Srikant Sharma's Blog

Enterprise 2.0 = Profit x 2.0

February 5th, 2009

There is a lot of talk about Enterprise 2.0 – a term originally coined by Andrew McAfee in 2007 was then somewhat ahead of its time.  That time is now – and enterprises are rapidly embracing this paradigm.  The central idea behind Enterprise 2.0 was the adoption of the social web, and all its attendant capabilities based on the Web 2.0 revolution.

For one to truly understand and harness the potential of Enterprise 2.0, it is key to understand the underlying paradigm of Web 2.0.  Web 2.0 is simply the natural next step in the evolution of the web.  But I would like to think of this evolution as almost a big leap forward (almost a mutation!).  Whereas Web 1.0 was essentially a universally-accessible static-content publishing platform, and the next step forward (think of it as a Web 1.1 to 1.3) was adding core transactional capabilities (such as shopping carts, payments processing, etc., – primarily driven by the growth of e-commerce), Web 2.0 is a major leap forward.  Web 2.0 enables individuals to become contributors – thereby allowing for the web to tap into the expertise, knowledge, tastes, opinions, and talents of a large community – while preserving individual identity and role.  Web 2.0 is about enabling the “aggregate-individual”.

How does the Aggregate-Individual impact an enterprise?  Here is a very simple way to look at this – from a business enterprise’s standpoint, every customer, partner, analyst, executive and employee is an individual – and beyond their narrow interactions with that enterprise, they are interacting and contributing to the pool of knowledge (POK) on a continual basis.  This means that each individual that touches the enterprise in any capacity impacts the POK associated with that enterprise.  This is the social marketplace.

Above all else, this social marketplace has the greatest impact on one of the most critical assets of an enterprise – its brand.  For many, the concept of brand has a narrow definition – associated with the visual aspects of the company’s identity, and the message that the company is pushing out to the market.  In reality, your brand works exactly the opposite – the company’s brand is no more than what the world outside (the market, customers, employees, partners etc.) confers upon you (the enterprise).  It’s all about what others think of your company that forms your brand – regardless of what you’d like that perception to be.

The social marketplace and workplace impact the brand of an enterprise immensely.  Participating and controlling (to the extent possible) the dialog on the company’s brand is clearly critical.  Additionally, “listening” to the “chatter” on the company helps address widely-shared concerns and issues with the company’s products and services.  Such a listening campaign can also enable the enterprise strategyby finding areas of opportunity and unmet need.

Implementing effective social marketplace strategies offers many other areas of value.  These include enabling and educating the channel and partner ecosystem, reaching out to new and hard-to-target markets, and enabling the virtual enterprise – the ability of the enterprise to extend its reach and influence well beyond its areas of physical presence.

An equally important facet of the social web revolution is the potential for enterprise efficiencies facing inwards – focused on employees – and commonly referred to as the Social Workplace.  In this context, one of the most path-breaking and previously unrealized benefits of the social media paradigm relates to an harvesting of enterprise knowledge latent within the organization.  Employees have areas of expertise that is largely untapped – studies have determined that most businesses utilize no more than about 10% of the total knowledge available to them internally  – and the ability to tap into this well of internal knowledge, expertise and skills, uncorks a tremendous asset for the company.  Indeed, the sheer monetary value of this asset can alone be extraordinary.   Variations of this concept include areas such as Corporate memory, and internal brand development.

Finally, with the increased focus on corporate message, governance and transparencies, the Social Workplace enables more efficient compliance.  These compliance capabilities fall into two broad categories – “soft compliance” i.e., internal compliance to conform with corporate message, policies and guidelines, and “hard compliance” – compliance with regulatory rules and requirements.

Ultimately, the entire social web paradigm is all about tapping into the participation of the individual – and thereby enabling the aggregate message.  The ideas discussed above are where the most compelling values are being seen for the enterprise – clearly, as these competencies become more mainstream and widespread, we’ll find increased variations and adaptations to these concepts.

Entry Filed under: Connecting with the customer