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Reducing information asymmetry with Enterprise 2.0

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Enterprise 2.0 enables organizations to become more social and collaborative.... Deploying the right tools is the small step - creating a culture of openess is the real challenge

Enterprise 2.0 enables organizations to become more social and collaborative.... Deploying the right tools is the small step - creating a culture of openess is the real challenge

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  • 1. Balanced Score Card and Strategy Map for Enterprise 2.0 Reducing information asymmetry in 21st century organizations “Ever y knowle dge worker in a mode r n o rganization is an exe cutive if, by vir tu e o f his position or knowle dge , he is responsib le fo r a contribution that ma teria lly af fects the capacity of the o rganization to pe r for m and to o btain re sul ts.” Pe ter D r ucke r, The e f fective e xe cutive, 1966 Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 1
  • 2. I. Abstract In the new market reality of rapid change, increased globalization and virtualization of the enterprise, companies are looking for new ways to improve corporate performance. In the aftermath of the recession and the economic meltdown, companies are not only struggling to launch and sell new products and services, they are also faced with a knowledge drain as a result of an aging workforce, redundancy waves and dysfunctional knowledge ecosystems. With the advent of Web 2.0 and social media, we have witnessed the rise of global communities connecting millions of uses around the globe. The term "Web 2.0" 1 is a cover term for web applications which facilitate interactive information sharing, interoperability, user-centered design and collaboration on the World Wide Web. Examples of Web 2.0 include web-based communities, hosted services, web applications, social-networking sites, video- sharing sites, wikis, blogs, mashups and folksonomies. A characteristic of Web 2.0 applications is that it allows users to interact with other users or to change, amend or update content (User Generated Content) in contrast to non-interactive platforms where users are limited to the passive viewing of information. Leading social software platforms such as Facebook, Digg, Blogspot, Amazon, Wikipedia, Linkedin, Youtube, Flickr or Slideshare, enable consumers to join a global conversation and share thoughts, ideas, comments, videos, photos and bookmarks with each other. This is the age of mass collaboration and Wikinomics: A powerful global conversation has where consumers, employees, suppliers, partners and begun. Through the Internet, people competitors are encouraged to share information and ideas. are discovering and inventing new ways to share relevant knowledge with In this paper, we will examine how Web 2.0 in the Enterprise blinding speed. As a direct result, (commonly referred to as Enterprise 2.0) can positively impact markets are getting smarter—and corporate performance by means of social software getting smarter faster than most technologies that companies. • Reduce cost of email traffic & data redundancy The Cluetrain Manifesto - 1999 • Provide alternatives for on-site meetings The end of business as usual • Decrease training & internal recruitment costs www.cluetrain.com • Improve communication and collaboration • Enable the virtual enterprise & distributed teams • Increase speed of information • Reduce time searching for information • Enable to quickly locate expert knowledge • allow to Integrate partner/supplier networks • Manage knowledge drain • Improve quality of information • Prepare for the changing demographics in the organization 1 first used at the O'Reilly Media Web 2.0 conference in 2004 - www.wikipedia.com Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 2
  • 3. Corporate Culture 2.0 drives Enterprise 2.0 However, to realize the full potential of enterprise 2.0, organizations will have to transform the way they are working today and grow towards a culture of openness. Enterprise 20 can be the catalyst but In order to achieve sustainable value creation, organizations have prepares themselves for a radical change in corporate architecture, strategy, behavior and management. These will be the revenue generators in the long term. The Bottom line of this paper is that Enterprise 2.0 - thanks to its nature and people- centric approach - will positively impact the intrinsic motivation of the employee workforce thus driving corporate performance. Enterprise 2.0 works on the (soft) dimensions of recognition, autonomy and relatedness and has a direct link with individual and corporate performance. In order to accompany this transformation, it is recommended to envision the use of a Strategy Map and Balanced Score Card to align people, processes and technology with this new collaboration-driven strategy. In this paper, we refer to collaboration2 as value-adding interactions that enable employees, consultants, customers, suppliers, subcontractors and partners to achieve business objectives, resolve issues and share knowledge effectively and efficiently. Information Asymmetry In economics and contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry. Enterprise 2.0 outlook In 2006 HBS professor Andrew McAfee was the first to coin the term Enterprise 2.0 in an MIT Sloan Management Review article entitled “Enterprise 2.0: The Dawn of Emergent Collaboration”. An early definition of E2.0 was: “the use of emergent social software platforms within companies, or between companies and their partners or customers”. In this article, McAfee also introduced the acronym SLATES to describe a usage framework for web 2.0 in the enterprise. SLATES stands for Searching, Linking, Authoring, Tagging, Extensions and Signals. With this acronym, the author wanted to describe how Web 2.0 technologies could be used in a business context. Since then, the market of Enterprise