Infovark

Paul Graham from Y Combinator posts a list of ideas that his investment firm would like to fund, and Enterprise 2.0 makes the list at Number 5:

5. Enterprise software 2.0. Enterprise software companies sell bad software for huge amounts of money. They get away with it for a variety of reasons that link together to form a sort of protective wall. But the software world is changing. I suspect that if you study different parts of the enterprise software business (not just what the software does, but more importantly, how it’s sold) you’ll find parts that could be picked off by startups.

That last point — that it’s not as much about what the software does, but how it’s sold — was a huge motivator for us when we started Infovark. One of our most popular posts to date is Emergence in the Enterprise — a rant that was a direct result of me spending far too long as part of the Enterprise Software Sales Cycle.

Power and money are concentrated at the top of the org chart, so naturally vendors want to sell to senior management.  After all, from a cost-of-sales perspective, you make higher profits by making only one sale for 12 million dollars than you do making 24 sales for a half million each. That’s surely good for your business.

But the reality is that Enterprise 2.0 can’t deliver much value at the top of the org chart. It’s the process changes and cultural change that delivers value. Unless you can convince the C-Level guys to force everyone else to come along for the ride, the cultural change necessary won’t occur. And as Dean says, if top-down “thou shalt” approaches to change management worked, there wouldn’t be any need for Enterprise 2.0… Enterprise 1.0 would do the job.

That’s why we’re firmly focused at the bottom of the org chart.

(We finally managed to get our product page up — if you’d like to find our more about how Infovark is planning to help, you can check it out here. )

Gordon’s public confession last week stuck a chord with me.

I think the term “enterprise software” is being misused. Two very different kinds of software are being conflated.

The first kind of enterprise software is sold to an organization for the purpose of managing or maintaining the organization itself. This is your classic enterprise software: CRM, ERP, EDRM, ECM, etc. (The acronyms are a dead giveaway.) While this kind of software helps to power the enterprise, it’s not actually used by the whole organization. Instead, its users form the internal departments that keep the organization running, like accounting, finance, human resources, and operations. It’s part of corporate infrastructure.

The second kind of enterprise software is general business tools. I’d put spreadsheets, word processors, and presentation software in this category. These tools serve the needs of ordinary business users. They can be considered enterprise software only in the sense that everyone in an enterprise uses them.

All Giants Start Small

It’s a tribute to Microsoft that they so thoroughly dominate this second category with Microsoft Office that we’ve forgotten that these business applications were once sold directly to consumers as stand-alone products. It was only after Excel, PowerPoint, Access and others achieved near ubiquity that they were bundled together and sold to CIOs and IT departments under enterprise licenses.

Before the office suite existed, before employees began to assume that their employers would provide these common tools as a matter of course, Microsoft had to convince individual desk jockeys of the merits of each application. They had to drive adoption by delighting individual consumers. They had to win hearts and minds one business professional at a time.

Does that sound familiar? Enterprise 2.0 is about introducing a new set of general-purpose business applications to knowledge workers everywhere. To realize the benefits of these new collaborative tools, you have to get everyone — not just a few folks in internal departments — to use them. And that requires training and cultural change. It’s a big investment in something that’s not been proven yet.

Eggs in a Basket

Even if your organization is willing to try these new tools, which ones should it pick? There are a lot of vendors out there. The costs of choosing the wrong one are high: You have to implement another system, train everyone again, and still make that cultural adjustment. Only now your coworkers are justifiably cynical about the project. The toughest challenge is overcoming the last project’s failure.

Lowering the cost of failure is the best way to encourage innovation. Companies need a way to test new tools cheaply and easily.

Many of these E2.0 applications require a a fair bit of infrastructure, planning, and governance to operate. Some organizations will feel comfortable trying a hosted service, which lowers the costs associated with trying something new. Others may be concerned about letting their information go outside the firewall. And many hosted solutions don’t provide tools or services that would allow an organization to switch providers at will. So with either approach, lock-in can be a problem. Companies have gotten burned in the past.

All this means that knowledge workers that want E2.0 tools have to fight a series of internal battles over priorities, budget, and culture before they can begin experimenting. Or they have to find a way to work around the problem.

Let a Million Flowers Bloom

Right now, there are computers hidden under people’s desks in organizations all over the world running wikis, blogs, chat servers, and all sorts of interesting E2.0 applications. This is where the real experimentation will happen. There are risk-takers in even in the stodgiest organizations. These individuals are willing to try new things, as long as the personal investment isn’t too steep.

