The Trouble With Web 2.0

Written by: Alexander Wilms

Today, there is a lot of buzz around a number of topics labeled as "Web 2.0“. Consultants jump on the "Web 2.0" bandwagon and IT vendors desperately struggle to add “Web 2.0” features to their products. But the term is still unclear and nobody has a good definition of what “Web 2.0” is and what it is not. The term was originally coined by Tim O’Reilly in an article describing the changes in business processes and models that have been triggered by new and creative combinations of already existing technologies.

Other “social networking” services (like wikis and blogs) have been added to the Web 2.0 “genre”, generating a new end user experience on the Internet. Many large enterprises are now starting “Web 2.0” projects, their IT departments seemingly eager to show their technological abilities. The “new” is strangely attractive and everyone wants to be on board.

But what is the real core of this new phenomenon? According to the conclusions of Tim O’Reilly the core is not the technology (which has been there for some time) but the emergence of new “patterns” – new or changed business processes and a new concept of the user. These patterns have been put to good use in the World Wide Web. But can they be transferred to a corporate environment, at the enterprise level, as well? Let’s have a closer look on them.

  • the Web 2.0 platform breaks down borders between services
  • Web 2.0 utilizes the collective intelligence of its users
  • Web 2.0 cannot control the process of knowledge creation
  • Web 2.0 is constantly linking knowledge, thereby not protecting intellectual property

The web as platform.

Or the Web 2.0 platform breaks down borders between services

One pattern identified by Tim O’Reilly is a change in the business model of software suppliers. In “Web 1.0” times the web was used only as a transport medium, delivering predefined information (e.g. static HTML pages) to client based software products (e.g. the Netscape browser). In Web 2.0 companies use the web as a platform, using the enhanced technology offering to create web-based applications or services that do not require any installation on the user’s machine (e.g. the Google Search Engine). If the client does not install a program that allows tracking of usage then charging for usage become difficult.

Business models that rely on the sale of personalized or concurrent software licenses will not work anymore. The suppliers will be forced to find another way to charge for their services. To generate income they may use advertisements (like Google) or additional service or content offerings (like “land” purchases in Second Life). Internal IT departments however may have to rethink their funding models, especially if they are funded by various company departments for their services. They will not be able to allocate operating costs per license if they want to be Web 2.0 .

Let’s assume a departmentally funded IT department offers a blog or wiki as a new service. No client installation is necessary, but access can be restricted to the members of those departments who pay for the service. Restricted access, as we will see later, will affect the overall value of a collaboration service and yet is not a fair sharing model – it opens up all sorts of claims for charge reduction on the grounds that the other departments use the service more intensively or in a different manner. A per-capita cost allocation may be a solution, but then the departments might try to overextend service usage as they don’t pay extra for more intensive use. The means of measuring usage and paying for it will have to change in order for the IT department to get paid for its services.

But this new platform pattern implies more than just a change in software distribution mechanisms. Not being bound to a client means these new web services typically do not rely on a single source of data, like a classical application with its own database, but combine data from different sources, enabled by open source protocols and standards. The large number of mash-ups (data combined and displayed in a new and usually creative manner) that have emerged around the Google map function are a good example. With these new service offerings the core competency of the service provider shifts from software development to database management and the ability to combine data that is available on the Web to create meaningful information.

Many internal IT departments face a different situation where access to data and the means to combine them are restricted by departmental boundaries, technological incompatibilities or data security and protection rules. Person-related HR or sales data are among the most protected in a corporate environment, and their usage is highly restricted for good reason. Data security and protection rules will also be a showstopper for externally hosted services. According to Article 25 of the European Data Protection Guideline, issued by the European Commission, personal data may only be transferred to third countries (all non-EU countries) if the receiving country provides an adequate level of protection. US organizations have to qualify under the “safe harbor” program to be able to receive data from a European organization.

But even then the idea of having your company’s most valuable data in an externally hosted application (e.g. the Salesforce CRM), with data transfer over the Internet will be the ultimate nightmare of every company’s IT security officer. The required security prohibits the clever combination and reinterpretation of data that we see on Google maps or elsewhere.

Web 2.0 cannot control the process of knowledge creation.

Or utilizing and enabling collective intelligence

We have seen that the new Web 2.0 services are powered by the ability to combine data from different sources. But where does the data come from and who creates it? The Web 2.0 pattern of “collective intelligence” shifts the task of creating and maintaining data and content from centralized resources to a dispersed user community. The eBay selling platform would be useless without the activities of the millions of sellers and buyers, who are creating the content and a critical mass of offerings that attract other users into using the service. Wikipedia would be a completely empty shell without its users creating and maintaining the content. In his article Tim O’Reilly states that the value of the service is related to the scale and dynamism of the data it provides. The larger the number of articles in Wikipedia the more users will use it as reference, therefore the service gets better the more people use it and contribute to it. Tim O’Reilly calls this the “LOW” principle – “let other’s do the work”. This works perfectly in the Web with its huge user base (according to the statistics already more than one billion people) but will this pattern also work in a corporate environment?

