Enterprise 2.0: Ready for Prime Time, or Not Yet?
Why this new wave won't cross the chasm as soon as you may think.
By Philip Lay, TCG Advisors
Nov. 16, 2006
Echoing the phenomenon that is now commonly referred to as Web 2.0, "Enterprise 2.0" (E2.0) is a name that encapsulates long-held aspirational goals for business and government organizations that wish to become truly responsive to their customers and partners using the most leading-edge information technologies available today. Thus, concepts such as the "real-time" enterprise, as well as advanced "inter-enterprise collaboration", finally become more achievable, at least in theory. E2.0 is based on technologies such as open source software, utility computing (of which SaaS is perhaps the most concrete example today), and services oriented architecture (SOA), which in its earlier iteration in the late 90s was referred to as "web services". Furthermore, all three of these technologies are at different stages of evolution and market adoption.
Based on the above arguments, Enterprise 2.0 represents a wave composed of trends and technologies, rather than a single, purchasable technology or product category. Like all complex new waves -or "paradigms" - it's an odds-on certainty that Enterprise 2.0 will take at least another five to ten years to fully form. In all likelihood it will be adopted in parts by most customers, depending on the sequence in which individual components of this new class of offerings can form the basis of effective solutions to important business problems. My purpose here is to comment on the adoption dynamics impacting this phenomenon, since this is my special area of expertise.
In this article:
So, what seems to be going on in enterprise organizations?
Six years on, the harsh technology crisis of 2000 has culminated in what Accenture aptly characterized in its late 2005 report as 'enterprise software's "perfect storm" scenario'. As the authors put it, the perfect storm in question refers to the confluence of three separate but related crises: a) the "Good enough" crisis first described by Clay Christensen in his book "The Innovator's Dilemma", b) the "IT Does Not Matter" crisis first described by Nicholas Carr in his controversial May 2003 Harvard Business Review article, and c) the "Complexity" crisis, a term coined by IDC to characterize the rebellion of customers against overly complex enterprise software implementations - what I customarily refer to as the client/server "tax" on IT productivity.
After over a decade focused mainly on business process automation, IT is being tasked with a new job, i.e., to find ways to help their organizations to innovate in their business processes in order to differentiate themselves in their increasingly competitive global wars. Unfortunately, most corporate IT departments are not equipped with the resources or managerial skills to undertake this task effectively. For one, they are still heavily engaged in defensive maneuvers aimed at cost reduction in development, maintenance, and operations. While struggling to support their client/server and mainframe systems, CIOs and their staffs are hustling to keep pace with line-of-business demands for internet-based contact with their customers, partners, and suppliers. Hampered by the impending boomer retirement crisis in mainframe and other legacy systems, IT is wrapped in a crisis of its own to justify its bloated expenses and perceived lack of payback to the business.
In response, leading organizations are empowering their line-of-business (LOB) executives and even creating a new high-level innovation management role - that of Chief Process Innovation Officer (CPIO) - to drive innovative system investments to support redesigned business processes. The traditional CIO role is thus being split into two distinct responsibilities: (a) a business-savvy CPIO, and (b) the Chief Information Technology Officer (CITO), who is accountable for IT operations. In light of all the recent angst over the future value of IT to large organizations, it is important to recognize that customers continue to suffer from serious business problems that they need to address using a mix of process redesign and creative automation. The novelty in this is that much more attention is being paid now to (re)designing the right process before automating it.
Based on the above arguments, Enterprise 2.0 represents a wave composed of trends and technologies, rather than a single, purchasable technology or product category. Like all complex new waves -or "paradigms" - it's an odds-on certainty that Enterprise 2.0 will take at least another five to ten years to fully form. In all likelihood it will be adopted in parts by most customers, depending on the sequence in which individual components of this new class of offerings can form the basis of effective solutions to important business problems. My purpose here is to comment on the adoption dynamics impacting this phenomenon, since this is my special area of expertise.
In this article:
- So what is going on in enterprise organizations?
- The wave that is forming
- Why mainstream adoption will take a while
- What should customers do about Enterprise 2.0 today?
So, what seems to be going on in enterprise organizations?
Six years on, the harsh technology crisis of 2000 has culminated in what Accenture aptly characterized in its late 2005 report as 'enterprise software's "perfect storm" scenario'. As the authors put it, the perfect storm in question refers to the confluence of three separate but related crises: a) the "Good enough" crisis first described by Clay Christensen in his book "The Innovator's Dilemma", b) the "IT Does Not Matter" crisis first described by Nicholas Carr in his controversial May 2003 Harvard Business Review article, and c) the "Complexity" crisis, a term coined by IDC to characterize the rebellion of customers against overly complex enterprise software implementations - what I customarily refer to as the client/server "tax" on IT productivity.
After over a decade focused mainly on business process automation, IT is being tasked with a new job, i.e., to find ways to help their organizations to innovate in their business processes in order to differentiate themselves in their increasingly competitive global wars. Unfortunately, most corporate IT departments are not equipped with the resources or managerial skills to undertake this task effectively. For one, they are still heavily engaged in defensive maneuvers aimed at cost reduction in development, maintenance, and operations. While struggling to support their client/server and mainframe systems, CIOs and their staffs are hustling to keep pace with line-of-business demands for internet-based contact with their customers, partners, and suppliers. Hampered by the impending boomer retirement crisis in mainframe and other legacy systems, IT is wrapped in a crisis of its own to justify its bloated expenses and perceived lack of payback to the business.
In response, leading organizations are empowering their line-of-business (LOB) executives and even creating a new high-level innovation management role - that of Chief Process Innovation Officer (CPIO) - to drive innovative system investments to support redesigned business processes. The traditional CIO role is thus being split into two distinct responsibilities: (a) a business-savvy CPIO, and (b) the Chief Information Technology Officer (CITO), who is accountable for IT operations. In light of all the recent angst over the future value of IT to large organizations, it is important to recognize that customers continue to suffer from serious business problems that they need to address using a mix of process redesign and creative automation. The novelty in this is that much more attention is being paid now to (re)designing the right process before automating it.
