Pretzel Logic – Enterprise 2.0

Last week was a big news week for Enterprise 2.0. It all started with this report from Oliver Young of Forrester Research stating that nearly one in two businesses will make use of Enterprise 2.0 technologies in 2009.

The Forrester Report was followed up with a post by Dion Hinchcliffe on ZDNet (“The Year of the Shift to Enterprise 2.0”) citing “The tools have arrived. How enterprise knowledge and is created and flows within our organizations is beginning to change dramatically.”

I absolutely hate throwing cold water on a promising data point, but I’m having serious difficulty reconciling these take-aways in the face of a bunch of other findings. Here goes….

The footnote behind Implementation numbers

I’m as much of an Enterprise 2.0 cheerleader as the next guy and I even make a very good living off it. But let’s be honest here. Whilst the report says 1 in 2 companies will deploy some Enterprise 2.0 tool, a more glaring finding is that only 1 in 10 users adopt the tools, once deployed.  What good does that do to anyone? “Enterprise 2.0 faces serious risk of fizzling out” should have been a bold warning in the summary of the Forrester report.

A recent teaser of “Intranet 2.0 Global Survey” based on 552 organizations shows that social computing technologies such as social networking and mash-ups have very tepid uptake. Take this comment for instance:

Social media adoption has accelerated on the corporate intranet, led by blogs, wikis and discussion forums. Despite a low cost of entry—often below $10,000—adopters are not reporting outstanding satisfaction with the investment, especially among the executive ranks, driven by inadequate planning and weak or non-existent business plans.

and…

Satisfaction levels with Intranet 2.0 tools is low:

• Only 29% of organizations rate the tool functionality as good or very good; 24% rate them as poor or very poor
• Satisfaction rates with executives is dangerously low: only 23% of executives rate the 2.0 tools as good or very good; 38%% rate them as poor or very poor

Discussion Forums and Wikis driving usage

Discussion Forums and Wikis are some of the technologies that are on top of the heap when it comes to interest.

First, granted that Discussion Forums have evolved, but really, they’ve existed for decades before the advent of Enterprise 2.0. There’s been plenty of momentum behind this social computing technology and Enterprise 2.0 can hardly take credit for generating interest.

Moving on to Wikis. Looking at the evolving vendor landscape, its clear that Wikis have not proven to be a strategic investment and have quickly fallen into the commodity category. See how SocialText, previously a Wiki-only provider has now enrichened its offering with Social Networking and Micro Blogging. Similarly, Atlassian Software’s Confluence 3.0 product (Wiki Software, today) is expected to include Social Networking and Microblogging software.

If achieving an Enterprise 2.0 design for your organization can be executed by Discussion Forums, Blogs and Wikis, congratulations. You’re on your way. To really affect the way partners, suppliers and employees accelerate business activity, it’s going to take a lot more than that and the evolving vendor product offerings is proving this.

Distribution and Adoption

If 2009 is the year of Enterprise 2.0, where are the distribution channels? None of the larger SIs have declared intent or even large scale interest in creating practices, as of this time.  I’m not talking about social computing technology distribution (where SaaS can remove the need for traditional SI implementations). I’m referring to Enterprise 2.0 enablement which is much larger than a point solution or a platform implementation. Its the stuff that has to do with business execution and adoption.  A new crop of E2.0 consulting firms will emerge to will lead the charge here but that hasn’t happened yet.

Every E2.0 vendor I’ve interacted with is constrained by economic realities when it comes to blowing up a large consulting force that can truly transform their customers into a 2.0 design. The good ones understand the need for this and would love to do it but alas, its not meant to be in the near future.

Last week, I attended the TieCON 2009 event where I had the opportunity to listen and learn from Brad Smith, CEO of Intuit. It was one of the best keynotes I’ve ever sat in on. Amongst other things, Brad talked about how they generated 2,100 new ideas in 15 months by allowing employees to spend 10% of their time generating ideas. Now they may well be using an innovation platform such as Spigit or some combination of open collaborative technologies. But its the organization design and behavior change that made this a reality. Any application used was instrumental I’m sure, but only a piece of the puzzle.