The corporate user base, even in the largest enterprises, is smaller than the user base on the Web which limits the number of potential contributors. If the quality of the service depends on the number of users then companies have a disadvantage compared to the Web-based services. In many interviews end users said that they often prefer to research on the Web instead of using their corporate knowledge resources because they are confused by the complexity of internal search and because the information they can find on the web seems to be more recent. However the reliability of Web-based information that can be edited by everybody is in doubt when comes to hard legal or medical use. Would you be willing to bet your career on a Wikipedia article?

If the quality of the service is improved by the amount of user commitment it will only be successful if a critical mass of users can be attracted. While Web services like eBay, Wikipedia or Flickr have been soaring over the last years, driven by user commitment, corporate services often have a contribution pattern like this:


But what attracts users to donate their time and energy to contribute to Web services like Wikipedia or Flickr while not doing so to corporate services? Psychology and economics teach us that there is no such thing as altruism – whatever people do will create a personal return of value for them. This personal value is measured by individual criteria. Respect and prestige, personal reputation, political beliefs or desires, and of course monetary incentives influence the decision as to whether their contribution creates this value. People create an article in Wikipedia because they believe that the topic is interesting or important or because they want to see their name in print, and put pictures on Flickr because they want to share them with others, thereby influencing how they are perceived by others. The value of contributing must be higher than doing something else (e.g. watching a sports game on TV or adding to the corporate knowledge base).

In a corporate environment this might be different as a different set of values becomes dominant. Company vision, goals, or instructions will be added on top of the personal value criteria, together with given priorities changing the decision of what creates value. Of course one big driver for such decisions is the need for an employee to be externally “chargeable”, a typical situation in the consultancy business. If a consultant has to decide whether he spends his time generating direct revenue for the company (and therefore for himself) by working for a client; or having to explain to his supervisor why he choose to improve the internal knowledge base instead he or she will opt for the first alternative. As long as contribution is regarded as less important topic in the corporate hierarchy the priority of knowledge initiatives will go down over time simply because people start to value other things as more important.

So contribution is rational for people if there is a reward. But there is another rationale for people, especially in large organisations. Cooperation within the Web communities is mainly driven by non-monetary values as the contributors don’t receive any money for their input. These communities are networks of specialists who rely on each others knowledge. Investing time to create and contribute knowledge will pay off here because there is no direct competition and other people’s knowledge might help you tomorrow. Small consultant companies may be examples of those tight communities. If there is direct competition people normally tend to change their behaviour. They try to acquire and to protect their special knowledge. The German language even has a special term for this kind of behaviour: “Herrschaftswissen”, which means superiority through withheld or not communicated information or knowledge. Many corporations have answered these issues by centralizing knowledge management into special departments . But Web 2.0 requires involving the largest number of users possible and a centralized approach might not be the right answer anymore. Corporate projects that focus on providing Web 2.0 technologies alone will fail if the companies do not change their rewarding schemes and knowledge management processes. Such projects will need to rethink incentives for participators and to create the time slots necessary for people to contribute. If the corporation wants the genuine benefit from Web 2.0 then they must not underestimate the effort it takes to produce it. Finding a balance between corporate or proprietary knowledge and the free-for-all idea exchange of Web 2.0 services is critical if a corporate IT department wants be benefit from Web 2.0 style services.

Web 2.0 cannot control the process of knowledge creation.

Or the uncontrollable wisdom of the “blogosphere”

Judging by the hype they have created; wikis and web logs (blogs) seem to be an important part of the Web 2.0 patterns. As blogs have spread through the web like wildfire vendors of content management systems are struggling to add this functionality into their applications. Already the term “blogosphere” has emerged as a collective term encompassing all blogs and their interconnections. It is the perception that blogs exist together as an extended connected community or a complex social system. However it is common knowledge that a system composed from several component parts will act differently than its individual isolated components. An ant colony develops complex social behaviour and erects structures – a task a single ant could never perform. While a single nerve cell is only able to transfer electrical impulses the enormous network of synaptical references and trackbacks of the human forebrain enables conscious thought.