Social software has been increasingly growing and US researcher Gartner expects this market to grow to $ 4,646 million by 2012. Companies - mostly globals and multi-nationals - have been implementing Enterprise Social Software Platforms (ESSP) with growing success. Helped by the secularization of IT, the growing maturity of the web as platform and increase in broadband and mobile infrastructure and a technology-savvy workforce - these companies have seen performance improvements. IBM was able to save $ 4,6 million on a recurring basis as a result of introducing an Enterprise Tagging System on the Intranet. Tag-based searching reduces personal search time and discovery time and will generate serious productivity gains for the user. With the launch of their wiki software, Dell managed to save $ 4 million annually in its call center - and reduced call handling time with 2 to 3 minutes as a result of fewer-clicks-to-solution. I believe that E2.0 stands for sustainable 2 Productivity in Collaboration-intensive Knowledge Work: The Collaboration Management Imperative (Kjetil Kristensen, Björn Kijl) Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 3
  • 4. innovation and that the new generation of tomorrow’s workers - Generation Y - will join me in this thinking. So let’s see how we can take the jump to the next curve. Welcome to the age of Wikinomics Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 4
  • 5. II. The collaboration imperative in the information age In the 1960s we saw the transition from a post-war industrial society to an office-based society. This era marked the emergence of the information society where people increasingly depended on information, knowledge and technology. The information society also gave rise to a new generation of workers: the knowledge worker. In 1959 Peter Drucker first coined the term “knowledge worker” to describe “someone who adds value in the workplace by processing existing information to create new information which can be used to define and solve problems”. The knowledge (or information) worker deals with information work: this is the act of creating, using, interpreting or sharing information as part of a business process. In his daily activities, the typical information worker relies on the ability to work collaboratively, leverage relationship capital, discover tacit knowledge and deliver new solutions. With the increasing specialization of work and complexity of products and services, the need for intensive coordination and importance of interaction also grows. Our globalized and virtualized work environment has lead to an interaction & collaboration overhead that becomes substantial, and effectively managing this overhead becomes critically important. Collaborative activities typically consume 3 70-80% of an information worker’s time, the relative gain of improving the performance of those activities is significantly higher than improving the performance of individual activities. Understanding how Information workers perform their jobs and what their needs are is a critical step toward creating tools and strategies that enable them to perform more efficiently. But tools are only one part of the equation - in this case Information Technology enables to leverage the information capital and serves as lever for connecting Human and Organization capital. Enterprise 2.0 also requires a new mindset (behavior), corporate culture, decentralized structure, leadership style and as such centers on what Norton and Kaplan define as the intangible assets of the organization. • Human capital (employee skill and knowledge) • Information capital (databases, information systems, networks and technology infrastructure) • Organizational capital (culture, leadership, employee alignment, teamwork & knowledge management) Norton & Kaplan state that none of these intangible assets has value that can be measured separately or independently and that the value of these intangible assets derives from their ability to help the organization implement its strategy. We will refer to studies that show a strong correlation between a collaborative culture and corporate performance: collaboration, knowledge and interaction (i.e. intangible assets) can create value for the organization and impact overall corporate performance in the long run - if these dynamics are well understood and managed. The typical knowledge worker spends the majority of his time on collaborative activities such as meetings, communication, brainstorms, knowledge sharing or information distribution. In this 3 Meetings around the world: the impact of collaboration on Business Performance - Frost & Sullivan white-paper Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 5
  • 6. perspective, overall (corporate) performance can be improved by addressing collaboration and interpersonal productivity rather than improving individual work performance. The Connected and Collaborative Enterprise Despite the problems with evaluating and measuring collaboration, recent studies emphasize the importance of collaboration as a key driver of business performance. The study What's driving the new economy? The benefits of workplace innovation shows that workplace innovations account for 89% of multi-factor productivity gains (Black and Lynch, 2001). The research paper Meetings around the world: the impact of collaboration on Business Performance (Gofus et. al., 2006) concludes that collaboration positively impacts an organization’s business performance, as collaboration constitutes twice the impact of a company’s strategic orientation and more than five times the impact of market and technological turbulence influences. The data collected in the study indicates that collaboration counts for 36% of overall business performance and confirms that collaboration is a business area to be monitored, facilitated and managed. This links closely with Kaplan and Norton’s vision and definition4 of the so-called intangible assets: “knowledge that exists