A review of Andrew McAfee’s Enterprise 2.0 book and a bit of related Gartner research.

Cross posted from my Gartner blog.

I received a review copy of Andrew McAfee’s Enterprise 2.0 just before Christmas, so I added it to my book pile as an extra Christmas present. Thank you Andrew and the publisher, HBS.

In reviewing books, I have a simple test. Would I spend my own money on a copy? This book passes that test.

There are a goodly number of reviews on the web already, so I’ll keep this review relatively short. I found Jon Ingram’s review to be particularly useful.

The book is clearly written, well structured and it is refreshingly devoid of hype (other than the slightly jarring tagline). McAfee writes well, aiming at a management rather than a geeky audience. It is an easy but nutritious read, there is little technical jargon yet it doesn’t over-simplify or seem condescending when explaining technology. More importantly It isn’t just preaching to the enterprise 2.0 choir, nor it is the Iskra for the Enterprise 2.0 revolutionaries, whomever they may be.

In the same way that technologies and new business practices have changed businesses in the past, so to are new technologies and business practices changing things today. McAfee shows through 4 case studies how collaborative technologies are changing the way we work, and will work.

The term emergence is important to Enterprise 2.0, and McAfee explains this thoroughly. I particularly liked this sentence, Emergence is the appearance of global structure as a result of local interactions.

The section on ROI is also very useful, and not just for Enterprise 2.0 projects. He goes through the limitations of ROI models in some depth, even though he uses baseball examples, it makes sense.

It was also good to see that Argyis and Schön’s Model 1 and Model 2 theory of behaviour, Granovetter’s The Strength of Weak ties, and Burt’s Structural holes were referenced in the book. I’m of the view that we need to be applying more organization design and sociology to business and IT thinking. There are many models in the sociology that we could use to better understand organizations and how they change.

McAfee also references von Hippel and John Allen Paulos. Both are essential reading.

I would have liked to have seen a further reading section. The HBR book site  wasn’t available when I looked today. This book would be well served by a supporting web site, emergent or otherwise.

The final 2-3 pages of the book are key. They link the Enterprise 2.0 proposition back to his broader research (with Brynjolfson, Zhu and Sorell) into IT and competitive difference. He briefly makes the case for how Enterprise 2.0 can improve ERP, and I wish he had made more of this argument in the book.

With regards to the relevance and the extent of emergent technologies and social software in an enterprise context, let me take the liberty of pointing to the blogs and / or research of several Gartner colleagues, for instance Anthony Bradley, Jeff Mann  Andrea DiMaio  Carol Rozwell, Nikos Drakos and Adam Sarner.  For Gartner clients have a look at The Business Impact of Socialization: Real-World Measurable Results. This collection of research highlights 16 examples of social computing that were not open-ended, undefined experiments, but rather were purposeful engagements resulting in actual measurable business benefits. (client access needed)

Somewhat selfishly, I would have liked to see more on the HR implications of enterprise 2.0 in the book. I’m doing a lot of work in this area at the moment. I have recently published a collection of short case studies on social software’s impact in HR as part of 2009 Business Impact series and I field a lot of calls from HR and IT who are looking at the HR implications of social software, both behind and beyond the firewall. In 2008 I published a note, The Business Impact of Social Computing on HR Data. (client access needed) but here is an excerpt.

 Social computing’s impact: With social computing, we’re seeing a new set of HR-relevant data: volunteered data. Employees, managers, executives, applicants and customers share HR-relevant data, but only in ways that suit them, rather than in the structured format that is required by traditional HR processes. People are sharing data to get things done and to socialize. Examples include employees maintaining internal blogs, in which they discuss their skills and interests; workgroups and document sharing via wikis; and social networks. In addition, networks such as Facebook and Xing often offer richer, deeper insights into career history, skills, qualifications and business interests than traditional HR skills and career history databases do. Organizational changes often are reflected in LinkedIn before they appear in the transactional HR management system.

I made this strategic planning assumption then.

By 2012, volunteered, HR-related data will exceed mandatory HR data in volume and value. Leading HR organizations will invest more time and effort in managing and exploiting voluntary data than they spend on mandatory data.

This is similar to the points McAfee makes about imposed, emergent and competitive advantage.

I look forward to reading his next book, and continuing to follow his academic research. As a final aside,  McAfee cites JP Rangaswami in the book. I’d suggest reading his blog. JP is high up on my list of people who I’d like to have write a book.

Thanks again, Andrew, for the copy.