So to get E2.0 into the enterprise, you need applications that can be installed on any laptop or workstation. They can’t rely on a system administrator or an IT services group. They won’t run in a server room, isolated from competing applications. They have to give immediate benefits to the knowledge worker that’s taking the leap of faith. The application has to fall within an individual’s budget, both in terms of time and money. The application has to interoperate with the other tools used by business professionals. And it should be as easy to get the data out as to put the data in.

If it works for that one early adopter, the application will spread to others in the organization. It will compete with other solutions for time and attention, just like in the old days when there were dozens of different word processing solutions. Maybe one will eventually win out. Or maybe you’ll find a handful of competitors, each strong in its own way.

But we’re not there yet; we’re still in the experimenting phase. And when you’re experimenting, it’s best to start small: One computer, one user. Then a small team. Next a large team, then a department. That’s what we mean by emergence.

After a time, you’ll see those successful applications incorporated into office suites and absorbed into corporate culture. Corporate IT will buy enterprise licenses for them. People will begin taking them for granted. And then we’ll start talking about the next big thing.

I have a confession.

I am starting to really hate the word “enterprise”.

The problem with the term enterprise is that it is an abstraction. An enterprise isn’t something you can see, touch, or work with directly. The adjectives that get applied to the word are themselves disconnected abstractions: an effective enterprise, a dysfunctional enterprise, an innovative enterprise. What do these things really mean? Aren’t they just wishy-washy arm-wavy generalizations?

Enterprises are everywhere, and yet, they are nowhere. When you talk to your bank teller, you are “interfacing with an enterprise”. But really, you’re talking to a person. You can’t hold the person responsible for the entire enterprise. (This fact has been wonderfully exploited by bureaucracy for decades now.)

Web 2.0 brought the individual into the world of the Internet. This revolution — like most others – was about bringing power to the people. Users add value to the web. Every URL is a latent community. Wikipedia, YouTube, and Flickr bring us content that we made for ourselves. Self-organizing groups. The freedom to share and discuss and annotate. This democratization changed the way people used the Internet and changed the way they interacted with each other. (props to Clay Shirky)

If we want to change the way people work, we have to give up on this notion of “the enterprise” as the thing that needs to change. We have to stop focusing on abstractions like Enterprise Content Management and Business Intelligence. We can’t claim to bring more “Collaboration“, more “Innovation” or more “Social” into the enterprise. These things are intangible, hard to see, hard to measure, and largely irrelevant to the problems at hand.

Trying to bring about change at the abstract level is impossible. What ends up being sold is a utopian ideal. No wonder most of these projects fail — they’re designed entirely in fairyland.

What we need to do is get back to reality. Let’s tell the architecture astronauts to come home.

Enterprises are made of people.

We arrived here in Boston tired, and pretty scruffy looking after the red-eye train from DC. But, we made it!

We just missed an interesting sounding opening presentation from Rob Carter from FedEx - it looks like FedEx are making extensive use of the web, facebook and blogs and wikis both within and external to their organization.

Sean Dennehy and Don Burke then presented a great seession on their work at the Central Intelligence Agency. The CIA’s knowledge sharing ability has been greatly enhanced since they deployed their “intellipedia” - a mediawiki implementation that allows CIA staff to edit and share information freely, and without editorial regulation.

My favourite quote from Sean - “Wikis don’t work in theory - they only work in practice”

Other than removing the ability to make anonymous edits, not much was changed by the CIA when they launched intellipedia, last year.  They claim also to have a much higher contribution rate (Wikipedia has a markedly low percentage of users who actually edit it - often guessed at about 1-3%) - but they are still working with the early adopters - intellipedia hasn’t been wholly rolled out to the entire organization.

“A culture problem - not a technology problem”

Don mentioned that there was substantial resistance to their efforts to incorporate this crazy wiki thing into their business. Primary benefit comes from working at the broadest audience possible. The wiki approach also focuses more on topic than on organizational structure - it means that the point tends to be on content, rather than process. That’s a really good thing.

” But - I don’t have time to edit this intellipedia thing”

Don and Sean seem adamant that the best way to deal with this kind of response is for people to stop writing emails and documents, and start writing intellipedia articles instead. (I suspect that that’s going to be a friction point for them. People don’t like new ideas very much. )

All in all, this was a great session - intellipedia seems set to be a great success.