in organization to create differential advantage” or “the capabilities of the company’s employees to satisfy customer needs”. I agree with the authors when they state that human, information and organizational capital are “the ultimate source of sustainable value creation”. Enterprise 2.0 will help organizations to deal with the new collaboration paradigm as it provides an ecosystem of web-based technologies (tools) that provide rapid and agile collaboration, information sharing, emergence and integration capabilities in the extended enterprise. With proper change management initiatives, this can result in a productivity increase for the knowledge worker which - in turn - has a substantial impact on business performance. III. Darwinian IT systems Knowledge-driven industries are characterized by the fact that they generate revenue from the output of their employees’ information work. Over the past decades, the ratio of knowledge workers has substantially increased and now constitutes almost 75 percent of the workforce in industrialized countries. Closely intertwined with the rise of the information age was the birth of a totally new industry: Information Technology. Thanks to the first Electronic Data Processing (EDP) systems that entered the market in the Sixties, knowledge-driven industries could now start to automate many of the typical information tasks. Since then, we have seen the rise of new technologies such as SCM, CRM, ECM or payroll systems that aim to capture the information flows in specific domains such as manufacturing, customer relationships, content management and Human Resources. The 1980s witnessed the emergence of Enterprise Document Management and Enterprise Content Management systems aimed at capturing explicit knowledge in a structured and consistent way. But where most of these (Darwinian) systems are transaction-oriented and center on capturing the explicit knowledge in an organization, the real value of information is to be found in the tacit knowledge of the organization. Unfortunately, this tacit knowledge mostly resides in the heads of the information workers 4 Strategy Maps: Converting Intangible Assets into Tangible Outcomes (2003 Harvard Business Publishing) Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 6
  • 7. or is scattered amongst multiple systems and enterprise repositories. The typical nature of the information work is that there is no upfront “So the flow of information is workflow or as George Macgregor5 puts it: “Ultimately information changing us at a far deeper behaves in a unique manner when compared to other resources level than we realize. because it essentially represents the genesis of human thought, Knowledge was once power. and is heterogeneous and intrinsically intangible. The laws of Now it’s becoming freedom. If thermodynamics are of little consequence to the existence of knowledge were power we’d information. (…) Therefore, unlike traditional resources of land, labour have good cause to be and capital, information rarely yields any physical output. Perhaps more secretive. But secrecy isn’t importantly, and as Cleveland 6 noted in his 1982 article for the only becoming impossible. It’s ‘Futurist’, information also differs from traditional resources in that it is proving dysfunctional as well. expandable, compressible, substitutable, transportable, diffusive and We begin to see how much sharable. To handle knowledge and intelligence in an effective way, better our decisions are when organizations need a new generation of enterprise systems that are we work together, openly” user-centric - not transaction-oriented. These platforms have to be (Lienhard, 1997). easily scalable, widely accessible and - in alignment with the very nature of information work - expandable, compressible, substitutable, transportable, diffusive and sharable. IV. Knowledge: the ultimate source of sustainable value creation Knowledge is the lifeblood of many organizations but most fail to see it as an asset or a true resource. Information as a (corporate) resource has been a topic of discussion of academics and practitioners in various subject fields. Economists such as Machlup, Porat and Bell pioneered the ideas of information economy with information as the transforming resource for postindustrial society. Authors such as Horton (Marchand & Horton 1986) pioneered the view of information as a corporate resource, which like other resources such as people, money, raw materials, equipment and energy, should be managed to give a competitive edge. These thinkers helped develop both the idea of information as a resource and the idea of information-resources management (Badendoch et al. 1994: 26). In this context - there is clear parallel with Robert S. Kaplan & David P. Norton’s view on knowledge. In the book Strategy Maps, the authors first describe7 intangible assets as “knowledge that exists in organization to create differential advantage” or “the capabilities of the company’s employees to satisfy customer needs”. Intangible assets encompass such diverse items as patents, copyrights, workforce knowledge, leadership, information systems and work processes. They conclude with (...) these (intangible) assets (read knowledge) are “the ultimate source of sustainable value creation”. 5 The Nature of Information in the 21st Century: Conundrums for the Informatics Community? George Macgregor 6 Harland Cleveland, "Information as Resource," The Futurist, December 1982, 34-39 7 Strategy Maps: Converting Intangible Assets into Tangible Outcomes (2003 Harvard Business Publishing) Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 7