Tim O’Reilly states that the blogosphere creates a structure that resembles the human brain. Expressing an idea in a single blog might not change the world, but if this idea is picked up, discussed and commented in a large number of blogs it not only gets the attention of many people – it might get enhanced, developed, refined, challenged and eventually transformed evolutionary into something that might influence the way of the world. Like in the anthill or the human brain this process is not controlled by a single instance – it is driven by the participation and cooperation of many individuals with their individual motives. This absence of a controlling instance allows for creativity, progress of ideas and the expression of individual opinions. The old saying that the whole is more than the sum of the parts is true here. However it is a self-organized process that follows its own rules – forcing or securing this is not currently possible nor probably desirable.

The various discussions on the attempts of some nation states to restrict Internet access within their borders show that organizations that rely on its inhabitants to keep within the existing structures will only tolerate an “uncontrollable” environment up to a certain level and will try to erect restrictions if this environment starts to thread organizational foundations. Using the discussions within a blogosphere to enable the development of new consulting solutions might be welcome to a corporation while critical comments on the latest corporate policies and procedures might not. In some corporate areas where following predefined procedures and processes (e.g. accounting standards) is necessary or where secrets have to be protected an open exchange among employees might not be allowed at all to protect the company interests. And companies who start allowing employees to blog will experience that enforcing control on the blog or wiki contents will be detected and will create strong opposition. Companies have to be aware that open service offerings like blogs and wikis cannot be removed afterwards or restricted in scope without losing employee loyalty or making themselves look like fools in the process. And worse – as the Internet provides a means to get around those blockages that the enterprise might believe are comforting: people might take their internal discussions public.

One other aspect – the strength of a wiki is the presentation of content in a loosely structured, intuitive way, creating a hypertext structure resembling creative human thought processes. As there is no visible hierarchical structure in a wiki retrieving content mainly relies on search. That is why Wikipedia or Google show a large search field on their main pages. This unstructured organisation of content fails if the content itself is highly structured. A law commentary contains the text of the law structured by paragraphs, with some comments or additional materials for each paragraph, sometimes for each sentence. Having a search might help if materials related to a special topic are needed, but if an experienced lawyer needs the latest comment on a certain paragraph he needs a different navigation – he will prefer to select the paragraph directly from a list, browsing through the hierarchy of paragraphs and comments. So wikis are a great tool but not a cure-all.

The Web 2.0 is constantly linking knowledge, thereby not protecting intellectual property.

Or the perpetual beta, mash-ups and new intellectual property

Another pattern Tim O’Reilly points to – most of the emerging 2.0 services will (or should) forever wear a “beta” sticker on their homepages. As the role of the user moves from passive consumer to active participant; the quick and continuous implementation of user driven enhancements becomes a driver for the service provider, especially in a competitive market environment.

Release cycles tend to diminish as deployment does not count for Web based services – users will always get the latest version of the service when (re-)loading the site. While development cycles shrink to days or hours and pressure to continuously implement new features rises quality assurance procedures becomes less important – bug-fixes can be deployed instantly and as long as the users don’t pay for the service they will tolerate errors or will be willing to learn new features by themselves. In a corporate environment this might be different. Deployment delays do play a role, especially when permanent online access is not given or network traffic is limited. Quality of the service and at least a certain operational stability will be more important than speed of delivery, especially if software errors will cause financial damage or threaten the company in other ways. And as corporate applications tend to be more complex than Web services training efforts becomes an important part. So corporate applications cannot be developed and deployed using a “perpetual beta” mode.

One other thing is the focus – while most of the Web 2.0 companies focus on a single product or a small suite of similar services; an internal corporate IT service provider will have hundreds, sometimes thousands of services (and applications) to provide. Release management and portfolio management will be needed to ensure maximum value, which means that development resources might not be able to work on one service the whole time.

Another pattern that follows from this development mode is the emergence of so called mash-ups. As the rapid development relies on “lightweight programming models” (another pattern described by Tim O’Reilly), like scripting languages the security of the code is minimal, exposing the software to the users who are able to use or even “hijack” the existing interfaces to create their own solutions and mash-ups on the existing platforms, combining data from different sources to create new information and knowledge. In some cases (e.g. Google Maps) this is welcome to the service provider as it increases the spread of the service and the data quality it provides – all the users of Google Maps do provide Google with an enormous amount of location data, enabling Google to create the most detailed worldwide Yellow Pages ever seen. However if access to or re-use of the data should be limited (e.g. to paying customers) the Web 2.0 technology might not be safe enough. In business to business relations and also in a corporate environment data protection, security and the protection of intellectual property are issues of huge importance, so an open technology platform will be out of scope. On the other hand this limits companies in leveraging the know-how and creativity of its users. Even the internal use of existing Internet web-based services might cause issues as the company cannot control the service. What if the service provider decides to change, charge for or even discontinue an external service the company has come to rely on? Replacing the service will again create additional efforts to adapt the internal applications, which might outweigh the savings created by the free use of the service.