The final proof

I was pretty much done making my case until I saw this excellent write up by Enterprise 2.0 colleague, Susan Scrupski about her thoughts on Sapphire, the SAP conference that explores innovative business solutions. Susan highlights how Enterprise 2.0 was largely sidelined at this important event. Some selected quotes here:

The reality is SAP and its global customer base are just not ready for the socialization of the enterprise. It’s just not a topic that commands attention at this massive event (despite my valiant efforts to bring it up in every executive briefing). The majority of conversations at SAPPHIRE revolve around common themes such as decision-making, analysis, data, spreadsheets, databases, reports, statistics, and business processes. In other words, the real work that goes on in real businesses. Is that surprising? No.

and….

Last year, if I searched on Enterprise 2.0, I’m fairly certain I would have found zero returns for scheduled sessions. That there are two this year is, indeed, progress. Further, the soft language of 2.0 has seeped into SAP’s strategic speak and hopefully, strategic consciousness. Leo Apotheker, SAP’s co-CEO and reigning commander in chief name-dropped a smattering of prevailing social buzzwords in his opening address i.e., transparency, collaboration, trust, and social communities. So, a big high-five from me to the speech writer for positioning SAP as a “we get it.” And, in reality, they do get it. They just haven’t incorporated deep social-collaborative functionality into their product suites (yet). This is about where the majority of large customers are. They “get it.” Some may be even experimenting with it (even if they’re not calling it Enterprise 2.0), but it’s not yet core to their business.

Sure, larger firms take a while to move into new territory but they generally start talking about new concepts early on if they consider them to be strategic to their business and technological roadmap. When one of the worlds largest business software vendors is just about dipping its toes into the E2.0 waters, you have to think about how long social computing deployments are going to remain point solutions and purely emergent before they can be DNA changing in any way.

End Note

What the news of last week tells me is that there’s an uptake in social computing technology interest. But Enterprise 2.0? Not by a long shot. Here’s the difference.

I think its time to call out purely emergent implementation models (not that there’s anything wrong with that) vs. strategic use of social computing to achieve open collaborative and transactive work models.  Both have their place. But only the latter leads to an Enterprise, destined to achieve a 2.0 design.

By the way, if any of this is important to you, consider coming to the Enterprise 2.0 conference in Boston next month where I expect such topics to be discussed at length. Use this link for a 30% discount.

Over on the Enterprise 2.0 Blog, Venkatesh Rao of the Xerox Innovation Group makes a compelling case that “there is no such thing as culture change”. He goes on to list five ways to get out of the culture change argument, summarized below:

• Culture change naturally takes place because “nay-sayers retire or die out and get replaced by others. Resistance ceases because the resisters leave, and because the adopters are younger and are clearly producing more value using their ideas.”
• Inefficient or more difficult user experiences that make the transition from old to new more difficult.
• Careful alignment of incentives for those moving from old to new systems.
• Given that “people self-select into cultures containing people they want to be socially connected with” make HR needs to compete to hire those that are likely to fit into the culture your trying to grow into.
• Start at the periphery of inefficient processes and systems. In other words, start circling injured systems and be ready to step in when they cease to exist.

Noted consultant and ReadWriteWeb blogger, Susan Scrupski puts forth the most compelling rebuttal in the comments:

The 2.0 philosophies of openness, sharing, flattened hierarchies, emergent outcomes, transparency and unfettered collaboration are anathema to nearly 100% of the large organizations I’ve encountered in my zeal to evangelize e2.0.

Realistic roadblocks are presented by management with invested power/influence, governance (regulation) and legal concerns, and yes, the 9x factor that McAfee pointed out early on, which you’ve also alluded to. I do agree with you regarding the user experience and likelihood of adoption, however.

A command and control corporate culture that spawns fear, protectionism, and paranoia will never be a good candidate for e2.0. When we say it’s more about the people than the technology, this is what we’re referring to. The technology is liberating, but unless every vested member in the org chart is willing to be freed from industrial age convention, it’s unlikely change will come soon. These are corporate culture issues and they’re pervasive in the adoption story. I covered this in a post about a year ago on ITSinsider.

So whose wrong and whose right? Can you overcome the culture argument if you follow Venkats’ antidotes? Or is Susan pouring a solid dose of reality on what happens when the decision makers get in a room together.

They’re both right. From a macro, organization wide perspective, both buyers and sellers of the social computing promise will need to address and respond to shifts in the organization that Venkat brings up. Likewise, as Susan correctly says, fill a room with LOB executives, HR and IT and sell them on using software that makes the organization social, and you’re going to see some serious push back for all of the legitimate reasons she enlists.