  • 8. V. Information bottlenecks lead to reduced throughput With the rise of the information age, companies have also been faced with a growing information overload. Especially widespread communication mechanisms like email have created an uninterrupted flow of information for the knowledge worker. This has an adverse impact on the productivity. In addition, the proliferation of enterprise IT systems, file servers and user-created applications across the organization resulted in a fragmentation of information and knowledge. This proliferation of systems in combination with the time-consuming email makes it increasingly complex to search, capture and publish relevant content and knowledge. Research by IDC8 - as well as many other studies - found that the typical information worker spends 24% of his time on on Interruptions (Email, phone, ...) ! 12%! searching and analyzing information. The average time 28%! Productive Content creation ! 15%! spent on email even amounts to 14,5 hours per week Meetings! including the document workflow, sales, scheduling or 20%! Searching through content! other business processes. As a result, traditional IT 25%! Thinking and reflecting ! systems are more likely to inhibit effective knowledge sharing and reduce throughput of the Information worker: • Corporate knowledge resides in multiple repositories that cannot be accessed centrally • Information is poorly organized/scattered across the organization • The amount of information is growing to quickly to keep up with • Ineffective search tools in place which makes locating new information hard • Inability to integrate internal and external data sources. These bottlenecks impede the information worker to perform at optimal capacity and induces a serious amount of waste in the process leading to suboptimal productivity as a result of: • Reformatting from multiple formats into one (document) format • Searching but not finding information • Recreating content • Multichannel publishing with multiple applications • Version control issues The IDC study concludes that an organization employing 1000 knowledge workers (with an average salary of $ 60000) loses $ 5,7 million annually just in the time wasted by employees information overload costs the U.S. having to reformat information as they move among economy $900 billion per year in "lowered employee productivity and applications. Although both Kaizen and Lean Six Sigma can reduced innovation."  The reason? be used to identify waste in the organization’s knowledge People are spending up to half their processes (or information work manufacturing), it is much day managing and searching for harder to define a one-size-fits-all solution due to the very information.     nature of information work (which is by nature not repetitive). 8 The hidden costs of information work - IDC white paper 2005 Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 8
  • 9. VI. Boosting information worker productivity One of the major hurdles in implementing “knowledge initiatives” is measuring knowledge worker productivity or in a more holistic perspective: the value created through information work. Knowledge work involves complex interactions with others, and many intangibles that are difficult to relate to metrics of corporate performance. Typical metrics are profitability, growth or customer satisfaction. It’s the technology, stupid Many tools (ECM, CRM, ERP,..) promise efficiency gains but today’s knowledge work often depends on creativity and innovation capabilities that require a more comprehensive definition of productivity. Productivity is concerned with achieving business objectives faster, but these business objectives may be difficult to measure quantitatively. One approach to measure the output of an information worker is by the level of knowledge work productivity. Wikipedia defines the knowledge work productivity 9 as the measure of the efficiency and effectiveness of the output generated by workers who mainly rely on knowledge, rather than labor, during the production process. While there is no real standard measurement of knowledge work productivity, it can be analyzed along several dimensions such as: quantity, cost, quality, timeliness, autonomy, project success, customer satisfaction, creativity, responsibility level, perception, and absenteeism. In terms of evaluating efficiency and effectiveness of the information worker, we might now start to think of some straightforward measures: time spent on searching, analyzing, interpreting, creating and distributing information (assets). Research suggests that there are several examples of organizations that have made real progress thanks to innovative combinations of enabling technologies and new work and management practices. Collaboration is the secret ingredient of high-performing companies which are more productive, profitable and innovative than their competitors 10 (Dorgan and Dowdy, 2004, Beardsley et. al., 2006). Technology can definitely change the way collaborative work is organized and facilitated. In turn this affects the nature of interactions, and these interactions’ ability to support fundamental business processes - in this perspective, these technologies have to be embedded in the core processes of the organization to generate sustainable value from collaboration. 9 http://en.wikipedia.org/wiki/Knowledge_work_productivity 10 Dorgan, Stephen J., Dowdy John J.: When IT lifts productivity. The McKinsey Quarterly, Number 4, 2004 Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 9