What now?

We have seen that there are differences between the Web and corporate environments. While the Web is a deregulated environment, with millions of users contributing and easy access to data, corporations have to restrict their users for many reasons, thereby limiting the potential of the Web 2.0 patterns. While Web 2.0 patterns work well in the Web there might be obstacles and issues when they are implemented in a corporate environment without adaptation. “Might” because every company is an individual organization and there are no easy, “one-size-fits-all” solution. On the other hand the Web 2.0 patterns have been proven to be too successful to be ignored.

There is no ready-made solution, only some good advice. The most important and most simple is that corporate behaviours and processes are not changed just by implementing a new IT service. Installing a blog in a formal and hierarchical corporate culture will not change the company in an open and informal community. Web 2.0 patterns will only work if the corporate and even national culture is already responsive to more collaboration and participation or if the implementation is accompanied by other measures to support cultural change. Creating and holding up motivation of users to contribute, seemingly no problem in the WWW with a billion users will be one of the success factors. So corporate Web 2.0 implementation projects have to broaden their scope, have to add structural and cultural change or process redesign to their charter. And those “soft” topics tend not to have easy solutions. So when your IT department or an external consultant excitedly tells you about how they are adding “Web 2.0” to the corporate computing environment: be prepared for a difficult birthing process and adjusting your expectations.

I would be happy to hear about your experiences.

Alexander Wilms

Alex works in the internal IT department of a large international financial services provider. He is coordinating the Central European Business Analysis Group, working on Requirements and Usability Engineering, System Analysis and Process Consulting. Alex has also been Project Manager on several Knowledge Management and Content Management projects.
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25 thoughts on “The Trouble With Web 2.0”

  1. Alexander,

    This is a great overview of “Web 2.0,” which I have found to be more about adjusting expectations than any specific technological shift or trend in web development. Just a quick thought:

    While the expectations are changing in response to new technical capabilities, I think there are a couple of factors that skew perception when it comes to establishing expectations for new projects. One significant factor is what I like to call the ‘Google curve,’ which is basically that users have great expectations for robust functionality at very little cost because Google has given us great tools (email, calendar, rss reader, blogging, etc.), not to mention industry standard search, at no immediately obvious cost. The trick is that we are now the worker bees filling the internet with ‘content’ for Google to index and serve ads on. When clients want similar functionality on their own websites, whether it is comprehensive and flexible search tools, blogs, etc., they are aghast when they realize that it will take time and money to build them.

    The second factor is directly related in that it is all about money. The big shift that is still in process is the monetization of advertising models within the news, entertainment, and search industries. Until a standard is reached for advertising online, I think we’re all going to have an interesting time of gaining our footing when it comes to advising our clients. No doubt we’ll need to quickly adapt to any of the likely changes in that industry to come.

    Semantic web, here we come!

  2. Alexander,

    thank you for the thoughtful story, it largely confirms many fears I had about the web 2.0 hype in the enterprise, but also gave me many insight into not-so-obvious details of the whole thing (like the IT department funding model that has to change).

    I have seen some of the things you mention happen, and I strongly agree that a different rewarding scheme must be put in place, in order for collaboration technologies, like wikis, to work in an enterprise. With no good rewarding scheme, web 2.0 efforts in an enterprise would rarely gain an effective user base, nor bring any innovation to it.

    You did a good job of making clear that patterns that made web 2.0 tools work quite well on the internet, are not guaranteed to work the same in the enterprise arena, since numbers and people dinamics are rather different.

  3. A really good article with a good number of insights. Thank you.

    It’s my opinion that we can’t be passive (an ironic accusation) when we take Web 2.0 into the more formalized culture of a corporation or business. Indeed we can never be sure how the situation will shake out when left to a respective population to involve itself. Just the opposite. We need to be quite active as this fresh paradigm matures. We can’t just push it out of the nest expecting it to fly. There need to be deliberate GUIDELINES for employees’ Web 2.0-natured use to make its implementation successful.

    I am thinking of guidelines created by leadership, IT folks, change management folks, and other strategists within a corporation—top to bottom. These are guidelines that establish boundaries AND educate AND resonate with a given corporate culture. The boundaries are rules and protocol designed to encourage productive participation and minimize risks—they set expectations; the education conveys to the employee the value of participation in the Web 2.0 environment(s) within the culture of that corporation or business. It’s more than just retooling the Pavlovian rewards for participation (failure “if the companies do not change their rewarding schemes and knowledge management processes.”). It’s creating the guidelines so that each employee understands the value of participation to his/her role and performance in the company.

