Why Enterprise 2.0 Will Fail
Scott Gavin recently listed the Top 3 Business Benefits of Enterprise 2.0 inside the company firewall.
- Personal Information/Knowledge Management
- Expertise Identification
- Collective Intelligence
I was glad to see someone discuss the internal benefits, because the E2.0 conversation lately has focused on the external benefits — how E2.0 can help marketing and sales.
The case for organizations reaching out to their audiences via social media is easy to make. If you want to improve your outreach efforts, you either have to go where the people are or create an inviting place for people to gather.
The case for E2.0 inside the firewall is considerably more difficult. As Tom Davenport points out, is essentially the case for what used to be called Knowledge Management, or KM. The term KM fell out of favor with consultants and analysts because it didn’t deliver enough of these benefits. There are a lot of folks hoping that flexible, easy-to-use “2.0″ applications might succeed where centrally managed KM failed.
But it likely won’t, because most E2.0 vendors are doing it wrong.
If the #1 benefit is personal knowledge management, why are all the big players selling to the CEO, CIO, and IT departments? Where are the tools targeting individual knowledge workers?
Missing in action
I can think of two reasons why we haven’t seen a flowering of office productivity applications.
1. The Free Brigade — Companies don’t think they can make money from ordinary people anymore. Even if software companies came up with killer applications that helped people manage their daily tasks, email and files, they don’t think they would be able to get people to pay for it. Perhaps their software will get pirated. Maybe some college students will throw together a free and/or open source version that will destroy their market. Or — the most common reason I’ve heard — is simply that employees don’t expect to pay for software they use at work.
2. The Microsoft Effect — Microsoft owns the corporate desktop computing environment. Period. Software vendors fear to challenge the hegemony of the Office Suite, afraid that they will suffer the fate of Word Perfect or Netscape or any number of other products and vendors that have tried, and failed, to break Microsoft’s lock on desktop computing. Despite the fact that Microsoft Office applications have been around for more than 15 years (an eon in software industry) and despite the fact that they have known deficiencies for managing information that the Content Management and Knowledge Management industries have exploited for years, there has been little or no direct competition in this space.
The Enterprise 2.0 distortion field
These two factors cause all Enterprise 2.0 vendors to compromise in one of two ways.
- While promising personal benefits to knowledge workers, they actually take their marching orders from senior management, who purchase the software.
- While promising to help individuals with their daily flow of information, they live in fear of deploying software to workstations and laptops, where all information is received and all the work is actually performed.
This means that most Enterprise 2.0 Software vendors violate at least two of Andrew McAfee’s criteria for an Enterprise 2.0 tool: Freeform, frictionless, and emergent.
Because many of these tools have a management bias, and will subordinate individual initiative to central control, they sacrifice being freeform and emergent. Because many of these tools will be based in the cloud to avoid the tyranny of the Microsoft desktop and corporate IT, they sacrifice the frictionless flow of information inside the firewall.
Ironically, the companies that actually deliver best on the E2.0 promise are ones that would never consider themselves enterprise software.
Related Posts
- Two Kinds of Enterprise Software
- Two Strategic Visions for Enterprise 2.0
- The Slowest Way to Fail
- Enterprise 2.0: The Software Social
- The Second Biggest Mistake of Enterprise 2.0
Hi Dean. I’ve read this a few times, but not sure I’m getting your point? Why will e20 fail?
Hi Dean,
I have followed Andrew McAfee’s work closely and I read your blog with interest.
I disagree with your comments on two counts:
1) Although for E2.0 to succeed, grass route support is critical, the reality is that vendors need to sell at the higher end of organisations for two reasons: (i) that’s where the money is. (ii) That’s where the management sponsorship comes from.
2) Use of E2.0 has nothing to do with the desktop. If it had, cloud apps (word/excel) and email would never succeed.
Have a look at Saleforce.com’s Chatter solution. It is E2.0. It provides E2.0 (facebook like) interface for business processes (CRM, Support etc). It is used at grass route level. Management will have to pay for it, sponsor it and support the folks using it.