Putting web 2.0 in a legal context

For me, most of next week is all about computer law. I’m attending Gikii and the Society for Computers and Law conference – Law 2.0? : New Speech, New Property, New Identity. The SCL event is chaired by Lilian Edwards, Professor of Internet Law, University of Southampton, and Director of ILAWS, the Institute for the Law of the Web at Southampton, and  is hosted and sponsored by the firm Herbert Smith.

From the programme.

  • How do web 2.0, the “Semantic Web” and distributed computing interact?
  • What are the commercial and business model implications of web 2.0?
  • What are the social implications of social networking software and the “open access” paradigm?
  • What are the intellectual property and data protection laws impacting on these technologies and their exploitation?
  • Should public sector geospatial data be bought, sold, and “mashed up”, and if so, on what conditions?
  • How can identity and reputation be managed on the new Web?
  • Does Europe need to rewrite the laws of privacy and data protection in a web 2.0 world?
  • What dangers are we exposing children and the unwary to in a world of ubiquitous disclosure?
  • What laws govern virtual worlds? How do we do business there?
  • How do control mobile and distributed data in a connected world?
  • Should platforms like Facebook and You Tube be legally liable for user generated content?
  • Is Google legal?
  • What next in the music download wars in a web 2.0 world?

There will be a round table discussion on : Are tools like blogs and wikis inherently disruptive technologies in the workplace, and for law, democracy and politics?

I may try some live blogging again and maybe even a podcast (note to self don’t forget microphone, and remember that you are in a room of lawyers).

On Tuesday evening I’m attending the computer law group meeting in middle temple, this is the first time in almost two years that I’ve managed to be in London when the meeting is on, so I’m really looking forward to it.

On Wednesday I’ll be presenting a short paper on accessibility and web 2.0 at the absolutely packed agenda second Geek Law conference( gikii 2). I presented a paper at last year’s Gikii conference, so it is great to be allowed back. I understand from Andres there is a project underway to turn the proceedings into a book. Last year’s event was great, being described as: “Like a normal conference, only without all the boring papers”

Catching up with the law meets computers crowd in the UK will be fun and simulating and I perhaps I’ll meet the mildly notorious Geeklawyer. Hopefully these three days of academicness will motivate me finish (write) the evil thesis.

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Podtech’s relevance?

Over on Techcrunch there is one of those blogsphere spats going on about Podtech.  I’ve no idea about Podtech’s financing,  its business model, or who said what, when.  I’m the first to admit that 2.0 funding and revenue models are mysterious, I mean how on earth do you value Facebook anyway?) 

I visit Podtech most days and find it very useful, so I thought I’d spend a moment jumping to their defence by rebutting the comment  El Guapo left over on Techcrunch.

El Guapo

OK, I just went and looked at podtech.net. Wow, its horrible. Actually, I’m not even sure what it is or what they are trying to accomplish. Who wants to watch videos about IBM SOA conferences? I say queue up the dead pool…

I want to watch videos about IBM. For anyone working in the software industry, and who hopes to sell any software to any sort of enterprise ought to understand what IBM are up to.  Scoble’s interview with Mike Moran is a must watch for anyone in software marketing. It touches on the cluetrain, search and  the death of the brochure.  (Dennis agrees)

[podtech content=http://media1.podtech.net/media/2007/07/PID_012043/Podtech_InternetStrategy_IBM.flv&postURL=http://www.podtech.net/home/3712/talking-with-an-ibm-distinguished-engineer-about-marketing &totalTime=889000&breadcrumb=4970f5a1a5164ea1a39f304e36843798]

 

If you’d like  to glimpse into how large corporations are using Second Life and Business Game Simulation, then watch James Governor’s chat with Sandy Carter 

[podtech content=http://media1.podtech.net/media/2007/07/PID_012033/Podtech_ibm_sandy_carter_soa_education.flv&postURL=http://www.podtech.net/home/3703/sandy-carter-on-ibm-soa-education-bpm-games-and-the-soa-business-catalog &totalTime=434000&breadcrumb=f6d95752796b4263a2d297c45a011679]

 

Also I  watched James talking with  Robert Le Blanc (interesting bits on IP), and Ali Arsanjani on snowballs and fractals.  Putting a human face to SOA is goodness.

El Guapo, you might find this boring, but I don’t. Keep it coming Podtech, and I’ll keep watching.

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 (disclaimer: James is a mate)

Wikis and RFPs

RFPs are often huge documents with literally thousands of questions that buyers inflicit on software vendors in order to assess the relative strengths and weakness of the product. They are a modern form of water torture to fill in, and some of them should be against the Geneva convention. 