    I think guidelines are instrumental in preventing the phenomenon that “contributions go down because people start to value other things as important.” (And hopefully the guidelines evolve as the use of Web 2.0 within the company evolves.)

    What’s it mean to an IA or UX person? It means a lot of work! Because passivity has turned to activity, design and development now encompass myriad more factors (and unknowns) than might have been required for acute projects or initiatives with tidy start/finish dates. But if guidelines like this are established, it at least gives us a common orientation to guide IA and design decisions that both sit well with the respective corporate culture as well as with us.

  4. First, I would like to say I enjoyed the article very much. It is a very good overview of Web 2.0 and the issues raised with rolling it to the enterprise.

    I administered a public sector ‘online community’ and faced the difficulties of getting members to participate by posting topics and responding to topics with their relative expertise. I tried altruism since they were an altruistic bunch being supported housing professionals in local councils around the country. But that didn’t work. I tried self-interest saying that active participation would enhance their standing in their local area and amongst their peers in the public sector as a whole.

    What seemed to work best was enlightened self-interest: telling members that by helping others in the online community they were encouraging others to come to their aid in their time of need. Back scratching works to a point. I had to work extra hard at finding the communicators and fostering them because there was little or no encouragement from their own council teams. Unless members are backed by their line management, only the most committed posters will stay the course.

    I have moved on to private sector corporates, and while there are the glimmerings of Web 2.0 struggling to make it in the enterprise, initiatives are being stymied by security and discipline concerns. The fear of losses in productivity are prevalent because of the ignorance of the added value improved employee communication gives to a firm. Too often good people move on and take their knowledge of the business with them. Companies pay thousands recruiting a replacement and then training them up to the approximate level of their predecessor (without their priceless empirical experiences).

    A knowledgebase of employee expertise survives when employees move on. The value of this is inestimable. Employees who are asked to share their knowledge feel more valued as well, usually resulting in longer job retention. Companies who can’t see the value in sharing knowledge in the enterprise will be too dumb to survive.

  5. I like the point raised by Michael- that the community aspect of ‘web 2.0’ is not that simple to foster, especially in the corporate environment. There are many sites that utilize community tools to share knowledge with a variety of methods and certainly varying success. For example, LinkedIn uses its ‘Ask a Question’/’Answer a Question’ format to allow users to share knowledge and build an online reputation through evaluating whether answers were helpful to them. Similarly, this site allows users to gain reputation points over time as they post comments, as well as vote on other users’ comments. It’s a subtle, but effective, way to enhance commenting functionality with a valuation system.

    I like these approaches over a more ‘popularity’ based system since it places the value in the information, rather than in the person, and see them as somewhat necessary in motivating users to participate despite not receiving payment for their time and effort.

  6. I’m on a contract right now with a very large bank and I administer an instant messaging system. This is my first experience with this kind of instant collaboration in an enterprise setting and I find it very effective for exchanging ideas in the workplace. You can join group channels or one-to-one with other users in the bank. Everything is logged (so people know to keep everything above board, with group channels backed up and searchable.

    Does IM fall into the remit for this discussion? It should because it enables knowledge sharing big time. Have any of you guys used IM in the enterprise?

  7. All,
    I’d like to thank you very much for your comments – seems that the idea of sharing knowledge does really work (but unfortunately we are not getting paid for it ;-))

    Chris – you are very right in pointing out that it is very easy to provide a platform (like Google) while providing the content is much more cumbersome. Very often clients believe that once they have a 2.0 tool like a wiki or blog the tool will do the magic and create and maintain the content. You are also right in pointing out that monetary incentives will enable the creation of platforms and content. But there is again the issue – while currently in the “outside world” advertising seems to be the engine, corporations will need to find other ways to drive innovation in platforms and content as ads will not work for them.

    Paolo – thanks for confirming that I am not alone 😉 Your contribution to this article leads me to the belief that the driving principles behind Web 2.0 do work. So once we are conscious of the processes and drivers behind them we can start to think about ways to support their evolution in a corporate environment.

    Michael – your comment gives us hints how cooperation can be archieved, thanks for adding this here. I totally agree that self-interest is the driver for contribution, people will act if they can see their own benefit. And you also pointed out that there is not the one driver that will motivate people – as people are driven by their individual motives you have to find the “right recipe” for each of them. Your point about the value of individual knowledge and the loss a cooperation will face by loosing is pointing in the direction of a business case for collaboration initiatives – following this line we might be able to justify an investment in collaboration incentives.

