Enterprise 2.0: Natural Disillusionment or a Pipe Dream?

Dion Hinchcliffe kicked off this weekends’ Enterprise 2.0 meme with a well articulated post on determining ROI. The central theme of the article suggests that its challenging to identify where and when E2.0 ROI returns will be realized and why.

Dion goes on to say that IT managers are mainly taking a wait and see approach for the following reasons:

1. One is an broad wariness of a new horizontal information technology approach that purports to solve so many problems and will overlap with existing solutions….

2. 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.

3. Accurate predicting of the return on investment of an IT solution.

Dion’s post follows a series of somewhat realistic (or negative, depending on your view) articles that we recently saw from the likes of Susan Scrupski, Gil Yehuda and to some extent Venkat Rao. Venkat was focused on why culture doesn’t matter but if you look at his reasons (e.g. The Churn argument which states – Radical ideas “get adopted because the nay-sayers retire or die out and get replaced by others.”), it’s bordering on wrist-slitting, depressing outcomes, required to make Enterprise 2.0 a reality.

In a 2008, Gartner Research defines the Hype Cycle of Emerging Technologies as:

  • Technology Trigger
  • Peak of Inflated Expectations
  • Trough of Disillusionment
  • Slope of Enlightenment
  • Plateau of Productivity

In his post labeled, “Enterprise 2.0 and the Trough of Disillusionment“, Hutch Carpenter creates a good summary post that explains that Enterprise 2.0 has graduated into the “trough of disillusionment” implying much needed hope that the “Slope of Enlightenment” will soon be upon vendors and customers alike.

I was thrilled to see Dennis Howlett chime in on this topic this morning with his post titled “Enterprise 2.0 promise is years off…if it materializes.” Some key quotes for me:

“Marketers would do far better to concentrate on a sliver of functionality that has meaning to the C-suite rather than grand statements, laced with competitive FUD.”

“The problem comes down to the individual perception of IP value and how that might be threatened”

“For instance, I’d be far happier to see cases where there is an identified pain point and then build out from there rather than dangling cascading network effects further down the line.”

The last quote above, my favorite by a mile, really got me thinking about how all this breaks out. Can we rest easy, realizing that we must feel the pain of natural transitioning through the “Trough of Disillusionment”? Will vendors and customers have the stamina to work through the cascading process in Dion’s diagram that will eventually show real return at the point of “3rd order cause and effect”.

Frankly, I’m nervous about both approaches. I don’t believe that most vendors (and the innovation they bring) will be able to withstand this long a process to show real ROI. Telling VC’s that we’re in a “Trough of Disillusionment” won’t be enough to raise the next round of funding in this or any economic climate. In turn, proponents of using social computing software on the customer side will likely get shot down, were they to present a long drawn process to showing real results.

As I’ve said and illustrated earlier, (as does Hutch in his post) focus on the business activity and the pain felt and you have a solid chance of skipping some of the steps in Dions’ diagram above. Sell horizontally (customer wide or employee wide) and you better be prepared to go through each of the 1st, 2nd and 3rd order cause and effects.

My interaction with LOB executives has consistently shown that in this economic climate, the knee jerk reaction has been to pour more money into current programs. New investments are being made for sure BUT instead of experimenting with new software or programs, more money is being thrown at current programs that have historically yielded the best return. With this reality in mind, showing a cascading return that has no definite time line, emanating from a new unproven technology investment, is going to mean certain death for many promising E2.0 initiatives.

Instead, focusing on a specific business activity. Prove results in a contained fashion and illustrate more attractive cost/return when extrapolated across the business unit. This affords the best opportunity to jump the natural evolution cycle and bypass some of the earlier nebulous effects of adoption that can’t be translated into real dollars.

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Glass pipes
Glass pipes

Nice source and thanks for the trips

Ethan Yarbrough
Ethan Yarbrough

Sameer -- Well said. I think you're on to something with the idea of focusing on specific pain points and proving results in a contained fashion (and not just because I was saying something similar on my blog, also in response to Dion's post: http://www.emergingwebmemo.com/2009/04/can-targ...). It's my view that referring to "Enterprise 2.0" as a singular is useful verbal shorthand, but is somewhat inaccurate when we're trying to track or predict adoption of the practices and principles that term represents. There are elements of Web 2.0 that have made their way into the enterprise and are already rising up the slope of enlightenment and emerging on the plateau of productivity -- at least in my experience I've seen Wikis and Blogs settle in within very specific, targeted areas and start delivering very practical, tangible, though unglamorous results in improved productivity, and improved discoverability of institutional knowledge. The individual elements of Enterprise 2.0 that are relevant to the "specific business activity" you mention seem to be climbing the slope much more quickly than elements that require greater change to organizational power structures. Thanks for posting this, I was taken with Dion's ideas as well, I appreciate the chance to engage with you about all of this.

Scott Schnaars
Scott Schnaars

As always, this is a great post. In my work at Socialtext, I find that there are two types of customers that are looking to implement E2.0 solutions. Those with a specific use case that will have a significant positive business impact and those that want to see what will happen.In the first case, with a specific use case, they look at the investment into providing E2.0 to all employees and the ROI of the specific use case. Anything else will be, what one of my customer calls them, 'nuggets'. The platform can be justified with the use case and the true ROI is in the nuggets.To the other group, wanting to see what this E2.0 stuff can really deliver on, everything is a nugget. They are no different than gold miners that simply pan rivers all day. Hopefully they will find a nice big nugget or at least a few little ones, but if they don't, they've spent the day in the sun and have probably met a lot of cool people and have learned a lot about gold mining.In both scenarios, though, the customer is teetering on that Slope of Enlightenment. Most of them will hit that plateau of productivity because there are enough nuggets out in corporate enterprises to continue to justify the investment. For the short term, that plateau of productivity will also be a significant competitive advantage.


Thanks Ethan. Good points.I think true Enlightenment in E2.0 will be kindled by improvements in discovery and aggregation, and better decision making/action - powered by social computing apps. No one comes to work to collaborate. They come to fulfill a responsibility. When the inherent capabilities within enterprise 2.0 tools accelerate the end result, enlightenment will prevail. But that's another show :)


Awesome comment Scott.Lets all hope that there's enough of a market to progress to the "Slope of Enlightenment". Mike Gotta made a great point that currently, ROI is more often an after-the-fact calculation. In other words, folks deploy and then measure results. What would be better is to strive to create Enlightenment via justifiable ROI, right after "Inflated Expectations". Skip the "Trough of Disillusionment" altogether :)


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