I thought that will my current role I had managed to avoid the joys of RFP response, but somehow I found myself manoevered into working on one at the moment. Damn.

Actually it is one of the better ones I’ve seen in a while.  But there are at least 8 of us working on it at once.  It is a real pain emailing it around, as it is now too big for the mail system. Versioning is a nightmare. Invariably something is missing, like a screen print or a reference story, and it is a huge scramble to find it.

There must be a better way.

WIki to the rescue?  You give access to the team members, people could dump useful materials into the wiki, and then a gardener could craft it into a response, progress reports and so on could all be driven via the wiki, easy to allow management visibility, last minute pricing changes etc updates via RSS and so on.  It would also be an easy way to drive reuse.

I try and avoid working on RFPs, but if I find myseld dragged kicking and screaming to one I’ll insist that we respond via the wiki.

Surely it would  be even better to give the customer access to the wiki too. This would enable them to access your responses, ask questions, get clarification,  and you could easily provide access to much richer materials such as click through demos, reference videos and so on. It would help create transparency between the buyer, partner and software vendor.

Alternatively, the buyer could set up a wiki page, and ask the vendor to fill in responses there. This would help with comparing responses, and responding to vendor queries. It would also give the buyer a living document when starting the post evaluation project, rather than an expensive doorstop.

I’ve not done much research on this, but If anyone has any template ideas or guidelines, please let me know. Perhaps the wiki vendors already offer this sort of template, if not then perhaps they could? 

 

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Selling and simplicity

My regular readers will have noticed that I have become enamoured with Design Thinking.  At first I thought this was a good thing for product development, as it would help drive more simplicity into our products.  I’m seeing evidence of this simplicity in things like Duet and Muse,  and the early sneak I have seen of thenewdon’tblogthis stuffonthepainofdeathproduct, all goodness….

Yet the more I think about simplicity and design, the more I have realised that it isn’t just in the product development that we need to nuture a culture of simplicity by design. It is everywhere.  If the product is simplicity manifest, but the marketing and sales are complicated, then we will have a problem.

 Steve Mann is a senior chappy in the marketing dept here at SAP. He is based in NYC. (Mark Crofton is in his team)  I enjoyed what Steve had to say here. I hope he doesn’t mind me lifting the almost the  whole post. .

We conducted some customer ethnographic interviews today as we continue in our design of a new experience for SAP.  We received very explicit feedback:

  • Get to the point – give me the info I need right away and in a no-BS fashion
  • Stay away from the SAPanese
  • I want to make a decision on whether to explore further or to go away… and I want to make that decision quickly
  • KEEP THE DESIGN SIMPLE
  • They threw up all over the content
  • Show me exactly what the components are and how much they cost
  • Overall, give us a buyer’s view not a technologist views of the world
  • As far as the products themselves, tell us what they do right away
  • Communities.. get me right into the forums and I want to see references and case studies, events calendar, and they want to be tied geographically to other users and partner offerings

Now this is seriously radical, because it means we are actually, shock horror gasp, starting to ask folks how they would like to be sold to. Clearly with all the stuff going on with new products, we need to figure some new ways to sell and communicate with the market.  Reducing cost of sales, yet delivering a better experience is important and not just because it will give Vinnie one less thing to moan about.

Steve mentions more in another post here.

 We believe that its not enough to run a sales cycle but the big guys must loosen control over that sales cycle and empower the customers/prospects to be in control of that sales cycle. 

I can join a community of interest to interact with other prospects and to actively gather the information I need from my peers rather than from a vendor

I can use Web 2.0 capabilities to subscribe, create and collaborate on content that is important to me

I want to give you feedback any time, any where, and  I want my vendors to take it seriously

I want my vendors to maintain context over the course of my engagement with me – I should never have to repeat myself

Procuring solutions should be fast and easy

This is all rather cluetrainy, and it reminds me a lot of what James Governor was on about the other day, every blog a potential RFP?

Steve is suggesting a fundamentally different approach to selling software. I’m all ears. I have spent too many days and nights filling in 600 page RFPs and I have inflicted many a powerpoint slidedeck on hapless visitors to starship enterprisey.  Death by demo doesn’t do anyone any good. 