    Jamie – I am a bit hesitating about your idea of guidelines, but that is maybe due to the range of things covered by this term. I don’t think that there is a “guideline recipe” for success here – again we have to take the individual personal motivation and the different environments into account. What will work in a small consulting firm might not work in a large sales-driven organization (and vice versa). What will motivate a new-hire won’t probably motivate a senior consultant. Policy-like guidelines might not work either – you cannot “force” people to contribute. Best practice guidelines will definitely help to understand and to form the processes – I think that is what you meant? Having case-studies or scenarios describing what was done to promote cooperation in which environment and under which conditions, what worked and (maybe more important) what failed? Having a book full of best practices to start with would be a great help for anybody who needs to design a collaboration environment.

  8. Chris – reputation and popularity is a strong driver in “non-profit” communities. It definitely works for us, however we have earned our money during the day and do this as a leisure time activity. However if collaboration will compete against earning money this is a different picture. Reputation and popularity might still be valued, e.g. in a “community-like” corporate environment like a small consulting practice. In think that this will work as long as people will have a somehow personal relationship and are dependent on each others know-how. As Michael has pointed out – if you might need the help of others you will be willing to “donate” some of your time to help them. I think that the “tit for tat” strategy of game theory points in the same direction. This cooperation model however will cease to work when people can cheat successfully – the theory on this is known as the “tragedy of the commons” in economics. But you are right in pointing out that the source of motivation is an intrinsic one and we will need to stimulate this when we want to be successful.

    Terry – well, just now its budget season again and funding is definitely an issue, especially when company policies will not allow to use open-source systems or require certain security measures. Include implementation costs, all non-IT related costs such as monetary reward schemes or additional manpower to create and maintain content and it will become a huge bill. An offer for an enterprise content management system will easily have a six to seven digit figure at the bottom, and if you want to reallocate this among your departments there will be lively discussions on their size of the share.
    Thanks for your remark on sharing within the IT industry – that is a special industry that has it’s very own specific laws. Take the example of developers, who are actually artisans (in a positive way, with a strong emphasis on the syllable “art”) face value and senior craftsmanship still count a lot – so sharing is one way of promoting their skills. But what about an investment banker who just created a new investment scheme that will create him a lot of new contracts – would he share it just to be recognized as financial genius or rather prefer to generate as much revenue as possible before the copyists appear on the scene? As Chris pointed out – its all about money.

  9. Michael – instant messaging is a great communication tool, as is e-mail. Compared to e-mail IM is stronger as it supports discussion-like conversations, which are a classic way of sparking creativity. However I see some lacks in IM as a knowledge-sharing tool. It prevents people from talking directly to each other (sometimes I catch myself chatting to the person in the office next door instead of making the few steps over) which de-personalizes communication. Often it de-synchronizes discussion as the communication flow is disrupted – the more people in, the worse it gets. The greatest challenge I would see is the organization and presentation of the content – you wrote that all communication is archived and searchable. I just try to imagine myself searching for a very specific item and having to browse through a lot of “logfiles” of past conversations. Search is a very powerful method of retrieval, but it gets cumbersome if your goal is well defined – if you are looking for “deduction alternatives for assets in Germany” you will be happy to get a broad search result and many “hits”, however if you are searching for the “depreciation tables §255 HGB” you don’t want to browse conversations like “who took the comment book from the library”… So your IM archives may be a gold mine containing valuable grains of knowledge – question is how to unearth them.

  10. Alexander, while I am a big supporter of IM in the enterprise for its ability to contribute to knowledge sharing, I can concur with your point about the de-personalizing effects. I do sometimes find myself chatting to people I sit next to instead of making eye contact and vocalizing what I want to say. A handy feature of this particular chat client is the file and image attachments which can be appended to text to enhance what I wish to express – swings and roundabouts – does this translate across the Atlantic?; aka “six to one and half dozen to another”. For busy environments where moneymaking is the chief driver, this unfortunately becomes the norm. As with all new technologies there are positives and negatives to them.

    Without giving away too much sensitive business information, the search capabilities of certain IM systems allow for very detailed searches indeed. The business advantages of knowledge mining chat is one of the features which has encouraged Microsoft to add a powerful group chat system into its upcoming Microsoft® Office Communications Server and Microsoft Office Communicator, Microsoft’s server and client software for presence, instant messaging, conferencing and VoIP.

    As you can imagine, once the wide user base of enterprise MS Office customers buys into group chat, the acceptance of this form of collaboration in a wide range of industry sectors will spread fast, probably seeding other forms of collaboration such as wikis and blogs. Web 2.0 in the enterprise? It’s still early days, but we’re approaching lift off.
    PS – I hope the above link works; I haven’t used Public Square before so I’m not sure it takes standard HTML.