E2.0 will absolutely succeed (and has succeeded – Lockheed, US Defence Agencies, etc), but it needs to support the business processes. That is why the vendors sell the solution at the top.
Regards
Keyvan Shirnia
Director
Reed Bunting Consulting
Hey Susan,
I start to worry every time I see enterprise software sold as a personal productivity tool. The goals of a business and the objectives of an employee working within that business are not the same.
I think Knowledge Management largely failed because it was centrally managed. One of the key benefits of KM was supposed to be improved knowledge worker productivity. But KM was often delivered as back-office infrastructure, which led to all sorts of compromises that limited its effectiveness.
On the other hand, most early E2.0 efforts succeed because of their flexible, decentralized nature. Simply rolling out your enterprise vendor’s collaboration platform offering with a dash of “social” on top, or outsourcing your E2.0 initiative to a cloud provider, won’t do. Neither give knowledge workers the specific — often idiosyncratic — tools they need, nor the sense of personal ownership required to drive productivity gains.
Hi Keyvan,
I don’t think we disagree on your first point at all. Most software companies focus on the enterprise sale because senior management authorizes the project and signs the checks. What I was trying to point out was that this has consequences for the design of these tools because, unlike Web 2.0 applications, the customer is not the end user.
On your second point, I’d say that if a major goal of E2.0 is knowledge worker productivity, then tight integration with the desktop is a must. Many productivity and business tools are desktop based or have significant desktop clients.
[...] post about the impending failure of Enterprise 2.0 got me thinking a lot about the strange nature of selling enterprise software, and of selling [...]
I largely agree, but there is another reason why E2.0 is being brought in, which is many mid to larger firms moved to enterprise portals (enterprise CMS) to provide consistency, ease of management of information, and one stop interface to get to internal resources. The downside is so few people are trained well enough in these large systems very little information and resources make it into the services and tools. It has inhibited people from adding and modifying information as needed and there is no collective intelligence available.
There is a balance of personal employee value and system organization focus needed with these tools and services. Sadly, much of the selling of the product is to people who only see the systems organization benefits, without any grasp that the tools will have limited adoption, long term engagement by employees, and therefore limited value to the organization if the employee value focus is not perceived. The employee value is much harder and complicated to grasp and the tools have to do a much better job at embracing how humans are social (their needs, fears, concerns, and various understandings of these dynamics as 1-to-1 social, small group, large group, and whole organization social interaction needs from the perspective of the person sharing information).
I think the main problem with the case for “E2.0 inside the firewall” is the word “firewall”, which represents an outdated but still common attitude towards maintaining organizational boundaries. I wouldn’t be at all surprised if an organization that relies on firewalls struggles to get the benefits from open distributed business and technology, including Enterprise 2.0.
Hey Richard,
It’s true that many forward-thinking organizations are becoming more transparent, and the borders between them are becoming less distinct. Still, eliminating the firewall altogether would require a lot of infrastructure changes. For one thing, until IPv6 is implemented worldwide, there simply aren’t enough IP addresses for everyone. Network address translation (NAT) makes the computers inside the corporate network opaque to outsiders.
An even bigger challenge is the political one. Changing the Internet from a “network of networks” paradigm to a “unified network” approach would require far more coordination than most companies — and countries — would be willing to undertake.
But I agree that the presence of company firewalls in the first place is an unspoken assumption of mine. Maybe it should be item #3 in my Enterprise 2.0 distortion field?
I agree that shifting away from firewall-based security is a significant strategic move for an organization, not just infrastructure but also political. There are some political issues that would have to be tackled, if the organization is to achieve any potential benefits from Enterprise 2.0.
But the shift away from firewall (sometimes called Deperimeterization) doesn’t necessarily entail the second shift Dean mentions, from a ‘network of networks’ paradigm to a ‘unified network’ approach, and I am not advocating this. There will perhaps always be limits to interoperability, and there will always be some structure to the network of networks, but this structure will be more open and innovative, and not driven primarily by an obsolete security architecture.