Is the Enterprise Afraid of Web 2.0?

Few technological shifts in recent memory have challenged corporate America the way Web 2.0 is doing right now. First you have to decide what the phrase even means, as there’s more than a little debate. Then comes the big question: What if any role does Web 2.0 have in the enterprise?

That question can lead to uncomfortable conversations about collaboration, information-sharing and openness. But discomfort or not, now is the time to talk about how your company might harness this growing online force.

Web 2.0 can be especially challenging for CIOs and IT executives since its growth represents what some may consider “shadow IT.” “Web 2.0 is a revolution,” says Stowe Boyd, a consultant on social technologies and business and a senior consultant with Cutter Consortium. “It challenges a lot of base assumptions people have about how to operate in the world.”

Or how the world is supposed to operate. Unlike what IT executives are used to, “Web 2.0 technologies are coming in from the consumer space, and it’s an interesting reversal,” says John Hagel, longtime Web 2.0 consultant and chairman of an upcoming Deloitte research center on Web 2.0 and other technologies. The norms, standards and mindset of the Web 2.0 crowd are quite different from the typically older current C-suite, he says. “It will be increasingly difficult to enforce the ways of today’s executives.” Think of it like this: What would life be like if you were suddenly forbidden to use either a cell phone or BlackBerry? That’s the equivalent of banning Web 2.0’s tools to those who rely on them.

This problem will be more pronounced when what you might call the Collaboration Generation moves from colleges to corporations. As they have been weaned on the immediacy of texting, innocent of life sans cell phone, and perfectly fine with putting it all out there on MySpace, the rules and timing of information sharing are guaranteed to change with their arrival into the workforce. People will come into the company having always used Web 2.0 tools, says Sylvia Marino, executive director of Edmunds’ CarSpace.com. They’ll find a wiki easy for working in coordination with other organizations, for example. And they’re not going to want to set up a half-hour meeting when they can just IM. CIOs need to embrace these technologies in order to optimize the efforts of both the next generation as well as the one already in the workforce, she says. “Not considering [Web 2.0 tools] is like saying we’re not considering e-mail. It’s another mode of communication that you can use for streamlining, outreach and information gathering.”

One important reason for this is that although the next generation may be more obviously associated with Web 2.0, other generations are already appreciating its value and will demand that companies do too. Web 2.0 tools have gained critical mass in the mainstream and even across age ranges, according to a study by Booz Allen released in January 2007. According to the report, 42 percent of MySpace users and 41 percent of YouTube users are over the age of 35. Web 2.0 seems to cut across age and gender and—more importantly to businesses—it influences purchase decisions. The study’s conclusion: “The need to evolve existing business models by integrating the Web 2.0 environment is urgent.”

Companies need to engage in Web 2.0 discussions and understand evolving customer behavior, says the study. It points to such things as customer interactivity, improved development, and shorter innovation cycles as opportunities (and realities) in an increasingly Web 2.0 world. In fact, those opportunities get to the very definition of Web 2.0.

The Challenge of Web 2.0

“Web 2.0 technologies, as a generalization, are focused on connecting people around applications that get better as more people use them,” says Hagel. For example, Web 2.0 is internal wikis that create a place for global employees to collaborate and brainstorm. It’s blogs that allow a software development team to stay informed without multiple e-mail threads and attachments. And it’s a website that harnesses customers’ opinions for improved products and sales.

Marino puts it this way: “Web 2.0 is both a philosophy and technology. And at its heart is user-generated content.

It’s that philosophy that so many executives may find difficult.

Web 2.0 challenges the core assumptions about information in the corporation—who gets it, who owns it, and who has power because they have it. And that’s a really scary thing for people used to controlling it. “Part of the job of a CIO is to create policies that prevent artificial pockets of power based on secrets and individuals exploiting power and not sharing it,” says JP Rangaswami CIO of Global Services at British Telecom, a passionate supporter of Web 2.0 and open source. “Personally I want to see those pockets of power destroyed.”

Web 2.0 is about the ability to engage and then collaborate, says Alistair Behenna, CIO of Harvey Nash, a global recruitment consultancy and IT outsourcing provider. “I think many people are afraid of that. They’re afraid of corporate blogs, for example. They’re afraid of their own voice. They’re afraid of too much collaboration.”

These fears help explain why Web 2.0 hasn’t quite caught on with the corporate crowd. (Granted, other reasons include not knowing where to start or lack of internal support, but the fear factor may be the most primal reason for many.) Rangaswami believes that Web 2.0’s use in the enterprise is still limited. “There are pockets of experimentation but widespread usage is rare,” he says. Research supports his view. Fewer than 32 percent of North American companies are planning to use Web 2.0 technologies such as blogs and collective intelligence, according to a McKinsey Global Survey, which polled 2,847 executives worldwide. And just 20 percent are planning to use the prototype Web 2.0 tool, wikis.

Web 2.0 in the Enterprise

Proponents of Web 2.0 consider the lack of uptake by the enterprise short-sighted. Web 2.0 represents a “massive opportunity,” says Behenna. “People are going online more and more. People are talking to each other. We have to start listening to what they want.”

Behenna extols the agility of Web 2.0. With Web 2.0 apps he can deliver products—especially collaborative elements—quickly to global users and see an almost immediate ROI given their low entry cost, ubiquity of access and user-based input, he says. Contrast that with weighty traditional elements like document and knowledge management systems that take years to develop, deliver, integrate and gain return from. Web 2.0 is all about lightweight, flexible and simple implementations that populate by usage and gain momentum from day one. Highly visible, highly useable and without the complexity that becomes a barrier to use. Great examples are wikis and blogs. Behenna says that for some companies that use of wikis, they are becoming so pervasive that they’re rivaling traditional knowledge management tools. “And they’re a lot less money,” he says.

Indeed, because of a low initial investment, speed of implementation and ability to quickly judge ROI, Web 2.0 represents lower-risk growth. Harvey Nash recently took up residence in Second Life, where the company features a job board. The company’s Web 2.0 endeavors also include working on “live meeting” sites, and new ways to connect to a social network. Behenna points out that the company’s initial touch is mostly online, one reason he must aggressively determine Web 2.0 opportunities. “What I’m trying to use it for is to change the company by a number of little measures.”

One Web 2.0 site attracting notice in the IT world is Dell’s IdeaStorm. In February 2007 Dell unveiled its Digg-like community-driven website. Users can submit ideas and product improvements, and vote them up or down. Since the site went up, Dell has already implemented 20 ideas based on customer feedback. One that’s getting plenty attention is Dell’s announcement to sell select laptops and desktops equipped with Ubuntu Linux. IdeaStorm not only gave customers Dell’s ear in the general (that customers wanted Linux on computers), but the agility of the tools let Dell get specific about just how customers wanted their Linux. “The Linux community was very loud, so we came back and did a survey, asking what distribution would you like? We got a lot of information back very quickly and were able to also quickly make decisions,” she says Caroline Deitz, Dell spokesperson and manager of IdeaStorm.

At the time of this writing, the Dell community had contributed 5,363 ideas, which were promoted 376,627 times. Beyond that, 23,235 comments were posted. Those numbers serve to illustrate the promise of Web 2.0: Your company and its products as an integral and personal part of your customer’s lives.

Related links:

• ABC: An Introduction to Web 2.0
• 5 tips for bringing Web 2.0 into the enterprise
• Stowe Boyd on Web 2.0 in the Enterprise
• Users Who Know Too Much and the CIOs Who Fear Them
• Web 2.0 for the Suits: One Visionary’s Take