The problem (and opportunity) here is the underlying premise:

Collaboration, Wikis, social networking or some other form of social computing technology is positioned as a better way to work, discover, save costs, etc. LOB Executives, HR and IT get in a room and try to ascertain the opportunity and risks of company wide adoption. They may reach different conclusions but you can pretty much guarantee that the weakest link (read: parts of the organization where culture can in fact be a serious impediment) will get extrapolated to estimate enterprise wide success or failure.

The most simple culture busting argument IMO is focusing on how social computing exponentially accelerates individual business activity. Prove that you can accelerate performance in a particular area and few decision makers are going to care if the execution involves social computing, hula hoops or whatever else.

So what’s required to tactically execute the justification of a social computing transformation and busting the dreaded culture roadblock? There’s obviously a few approaches but this one has worked for me. Heads Up: This is somewhat of a long story so please bear with me as I set the context and result.

The Backdrop – A primer on Hi Tech Partner (SI) Sales

I’ve been facilitating a strategy session with the EVP of Global Marketing of a F500 Hi-tech technology provider and his direct reports.

The organization depends heavily on the System Integrator (SI) partner ecosystem to push product. If you’re not familiar with the channel business, a good number of technology providers rely on SIs to reach their target market. It’s the SI that often gets the RFP from prospects and it’s up to them to propose the necessary strategy and technology solutions required to solve a problem. For those technology vendors that want to get their technology solutions on an SI’s proposal, the onus is on them to not only provide product details but to also provide all the supporting proof points that shows how their solution is in fact better than that of their competitors.

It’s a bit of a cynical statement but after conducting needs assessments for well over a 120 channel sales reps, partner development managers and LOB channel execs at different clients (as a precursor to design, sourcing and ‘operationalizing’ of collaborative extranets), the general consensus I’ve seen is that the vendor has to back fill strategic technology thought leadership elements of the SIs proposal. The more perceived/real commoditized nature of your offering, the higher the chances that the SI picks the provider that makes it easiest for them to improve the probability of sale. What’s more, it’s the SI who’s regularly playing golf with the CXO at the customer and formally pitching or informally educating the customer on what’s hot and what’s not in the evolving technology landscape. So as a technology provider, you better make it dead simple for the SI to have access to the latest information, proof points, reference architectures, experts and so on. Reliable and timely data and expert access is as much of a competitive advantage as is the long string of product differentiators you can cook up.

The Social Computing Context

Back to the client discussion. We investigated a seemingly crazy hypothesis that there needs to be a way for the technology vendor to provide a guarantee to SI partners that all supporting product documentation and access to known and unknown subject matter experts (SME) will be made available either in real time or one communication instance away. No hunting within stale portals, partner directories or extranets, emailing account teams, risking reliance on outdated pre sales material, or chasing the account manager for the answer to time sensitive questions. Convince the partner that if the data and resources come from this technology provider, its legit.

We agreed on primary pain points in the SI partner collaboration process, folded in anecdotal field data and got partners to chime in on an optimal collaboration model. We then came up with a blueprint of the what the new interaction model needs to look like to successfully grow their share of partner wallet.

It was about 70% into the process that we really started talking about the required mix of technologies needed, to realize such a business objective. Low and behold, the resulting recommendations for collaborative, micro-messaging and alerting architecture, candidate solutions providers and operational design centered around so called Enterprise 2.0 solutions. But no one really cared what label was slapped on to this ‘nirvana’ after-state.

By the time the words “culture”, “risk”, “feasibility” and “switching cost” came up, they were well into identifying which partners to approach for a very contained pilot. At this stage, the impediments I list above were not seen as deal breakers, rather, as obstacles that needed to be addressed. Think about it: What new program, whether timid or bold, doesn’t have obstacles? This was no different. Clearly identified participant incentives, the attractive cost structure of social software and business value, provided the necessary chutzpah to take this on.

Stowe Boyd said it well on his Open Enterprise 2009 panel at the Web 2.0 Expo. My re-tweet on Twitter here:

It’s a huge disservice to the promise of social computing when you’re advocating the software and not the benefit. The best case outcome is an average benefit emerges across the organization. The worst case is the you encounter the risk of individual department-centric apprehensions getting blown up and being presented as organizational wide toll gates.

So is culture a serious issue? Yes, it can be. In fact when you consider enterprise wide deployments, culture could be a much larger issue for E2.0 software when compared to ERP and CRM roll outs of the late 1990s. The latter was far more expensive but wasn’t dependent on the network effects that E2.0 so desperately needs to be a success. But by focusing on pointed business acceleration opportunities, culture can be turned into a hurdle that you can systematically glide over, as opposed to a brick wall that you slam into.