  • 10. VII. The Return On Investment Information Strategy maps describe how companies manage intangible assets to positively affect company performance and deliver value to key stakeholders. In our strategy map, Enterprise 2.0 clearly centers on learning and growth objectives which describe how the people, technology, and organization climate combine to support strategy. Kaplan and Norton see improvements in Learning and Growth as lead indicators for internal process, customer and financial performance”. ”Enhancing and aligning intangible assets leads to improved process performance, which in turn, drives success for customers and stakeholders”. Although they state that “Intangible assets should not be measured by how much money was spent to develop them (..) and that the value comes from how well they align to the strategic priorities of the enterprise, most organizations still use the more traditional approach of calculating the Return On Investment on Enterprise 2.0. This would be the same as saying that you want to measure the ROI of a cultural change program. Emerging value This puts us in an odd position because the strategic capabilities represented by Enterprise 2.0 are primarily emergent in nature, instead of carefully aimed at and unleashed at specific problems 11 (Dion Hinchcliffe). In practice this means that it is difficult to measure the direct value of a culture of openness, open knowledge management, social networking or emergent collaboration. Only when you look at the overall cause and effect chains with Enterprise 2.0 tools, it becomes clear that the trade-off effects will generate sustainable value. In the long run technology-enabled collaboration leads to new products & services (innovation), increased profitability, higher quality, more efficient operations, higher customer satisfaction and employee retention. In this particular case, you could even see this as technology-enabled innovation. This is pretty much in line with the research by Frost & Sullivan. In their research paper, they have measured how "collaborative" a given organization is and how this impacts business performance. They measure the impact of Collaboration Quality and Collaboration Capability on Business Performance along several quantitative dimensions: profitability, profit growth, sales growth, and labor productivity. Frost & Sullivan also evaluate performance along qualitative dimensions such as product development, product quality, customer satisfaction, and innovation. The authors define collaboration along two axes: Quality and Capability. Collaboration Quality is how an organization uses its collaboration technology and processes to drive business performance. CQ influences an organization's ability to compete today. The second component in the equivalence is Collaboration Capability or the driver of collaboration quality. Their study shows that a culture of 11 http://blogs.zdnet.com/Hinchcliffe/?p=334 Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 10
  • 11. openness, as a factor within capability, is the most important determinant of collaboration quality. A culture of openness is defined as to the ease of talking to anyone within the organization, the regularity of cooperation between units within the organization, and the accessibility of persons to those in other departments. A culture of openness (the Connected & Collaborative Enterprise) is an asset that is difficult for competitors to detect or imitate, making it a strategic advantage over organizations that are... not open (Enterprise 1.0). A culture of openness contributes to collaboration quality, more than twice the impact of a structure of decentralization or the use of collaborative technology in strategy implementation. Culture accounts for more than five times the impact of the breadth of collaboration in strategic planning, and more than seven times the impact of the use of collaboration technology for strategic planning. They conclude that collaboration does generate positive returns and that collaboration significantly impacts profitability, profit growth and sales growth. They add that the impact of strategic orientation is also a strong contributor to these performance dimensions hence the importance of dealing with Enterprise 2.0 on a strategic and executive level. But what is striking is that the most significant impact of collaboration on a single measure of performance is in the attainment of customer satisfaction, where of the three factors measured (collaboration, market turbulence and strategy orientation) it is the sole influencing factor, accounting for a whopping 41% of the forces driving customer satisfaction. The evidence that collaboration is such strong driver of this component of business performance underscores the importance of collaboration to success. A Spongebob SquarePants approach to labor productivity In their study they found that Labor productivity is also positively influenced by collaboration - which is consistent with the known synergistic effects of collaboration within an organization. They promote a holistic approach to collaboration which calls for both the utilization of 1. collaborative technologies (i.e. Enterprise 2.0) 2. The development of the company's absorptive capacity (i.e., how well a company is able to integrate new knowledge and technologies and use them to improve overall performance) to optimize the benefits of technology in the workplace. Such absorptive capacity is largely a function of corporate culture, structure, and decision processes. Product quality and product development are positively influenced by collaboration, as is innovation. Although innovation and product development The Strategic Role of are also influenced by the degree of market turbulence and strategy; their Intangible Assets Cannot impact is relatively weaker than collaboration. Be Addressed on a Stand-alone Basis. An In other words, a good strategy and market opportunities can impact product Integrated Program is Required to Support the quality, development, and innovation, but when these activities are performed Enhancement of All the collaboratively, it is collaboration that is the stronger catalyst. This is quite Organization’s Intangible logical, since changes in the tastes and needs of customers, and the Assets (Norton & Kaplan) possibilities offered by new technologies represent an opportunity to satisfy the customer through new and innovative products. Yet with the known benefits of concurrent and collaborative approaches to product development and innovation, collaboration is indeed a key ingredient. To wrap up their findings, we can say that Collaboration Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 11