  11. Alex,

    You’re completely right that taking the knowledge-sharing and reputation-building models to a next step of monetization will probably not happen, at least not directly. However, I know that in the case of our company (Newfangled), building a strong reputation based upon expertise in areas beyond our bottom-line deliverables is critical. When we partner with an agency, one of the driving factors of that partnership is that they are trusting us to educate them and anticipate what technology adoptions and adjustments will be appropriate to their web strategy both now and in the future. While our knowledge of various technologies may or may not be germane to an individual agency’s needs, the breadth of it helps an agency to be confident that we are a solid partner to adopt. So, while there is no specific knowledge-sharing-to-revenue metric, we know anecdotally and intuitively that there is a correlation. This is why we encourage all of our clients to adopt strategies that utilize blogs and newsletters (inherently information-sharing tools) as a means of connecting with existing clients and “clients-to-be” in a clear, honest and flexible way. Financially, it may never be as measurable as ad systems or SEM, but it will definitely build solid business over time.

    Thanks, also, for taking the time to thoughtfully respond to each comment! True, we’re not being paid, but we are being enriched.

  12. Great article! It’s nice to read something about Web 2.0 that isn’t passionately layered over with hype.

    Chris’ point about cultural change is the thing I see as the most material factor in how successful Web 2.0 initiatives will be in the context of larger firms.

    There are other considerations that come with the fact that a firm might be publicly traded or owned by an equity firm or some other body whose interest in a company is directly tied to profitability that can be forecast. Web 2.0 business plans often require the kind of “faith” that is difficult to get from an executive level that answers to a board of directors so the stakeholders begin to try and shore up the initiative in several ways.

    Because of this context, the built-in tendency of companies to jump on a new idea but apply old thinking to its execution retards the outcome. It seems as though the best 2.0 applications out there have been able stay pretty targeted in their goals. Focus on core-competencies has always been a factor in business success. However, when a larger firm says “Hey kids, let’s build a Web 2.0 product”, they initially think through all the great participation they’ll invoke, the freedom of expression that will characterize it, the bazillions of dollars that will come with an integrated media model and the great extension of their brand that will occur as a result of this new Web property.

    Then they get to thinking…

    Participation, hmmm…we’ll need to develop a multi-channel marketing plan to create buzz and incent people to use our site.

    Free expression, hmmm…can we expose ourselves and our brand to unsolicited editorial content? We’ll have to go over the fine points with Legal.

    New media model hmmm…this can be done effectively but if we want to get lucrative contracts from our ad buyers, what concessions will we have to make to the look and or function of the site?

    There’s also the layering-on that occurs when multiple organizations within the firm want a piece of the pie which results in cramming additional functionality or elements into the product. These stakeholder-needs start to move away from that core focus of the application.

    It would be too sweeping to say that big company’s DNA creates a prohibitive environment for the development and perpetuation of a successful Web 2.0 app but I think there needs to be a degree of isolation and protection around those efforts to get them off the ground effectively.

  13. adam’s comments on the second thoughts and second guessing that accompany corporate explorations of web 2.0 tools are exactly right on

    when corporate speech is controlled by a few annointed speakers — hr, pr, etc — the guidelines are internalized and self enforcing

    when new tools make corporate speech a megaphone that can be held by more people, well, it all gets a lot more uncertain whether speakers will abide by “professional” guidelines or not



  14. Chris, am I right in guessing that your company works as an advisor to agencies who in turn serve other clients? So for you building up and sharing know-how will, as you state, pay off in the end – it is an investment in building up relationships that hopefully will result in a contract. So it is rational for you to make this initial invest to harvest in later.
    My scenario was based on a different situation – I am looking on this problem within one big company where IT is an internal service provider for “the business people” who use the knowledge-sharing systems, and from the perspective of IT who will be asked to implement those kind of Web 2.0 systems internally. My idea is that as the motivation factors that drive people to collaborate in the “external world” (like generating new business) are different inside the company the traditional approaches and reward models need an overhaul to be successful inside the company. Or did I misunderstood you?

  15. Alex,
    I definitely agree with the distinction you draw. Our case is unique (and somewhat oblique in reference to the business-related points of your article), so in regard to info-sharing and reputation, you’re right that our model will not necessarily suit a company which needs to sync internal divisions on it’s Web 2.0 strategy. The agencies that we advise will likely ‘stumble upon’ these issues as they advise their clients on how to approach web strategy in a way that is best suited to their industries and/or business models (something we advise our clients on how to prepare for). I think Adam points out some of those other factors that might make adopting a new web strategy (in general) much easier said than done (multi-channel marketing plan implementation, legal ramifications of unsolicited editorial content, and the design impact of ad contracts, etc.) within that context.