I’m sure enterprises, customer success teams from social software vendors and consultants are sitting on some really good experiences. If you have successfully glided past the culture discussion (or hit the proverbial brick wall), pipe in, in the comments.

The Economic Times has a story today about how Indian Offshore companies are finding it difficult to outbid global competitors such as Accenture due to a lack of domain expertise. Says the article:

“Multinational companies have presence in multiple geographies, economies of scale, in-depth understanding of client’s business and a global view for many industries and this is where Indian service providers lack. These factors may work against Indian service providers when bidding for a project in the current scenario,” said Mark Toon, chief executive officer, Equaterra, during an ET round-table panel discussion held on the sideline of India Leadership Forum organised by Nasscom in Mumbai.”

I’m sorry but I had to check the date stamp on this article a few times to make sure that its current. Are we in 1999? Indian IT Offshore companies have been working on “domain expertise” for almost a decade now and there’s easily 200 articles out there, dating back 5 years that talk about how competing on price is not sustainable and how Indian services providers are working on becoming more strategic. Its baffling to me that after a decade of amazing gains in market share and the creation of companies that have a market cap of ~ $10-15 billion (Wipro and Infosys respectively), we’re still having this discussion.

The article goes on to say:

From the very beginning, Indian companies have taken up maintenance or secondary application development in most cases. And such a move has resulted in lesser domain knowledge and product development capability. “Indian companies lack experience in green-field application development, which needs very deep domain knowledge,” said Dana Stiffler of AMR Research.

If the last round of technology innovation required services providers to have domain expertise, you ain’t seen nothing yet. As I’ve said before, in my opinion, true Enterprise 2.0 transformation won’t take place in the IT organization. Rather, business groups will take the lead as they see benefits to the process of sales, marketing, HR, etc with the proliferation of participatory media technologies that blow open collaboration opportunities across geographical/functional silos and provide unprecedented levels of insight into a prospects purchase intentions. The need to have business/domain expertise and the required agility to help customers experiment with new approaches to leverage these emerging concepts means much much more focus on business transformation and not just cost savings. Cost savings (as most of them know) is not sustainable, and a new trend explained in this post by Vinnie Mirchandani about reverse offshoring adds additional market pressures.

For the record, I do believe that Indian IT services firms have made good progress in this area and but clearly there’s a lot more to be done. It’s time for Offshore services providers to stop playing catch up on the opportunity of the last decade and to start thinking of what a customer’s business is going to look like tomorrow. Skate to where the puck is going to be.

Good to see IT powerhouses paying attention to Enterprise 2.0. In this post, consulting firm Deloitte Touche Tohmatsu talks about how “enterprises are looking at how they can harness the hierarchy-flattening, information-sharing, team building power of social networks.” They go on to list out a number of social mechanisms such as Syndication, Mashups, Social Networking that are being studied by large IT organizations.

It’s a very succinct summary that will get large enterprises to start to pay attention, if they haven’t already. And it’s a net positive for the Enterprise 2.0 space and so I applaud Deloitte for starting to pay attention early on and engaging in the discussion.

I realize this was a very high level piece but 2 things jumped out at me:

First, there’s heavy focus on platforms that enable content creation. Little coverage on managing the fire hose that’s will emerge shortly after the adoption of Enterprise 2.0 technologies. What’s missing is adequate representation of what Andrew McAfee refers to as Signals in his famous Slates architecture (search, linking, tagging, authoring, extensions, and signals).

Second and on a more ironical note, the Bottom Line section ends with:

“Telecommunications operators and IT solutions providers need to invest in ESN [Enterprise Social Networks] so they have the expertise and credibility to deploy these solutions if or when they become more broadly adopted, and start becoming a more significant source of revenues.”

The first point about Telcos and IT solutions providers investing in these tools themselves to gain expertise is all well and good. But the second statement about services firms waiting for broad adoption and significant source of revenues made me chuckle.

SI’s are the ones that have traditionally driven broad adoption and thereby created cash cow services business around new applications.  Also, I realize that there is such a thing as too early when recommending products, but as trusted consultants, it’s up to them to identify sources of value well before anyone sees it and to recommend and deploy solutions that can give their customers competitive advantage.

End of rant.

So to all you SI’s out there: Start evangelizing Enterprise 2.0 concepts and encourage your customers to experiment with them. Go ahead. Be a Tiger.