  • 12. Capability and Collaboration Quality are key ingredients for effective collaboration. A Culture of openness is a strong driver of corporate performance but a critical driver for customer satisfaction. A connected and collaborative enterprise will have a competitive advantage as a result of: • Improved productivity of collaborative efforts to achieve a given task, • Increased effectiveness of supporting business strategy • Growing recognition that collaboration is a sustainable, competitive advantage, • Growing # teams committed to driving collaboration as a process in the path to success. VIII. Wrapping it all together: The strategy Map The Strategy Map by Norton and Kaplan helps organizations to describe the link between strategy formulation and strategy execution. Strategy Maps show the cause and effect linkages (critical success factors and causal relations) between four perspectives: Financial, Customer, internal business process and Learning & Growth. However, in our perspective the overarching (financial) strategic objective is not to create shareholder value but stakeholder value. In an E2.0 context, primary stakeholders are 1. management, 2. employees, 3. partners, 4. suppliers and ultimately 5. the “customer”. The underlying strategies will center on improving (knowledge worker) productivity as well as growth (improving profitability of the knowledge worker). Let’s reformulate the definition of Enterprise 2.0 and convert it into the program’s mission: To create a culture of openness amongst our stakeholders enabled by an effective ecosystem of social software technologies that provide rapid and agile collaboration, information sharing, emergence and integration capabilities. Incorporating these Enterprise 2.0 fundamentals as part of the value proposition helps us to achieve results by combining two strategies: A stakeholder intimacy strategy focussed on improving stakeholder engagement as well as an operational excellence strategy which aims to improve the quality, price and ease of performing information work. At this level, it is important to highlight the personal and business benefits of the strategic direction - and finding a common cause to engage all stakeholders in the action plan towards success. Identifying critical success factors and translating these into enabling strategies means that organizations also provide tools, resources and budgets to make this all happen. The following table suggests a number of critical success factors and enabling initiatives. In absence of a dominant (or guiding) coalition, we have used sources from a variety of research companies, universities, blue chips and industry vendors. By allocating the proper tools, resources and budgets to these initiatives, organizations can execute the underlying strategies in a structured and step-based way. It is worthwhile noting that only 20% of all efforts involves technology and the remaining 80% goes into changing the information behavior of the Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 12
  • 13. company. In this particular instance, Technology-Enabled Collaboration a.k.a. Enterprise 12 stands for the deployment of enterprise social software platforms that • Facilitate stakeholders in joining the company conversation • Enhance online community building • Encourage internal networking and online presence • Are freeform and emergent by nature i.e. where people’s interactions become evident over time • Accept all types of data and is freeform in its usage in the sense that there is no upfront workflow The underlying technology deployment, has to go hand-in-hand with a change management program that centers on an effective communications & collaboration climate. Specific initiatives focus on adoption of new information processes or on the marketing of the personal benefits in using social technologies. For the sake of simplicity, we see communication, marketing and change management practices as E2.0 overarching strategic themes and only center on actions and initiatives 13 that provide technology-related quick wins and sustainable frameworks for future expansion. Critical Success Factor Strategic initiative Create a culture of openness Learn for life program Reduce cost of email traffic Market ESS messaging capability Provide alternatives for on-site meetings Deploy conference & whiteboard functions Decrease training costs Launch eLearning space Reduce data redundancy Create central information repositories Improve communication & collaboration Roll out user friendly collaboration platform Enable virtual enterprise Provide virtual meeting spaces Create distributed teams Lower threshold for social linking Increase speed of information Enable broadcasting and live streaming Reduce Search time Enterprise Social search and collaborative tagging Quickly locate expert (knowledge) Rich user profiles & identitags Integrate partner/supplier networks Create virtual business communities Manage knowledge drain Create personal workspaces Improve quality of information Introduce rating and favoring mechanisms Prepare for changing workplace demographics Open up Gen Y communication channels Centralize knowledge Market the corporate plaza & forum More collaborative project management integrate time, scope, & budget features improve internal recruitment Harvest talent through viral campaigns Improve communication effectiveness Everybody’s entitled to tweet Improve innovation cycle Launch creativity & innovation contests Reduce publishing time Multi-channel sharing features 12 Shattering myths about Enterprise 2.0 - Harvard Business Review 11/2009 - Andrew P. McAfee 13 List has been composed on the basis of own research, client programs, teaching & lecturing Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 13