  16. Just to point you in the direction of someone who think Web 2.0 in the enterprise may work, but the job is an hard one, I would like to share with you this link:

    I had the precious opportunity to meet Mr. Reiser in person during a presentation he gave to a selected audience at our company site and the insights we obtained were really useful.

    Mr Reiser really do know how to make Web 2.0 work for an enterprise: follow his blog!

  17. Paolo,
    thanks for pointing out this link to the community. The line of argumentation sounds feasible, having technology first, then use it to create communities, and finally (hopefully) create value for the company. While the technology is available, the tricky part is to spark the community collaboration. Unfortunately Mr. Reiser does not give much advice how to do this – I think providing new “2.0” systems like mashups will spark interest and an initial hype, but keeping the interest up requires constant work and dedication – how do we motivate people to stay tuned and to use the systems? In his posting from March 19 he suggests that people are motivated by exploring and having fun with the “2.0” systems – which is a valid motive for a certain group of technically interested, young and highly educated people searching fun and personal self-expression, but in an enterprise we also have other people who might lack technical expertise or who might be afraid of “all the modern stuff”. So how do we motivate them?

  18. Some time ago Michael made a remark on the use of chat systems for collaboration. As they support discussion-like interaction they are well suited to support creative processes. An intelligent search technology could “mine” the bits of valuable knowledge out of the masses of daily chatter? A very interesting idea. Why not “mine” E-mail accounts too? I think there is some serious, even legal drawback to this – if I knew that somebody is “mining” my E-mail account I might get concerned about data privacy. Some of my stored E-mails might not be suitable to be mined or searched. That might be even worse with instant messaging content. Personally I use it very intensively, and many times to discuss things very informally with remote colleagues. If I knew that this content might be searched or mined I will stop to use IM for a lot of things.

  19. As an aside, I found this comment very interesting:
    “If there is direct competition people normally tend to change their behaviour. They try to acquire and to protect their special knowledge. The German language even has a special term for this kind of behaviour: “Herrschaftswissen”, which means superiority through withheld or not communicated information or knowledge.”
    I’ve witnessed this type of behavior in a different environment: a work place where team members compete against each other for annual review scores. Doesn’t really make for good team work the rest of the year!

    Great article!

  20. Margaret,
    true enough – thats corporate culture. Internal competition can be a strong driver for a company and I have heard that this is good practice in many organizations. They even give the same task to several teams and let them compete. But the downfall is that this does not form a strong team spirit and zero collaboration. This kind of organization will be like a market – highly effective in yield, but always changing in structure. This kind of organization might work to deliver quick solutions, but no long term initiatives. The philosopher and sociologist Michel Focault has written a very interesting story on ITT under it’s CEO Harold Geneen – this must have been such an organization. It performed well in a stable environment, but was not able to develop long term strategies in a changing environment.
    I think that such an organization will not be able to develop a strong team spirit – that might be the answer to your last sentence 🙂

  21. In the Web 2.0 world the only way to control content is to deliver it and then get in front of as many people as possible. Web 2.0 technology is an issue of both risk and reward. Risk management is about balancing the risks with the business benefits.

    IT is slowing the adoption of Web 2.0 because they are only familiar with the risk side of the equation. Isolated from the profit centers, enterprise IT only thinks about how things could go wrong, and then comes up with the logical answer of NO.

  22. In the Web 2.0 world the only way to control content is to deliver it and then get in front of as many people as possible. Web 2.0 technology is an issue of both risk and reward. Risk management is about balancing the risks with the business benefits.

    IT is slowing the adoption of Web 2.0 because they are only familiar with the risk side of the equation. Isolated from the profit centers, enterprise IT only thinks about how things could go wrong, and then comes up with the logical answer of NO.

  23. Ramnika,
    I see your point, and there is no general answer to this. You are right, Web 2.0 has risks and benefits, and any implementation decision has to evaluate risks against benefits. And there are many flavours of IT departments too, some more conservative, others more progressive, some sitting in an “ivory tower” and some very close connected to the business, e.g. using an active Service Portfolio Management. From my experience the task of IT is always to keep the IT environment up and running in a safe and stable way, as most of todays corporations depend heavily on it. So from their perspective it is rational to adopt a conservative way, especially as many of the 2.0 technology (as I pointed out) is vulnerable (e.g. scripting languages) or relies on external services.
    I don’t really understand your remark that control of content requires to get it in front of as many people as possible. Do you refer to the “social control”, that inappropriate content will be commented and critized? This might not work or might not be desirable in a corporate environment – just ask yourself if you would dare to object if your boss publishes such content? Social control might fail if the participants are not acting anonymous.

  24. The Web has an amazing ability to question our assumptions. I’m working on a post about Enterprise Client Applications and their inherent problems.

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