: “With enough eyeballs all bugs are shallow.” Enterprise 2.0 delivers benefits because it brings all of a company’s eyeballs to bear on challenges and opportunities rather than assigning them only to the “proper” authorities.
Now for the final question: what are the risks of E2.0? I find that they are actually quite small. The tools themselves are comparatively cheap, so financial risk is minimal. The biggest potential threat is that people will misuse the new technologies, either by putting up inappropriate material or by inadvertently revealing secrets.
This very rarely happens in practice, however: my collection of E2.0 horror stories is essentially non-existent. There are two main reasons for this.
First, contributors in corporate environments are almost always identifiable. Without the cloak of anonymity, bad online behaviour is much less common. Second, people know how to behave at work, and most are inclined to do so.
I believe that we are in the early phases of another era of technology-fuelled business improvement. Enterprise 2.0 is bringing significant gains to companies of all sizes, and in all industries.
Given the mismatch between its benefits and risks, and given the competitive imperative to seize all possible sources of advantage, sitting this one out seems like a very bad idea.
Andrew McAfee is a principal research scientist at the Center for Digital Business at MIT. He is the author of Enterprise 2.0, published by Harvard Business Press. His blog is andrewmcafee.org/blog; his Twitter identity is @amcafee
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
By Andrew McAfee
Published: December 9 2009 16:29 | Last updated: December 9 2009 16:29
Every day, more companies are deploying the technologies of Web 2.0, and also adopting the approaches to teamwork and interaction that have made Wikipedia, Facebook, Twitter, and other Web 2.0 resources so phenomenally popular.
I call this trend Enterprise 2.0 (E2.0), and have made it the subject of much of my research since 2006.
Corporate executives ask three excellent questions about E2.0. What, if anything, is so novel about it? What are the benefits? And the risks?
Enterprise 2.0 is actually something new. It is enabled by technologies that were not widely available 10 or even five years ago. These include blogs, wikis, social networking software such as Facebook, and “microblogging” utilities such as Twitter.
All of these tools share three fundamental properties. First, they are “frictionless” – easy to learn and make use of.
Second, they are free-form, meaning that they do not have pre-defined workflows and do not place users into categories. Instead, everyone starts as equals, contributing to a blank slate. This sounds like a recipe for chaos, but it is not.
The third property shared by all 2.0 technologies, and the most remarkable, is the emergence of patterns and structure in a system without central co-ordination.
To make this concept concrete when I’m speaking, I ask audience members to raise their hands if their organisation’s intranet is easier to search and navigate than the public internet. Very few hands go up, even though intranets are designed and maintained by professionals whose job it is to build navigable web environments.
The internet works better because even though it is radically decentralised and unco- ordinated it is not unstructured. It has a dense structure defined by all the links between pages.
This structure changes continuously and actually becomes more refined as the net grows. It is emergent, rather than imposed. The technology- enabled communities of Enterprise 2.0 work the same way.
Beyond better intranet navigation, what benefits can an organisation expect from E2.0?
The consultancy firm McKinsey has conducted three annual surveys on this question. In the most recent, published in September, respondents reported benefits that included better access to knowledge and internal experts, greater employee and customer satisfaction, and higher rates of innovation.
The magnitude of the gains was striking, ranging from 20 per cent (innovation rates) to 35 per cent (access to internal experts).
These self-reported and subjective data must be interpreted with caution, but are still compelling. They indicate that real business benefits await successful adopters of emergent tools and work practices.
Such improvements arise because E2.0 brings much-needed technological support to the informal organisation. The formal organisation is characterised by hierarchical organisational charts and standardised, repeatable business processes.
It received a technological shot in the arm in the mid 1990s when large-scale commercial applications such as ERP and CRM became available. Research suggests these applications significantly boosted productivity and performance. They did so primarily by allowing companies to standardise best practices and by making huge amounts of structured data available for analysis.
These tools, however, did not do as much to support the less formal and structured work of an organisation. And as we all know, the informal organisation is tremendously important. It is where many exceptions are handled, questions answered, and connections made. It is also often where novel ideas are sparked and new threats and opportunities identified.
Yet until now, the informal organisation has been almost entirely unsupported by IT. E-mail works when you know who you want to send a message to, but what about when you do not – when you are not sure who has the knowledge or expertise you are looking for?
The first generation of knowledge management systems attempted to address this challenge, but they were too structured; they did not match the emergent nature of the informal organisation.
E2.0 technologies do. When they get going, it becomes easy to find a bit of knowledge, or a knowledgeable person. It also becomes easy to learn what others are working on, and to be helpful to them. And it becomes possible to float a question to the entire organisation.
As Eric Raymond, the open source software advocate, says: “With enough eyeballs all bugs are shallow.” Enterprise 2.0 delivers benefits because it brings all of a company’s eyeballs to bear on challenges and opportunities rather than assigning them only to the “proper” authorities.
Now for the final question: what are the risks of E2.0? I find that they are actually quite small. The tools themselves are comparatively cheap, so financial risk is minimal. The biggest potential threat is that people will misuse the new technologies, either by putting up inappropriate material or by inadvertently revealing secrets.
This very rarely happens in practice, however: my collection of E2.0 horror stories is essentially non-existent. There are two main reasons for this.
First, contributors in corporate environments are almost always identifiable. Without the cloak of anonymity, bad online behaviour is much less common. Second, people know how to behave at work, and most are inclined to do so.
I believe that we are in the early phases of another era of technology-fuelled business improvement. Enterprise 2.0 is bringing significant gains to companies of all sizes, and in all industries.
Given the mismatch between its benefits and risks, and given the competitive imperative to seize all possible sources of advantage, sitting this one out seems like a very bad idea.
Andrew McAfee is a principal research scientist at the Center for Digital Business at MIT. He is the author of Enterprise 2.0, published by Harvard Business Press. His blog is andrewmcafee.org/blog; his Twitter identity is @amcafee
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