  • 14. These critical success factors are the result of consolidating various studies, research, publications and web-based postings between 2006 and today. They serve as a blueprint for defining CSFs and enabling initiatives but represent a sample set of possible cause and effect factors. This also applies to the definition of the key performance indicators and targets. It is highly likely that the proposed indicators cannot be measured today. Fortunately, most of these Enterprise Social Software Platforms have an embedded analytics module that allow to report and measuring the collaborative capabilities in the enterprise. Target figures are consequently blank but can be added based on a guesstimates and data consolidation and interpretation. As a consequence, most indicators are platform and network activity based but one can imagine other measures in the field of adoption, marketing and promoting a “new way of working”. Indicators such as # of change campaigns, employee meetings, executive road shows, management dialogues etc can complement the rating card. IX. Balanced Score Card 2.0 At the highest conceptual level, the Balanced Scorecard is a framework that helps organizations translate strategy into operational objectives driving both behavior and performance. A Balanced Scorecard Program is not a “metrics” project, it is a “change” process. Below table can be used as balanced score card to measure, control and steer the strategic initiatives linked to the execution of an Enterprise 2.0 program. We assume that all indicators are understood - or at least raise an Aha-Erlebnis for the technology-savvy reader. Likewise, all CSFs and dimensions should be well defined and agreed upon before data collection. Typical data sources for populating the suggested indicators are: Email systems, CRM systems, eLearning & Development solutions, Intranet, ECM/EDM systems, Net Promoter Score surveys, Customer satisfaction surveys, employee satisfaction polls... Whereas most of the data will require a well defined input source, for the moment we assume that social network activity is our primary indicator for the level of collaboration in the organization. As-is metrics might be hard to obtain but intranet, extranet and the corporate website might reveal some “hidden” knowledge about social network dynamics. But remember that a successful Balanced Scorecard program starts with a recognition that it is not a “metrics” project, it’s a “change” process. It should help to craft the right climate for change, create the vision & strategy, establish a guiding coalition and center on measuring the changes in corporate culture and behavior. As a consequence, measuring how E2.0/collaboration impacts profitability, profit growth and sales growth at this stage would be too soon - the trade-off effects will only emergence later on in the adoption curve (Rogers - Diffusion of innovation model) However, customer satisfaction can be included as CSF - as an indicator, a Net Promoter Score: By asking one simple question — How likely is it that you would you recommend [Company X] to a friend or colleague? — you can get a clear measure of your company's performance through the eyes of the customers (or employees, partners,... ) On 0-to-10 point rating scale 10 are the loyal enthusiasts whereas 0 to 6 are unhappy customers that give your brand a bad name. To calculate a company's Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are unhappy bunnies. Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 14
  • 15. Critical Success Factor Indicator Ta r g e t Customer Satisfaction Net Promoter Score Culture of Openness Net Promoter Score Cost of email traffic # emails per user On-site meetings alternatives # web-based meetings Tr a i n i n g c o s t p e r u s e r Tr a i n i n g c o s t p e r e m p l o y e e Data redundancy per user GB storage per user Communication/collaboration mix # available social media channels Distributed Enterprise # Communities Speed of information # content posts Enterprise Search time time per page views Find expert (knowledge) # social network connections Integrated partner/supplier networks # of hybrid workspaces Knowledge retention # user generated content units Information quality # tags Wo r k p l a c e d e m o g r a p h i c s Ratio Generation Y vs. baby boomers Centralized knowledge # information assets Collaborative project management # project members in workspace Internal recruitment % internal employees/new vacancies Communication effectiveness Click ratio per message Innovation cycle # ideas in innovation pipeline Content creation time Time per posting The final step in the process requires to reflect and evaluate the overall program, goals, strategies etc. in terms of benefits i.e. what-is-in-it-for-us as an individual or an organization? How will the new strategic direction help me/us in achieving our professional (and individual) objectives. It helps to evaluate the completeness of the mission, goals and see it through the eyes of the stakeholders. The what-is-in-it- for-us in an E2.0 context means breaking down corporate information silos, reduce search time, enable knowledge sharing, foster collaboration, mashup data and enhance integration capabilities. Most information workers will quickly see the benefits of (social) software solutions that • Allow easy access to corporate knowledge repositories • Facilitate sharing, tagging and structuring of information assets • Enable information pulling and content aggregations • Leverage the organization’s social brain by harvesting the wisdom of the crowds • Facilitate mashup and integration of internal and external data sources. Integrated collaboration suites a.k.a. Enterprise Social Software suites can easily remove the current information bottlenecks in the organization. Technology-enabled collaboration will enable the information worker to perform at optimal capacity and promises to reduce the waste in information tasks by means of social media and ESSPs. These Facebook/Youtube/Linkedin-like platforms enable • Aggregation of multiple information sources • Extended and Semantic Search capabilities • Multichannel publishing across multiple applications • Golden record creation with integrated authoring functions Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 15
