For many people the positioning of Enterprise 2.0 as a cost reduction engine is not new. Complexity reduction, efficiency increases and fast response times have been the cornerstone of many Enterprise Social Software pitches in the last 5 years.
Enterprise software spending has recently crashed. Companies such as SAP, headquartered in Waldorf Germany, have recently issued earnings warnings, which illustrate how dramatically enterprise application spending has dipped in just a few weeks. These organizations can no doubt weather this storm, but with this shift, opportunity is found.
As traditional enterprise vendors suffer, a panacea for investors and customers is emerging with the nascent enterprise social software industry. Until now, Enterprise 2.0 has sat on the sidelines of the enterprise software industry, seen perhaps as less focused and more predisposed to conversation than action.
Enterprise 2.0 consultant and speaker Thomas Vander Wal may be a typical example of the ethos that has emerged from this industry within an industry. “My clients always see my value as providing strong benefit of getting the most value out of social tools,” of his work implementing and designing Enterprise 2.0 tools, “The interconnections and interactions between people spark great value, but the more costly traditional tools have missed out on this great reservoir of of value, but the newer lower cost solutions offer these gems up wonderfully with a little coaxing.”
The concept that more traditional enterprise applications miss out on these network effects, the value added by having many people using a single tool or platform, is not new. The emergence of Saas, software which is not installed on a computer but is instead delivered via the Internet, has recently generated more interest in leveraging these effects as an advantage to businesses.
“The promise of bringing social tools into organizations has never been about complicating worker productivity. It centers on allowing individuals to act more independently and to make smarter decisions more easily.” said Susan Scrupski, an ‘Enterprise 2.0 Evangelist’ with nGenera, an Austin-based Enterprise 2.0 developer and consulting company, “The end result really is in reducing the costs of creating and delivering products and services.”
Social Software is software which “allows users to interact and share data.” according to Wikipedia. These principals, applied to everything from mundane business processes to change management have been slowly making inroads in recent years.
In many cases, enthusiasm for this technology has outpaced reliable case studies and visible progress, but that progress has become more remarkable in 2008, with several large infusions of capital in to budding Enterprise 2.0 startups such as $15million that Sequoia Capital recently invested in Portland based Jive Software, and $20million from Intel Capital which was invested in Telligent, a Dallas, Texas, company.
So too have new stories emerged, like that of National Public Radio, a network of over 800 stations in the United States. “It’s no secret that employee anxiety within organizations will increase as markets fall, giving organizations embracing Enterprise 2.0 tools opportunities to build trust and transparency across all levels of a company.“, says Tim Eby, a board member of National Public Radio and the manager of NPR station WOSU in Columbus, Ohio. “The effective use of wikis, internal blogging that invite comments, Twitter, and social bookmarking tools like del.icio.us bring a flow of needed ideas and innovation at a time when all organizations are seeking to improve efficiencies, customer relations, and loyalty. There’s no better time than an economic downturn to consider embracing these tools within an organization.”
Enterprise 2.0 may not yet have fulfilled its biggest promise, the democratization of the enterprise, but as successes mount, those who may have ignored its rise will begin to take notice. In a time of uncertainty such as we have seen in the past several months, new and promising technologies may prove to be the safest harbour for those who must continue to deliver growth.
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