Web 2.0 and The Network Based Organization
My previous blog on Customer Relationship (CRM) and Customer Data Integration (CDI) generated some interesting comments. While many industry insiders did agree on the importance of CDI and “putting the cart before the (CRM) horse”, there was healthy skepticism around the effort and investments involved in a potential CDI implementation – is it again one of those big, hairy, audacious monsters which puts organizations at risk during implementation?
Well, to answer that question simply, no, it is not. But let me not get into a spiel on CDI implementation; instead, let us take a detour and touch upon technological developments in the flattening world around us, which if leveraged in an organizational context, can significantly bring down the implementation efforts, costs and risks for complex technology programs.
My long time friend and colleague, Sandeep Dadlani wrote a blog recently, right on these pages, extolling the virtues of 'Linked In' and how it can jump start networking and collaboration even within a large and rapidly growing organization. Think about it, networking and collaboration tools on the Internet have figured out the art and science of connecting and integrating public data across a mass of individuals. These tools seamlessly and silently update, in real time, any changes in people's professional or personal lives, based on individual preferences. And here, we struggle to link silos of customer, employee or any other business critical information, when everything is right under our noses, within the firewalls of the organization!
Why is it that open source, easy-to-use, interaction-rich, "service oriented" technologies and collaboration tools like "wikis", which have collectively come to be known as Web 2.0, always make their debut on "non-business" or informal 'leisure time' applications? Is it because traditional organizations are too strait jacketed to encourage any creativity? Is the corporate world slower to adopt newer technologies?
Well the answer to all these questions lies in the simple fact that innovation on the Internet is driven by the collective wisdom of an army of volunteers, who are largely unlinked professionally or personally. They target, traditionally underserved segments – e.g., students for facebook, teens for myspace or casual knowledge seekers for wikipedia - to test out concepts. The power of the network exponentially improves the initial concept while steadily bringing down the risk of failure for progressive releases. Remember, much before the Internet evolved to what it is today, Linux was a 'geeky' volunteer pastime which snowballed into a formidable force in the programming world!
Another, admittedly controversial reason I can attribute to Web 2.0 explosion "outside the firewall" of traditional organizations: Internet driven innovations thrive in democratic fraternities (and sororities!) – Organizations (at least the for-profit, corporate bodies), by definition, cannot operate as democracies!
So coming back to my original point: How do Organizations leverage emerging technologies and embrace innovation to reduce complexities in deploying customer facing applications? One option - Organizations morph themselves into loosely networked band of volunteer-professionals, operating by democratic principles rather than "facilitated consensus" by leaders and managers! Well not entirely impossible – like e-Bay or craigslist.org today comprise a loosely aligned network of willing buyers and sellers, adhering to a set of ground rules and committed to making transactions work. But not all Organizations can emulate e-Bay or craigslist, as there is something specific to their business model (creating more liquidity in traditional illiquid products or commodities) that encourages network building and rapid innovation.
Option 2 is to abstract the core principles of network based innovation – Organizations provide a 'platform' for employees and customers to innovate. Such a platform is typically a combination of flexible, non proprietary technologies, rapidly configurable product offerings and open access to all, with appropriate built in security features of course! There are open forums to share product and service information, test newer concepts and receive instant feedback, convert such information into keener customer insight and ultimately impact the top and bottom line. Further, the platform needs to run frictionless on existing silos and extract legacy information seamlessly. I hear the term "Enterprise 2.0" a lot now-a-days, which is purveyed as the Organizational avatar of Web 2.0. I am not sure I understand that concept very well but hopefully it is something similar to what I have espoused above!
Such platforms can also be creatively configured to operate globally – Analytics out of India, Technology architecture and plumbing out of China and multiple language portal support out of Eastern Europe! Parts of the platform could even be outsourced in a managed services model, without necessarily outsourcing the distinct strategies built on top of the platform!
Maybe the day is not far when a Consumer Products Company or a Retail Bank equips all its customers with a Linked In genre of portal to constantly update as well as synchronize information back and forth!
Comments
Very interesting insights into an emerging business strategy. You are correct about the "wisdom of the crowds" reasoning for Web 2.0 innovations to come out of non-business models but it gives opportunity for companies to learn from such models and implement the one that will suit their needs.
Also, the companies these days have become so competitive that most don't have time to be creative and innovate. I think the innovation comes from sharing of ideas and it is very important for companies to provide a common platform where everyone can share ideas without the department walls that divide the information from flowing.
Posted by: Ricky | May 16, 2007 04:43 AM