  • 16. Social features including web-based communities,discussion forums, social bookmarking, blogs, wikis, social networking, media-sharing, mashups; folksonomies bref, user-centric applications will create personal and corporate benefits. A possible value proposition that can engage all stakeholders could sound like “We enable you to be more creative and innovative in a climate of effective collaboration“ Developing strategies and their associated outcomes is the easy part in the equation. However, most organizations fail when it comes to changing or enabling the required processes and aligning them with the wanted outcome. As a consequence, the strategy map must not only identify and link the performance drivers to the desired outcome but also give a clear direction for aligning HR and IT ‘strategic) programs. Linking individual goals to corporate goals might be an initial step to further investigate how enterprise-wide collaboration initiatives contribute to both the individual and corporate performance. Individual benefits Organizational benefits Initiatives -Enable knowledge sharing -Learn for life program -Reduce search time -Enhance Team work -Market ESS messaging capability -Find expert knowledge -Reduce Search Time -Deploy whiteboard functions -Work in virtual teams -Improve content creation -Launch eLearning space -Works across traditional silos -Enhance speed of delivery -Create information repositories -Be Productive -Reduce Travel costs -Provide virtual meeting spaces -Conduct Business, -Reduce versioning problems -Lower threshold for social linking -Be Responsive -Create better bonding -Broadcasting and live streaming -Reduce Travel time F2F Meetings -Reduce cost of storage -Enterprise Social search -Work in Teams -Technology-enabled innovation -Collaborative tagging -Effective Demand Management -Reduce innovation cycles -Rich user profiles & identitags -Leverage social network -Improve decision making -Virtual business communities -Reduce information overload -Retain knowledge -Rating and favoring mechanisms -Create communities (of Practice) -Cultivate weak ties -Gen Y communication channels -Effective communication -Improve discovery -Corporate plaza & forum -Location-independent -Foster collaboration -integrate PM features -Effective learning system -Manage cost of Information -viral talent-hunting campaigns -Increase presence -Break down knowledge silos -Corporate Twitter -Easy access to expertise -New workplace demographics -Creativity & innovation forum The level of "collaborativeness" of a given organization has a direct impact on several business performance dimensions such as profitability, profit growth, sales growth, and labor productivity. In addition, Enterprise 2.0 also works along qualitative dimensions such as product development, product quality, customer satisfaction, and innovation. Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 16
  • 17. However changing attitude and working on a culture of openness has to be the priority - alongside with the roll-out of (low-cost 14) social software suites that facilitate • Talking to anyone within the organization • Enhancing the regularity of cooperation between units within the organization • Improve the accessibility of persons to those in other departments. 14 Prices start at $ 3 per user/per Month or around $ 300 per Month for SMB - Enterprise pricing on Demand Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 17
  • 18. Ideas are easy. It's X. Conclusions the execution of ideas that really separates the A culture of openness is an asset that is difficult for competitors to detect or imitate, sheep from the which makes it a strategic advantage over organizations that are stuck in the 1.0 goats... thinking. In this paper we have identified several drivers that will contribute to both Sue Grafton collaboration quality and capabilities. We have shown that creating an ecosystem of social software technologies that provide rapid and agile collaboration, information sharing, emergence and integration capabilities will generate sustainable value for the organization in terms of business performance. The successes of social software platforms such as Facebook, Digg, Blogspot, Amazon, Wikipedia, Linkedin, Youtube, Flickr or Slideshare show that millions of consumers are willing to join a global conversation. The web - or in this case the intranets & community sites - are increasingly becoming global collaboration platforms. Enterprise 2.0 will help our stakeholders to discover and inventing new ways to share relevant knowledge @ blinding speed. Markets will get smarter—and the challenge for companies will be to outsmart the smart. Getting in tune with the Wikinomics paradigm means that even in the digital age, some old Darwinian statements are still valid: "It is not the strongest of the species that survives, nor the most intelligent, but rather the one most responsive to change" (C. Darwin). Enterprise 2.0 enables knowledge-driven organizations to jump to the next curve with the help of technology-enabled collaboration. In combination with effective change management initiatives that focus on information and knowledge behavior - organizations will realize quick wins in the field of knowledge management, communication effectiveness and internal networking. Enterprise 2.0 is about how an organization uses its collaboration & social platforms and processes to drive business performance. But Enterprise 2.0 is mostly about a culture of openness - a strategic advantage that contributes to collaboration quality, more than twice the impact of a structure of decentralization or the use of collaborative technology in strategy implementation. E2.0 will put steroids in the breadth of organizational collaboration for strategic planning, innovation and customer relationships building. But then again, are they ready to jump to the next curve? Jeroen Derynck . Jean Jaurèslaan 48 . B-9050 Gent . T + 32 476 96 17 49 . info@thinkingape.be 18