My Lord, it is a plan as cunning as a fox who’s just been appointed Professor of Cunning at Oxford University

If I was in marketing, and looking how to apply Steve’s first two  points, I  would start by changing how we write press releases.  At the moment they are a paper based form of Chinese water torture.  The PR folks should be reminded about the Geneva Convention and its prohibition of cruel and unusual punishments.  The English makes me bilious and the jargon per square inch is ridiculously and perilously high.  To be fair this is an industry illness, but SAP has it bad.

Many of my fellow enterprise irregulars were confused about the recent A1S and All-in-one announcements, and reading the press releases, I can see why. 

 I suggested to David that he watch the analyst conference instead, and was kind enough to take the time and do so he posted his views here.  IMHO Kagermann was clear, precise and to the point in his press conference, and the slides are well worth a look if you want to understand SAP’s plans.  But not everyone has the time or inclination to sit through a press conference. 

 If all a press release does is generate a “huh?” and grammatical queasiness, then why do it?  A few decent blogs could get the news out much more effectively. 

As A1S sheds its cloak of secrecy I’d like to see its  solution managers blogging,  over in SDN and out in the blogsphere generally. Conversing directly with the market, announcing new features and ideas as they are ready, gathering direct feedback, building  communities.  There are solution managers blogging already, but there should be more.

 SDN is a fabulous conversation, and a real competitive advantage.  Indeed, SDN may well be a  channel that meets a some of the goals Steve outlined above.  Selling by conversation. Imagine that, a cunning plan indeed.

 

IT matter mutter.

Nicholas Carr reviewed Andrew McAfee’s recent HBR article.  

I’m reminded of most of the  speeches at Caesar’s burial. They begin by praising someone, but then go onto do the opposite, and get a crowd excited.  Unlike Mark Antony and Brutus, Nicholas is less than convincing this time. (Shakespeare and Nicholas do have similar views on the wisdom of crowds stuff though)

What Nicholas didn’t say is far more interesting.

Two weeks ago Nicholas argued rather smuggly that there has been no rebound in IT spend,  this, he feels, vindicates his IT doesn’t matter position (2003)

Andrew kicks off his article:

corporate IT spending has bounced back from the plunge it took in 2001. In 1987, U.S. corporations’ investment in IT per employee averaged $1,500. By 2004, the latest year for which government data are available, that amount had more than tripled to $5,100 per employee. In fact, American companies spend as much on IT each year as they do on offices, warehouses, and factories put together.

Nicholas didn’t challenge this. That is because the facts are on Andrew’s side. IT spending is up. Organisations are spending even more money on ERP and other Enterprise stuff than ever before. SAP and Oracle’s financial results illustrate this clearly.

AMR backs up Andrew’s point with some  soothsayerisms,

AMR Research forecasts U.S. companies will increase their ERP budgets by 11.3 percent in 2007. “This year and next will experience levels of ERP investment that we haven’t seen since the late 1990s,” said Jim Shepherd, a senior vice president at AMR Research. “At that time, new customers were replacing legacy systems with ERP suites. Today, spending is driven by a healthy mix of new customers, consolidation projects, add-on applications, and deployment to additional users.”

Most industries would call an 11.3 growth pretty good. And this is boring old utilitiesque ERP. Additionally, if we look to the booming hip SaaS sector, we see SFDC, successfactors and others doing really well too. Collaborative tools like wikis are taking off (Socialtext and others are doing rather nicely)

Andrew’s final sentence is key,

Vendors offer a wide range of FIT, NIT, and EIT, so these technologies are not rare and seem to be highly imitable. However, people often forget that while the software itself might not be any of those things, a successfully implemented system isn’t easy to replicate. Because of the managerial challenges inherent in its implementation, IT meets all four criteria when a company succeeds in applying a technology and, consequently, gains valuable capabilities.

 I’m not the only one that thinks that Nicholas gets it wrong. Neil over at  Macehiter Ward-Dutton notes

However, I disagree with Carr’s conclusion:

McAfee’s article may not be quite as clarifying as it is intended to be.

Had McAfee had stopped at the classification then I would have agreed. It’s the marrying of the technology classification to the organisational implications where McAfee clarifies things, since it helps to facilitate a dialogue between business and IT in a language which both sides understand. Equally importantly, it moves beyond the technology selection phase to outline the role of the business during adoption and subsequent exploitation.

Nicholas picks up that Andrew’s 3-tier model is  a simpification of reality, and it doesn’t work in all contexts. But no model does.  Sitting here in software land I find the model more useful than blunt 1.0 vs 2.0 oversimplifications.  Does the model help managers understand IT better? Well yes it does.  In a page or two of an HBR article packed with case study snipbits one can’t really expect much more.

Nicholas, as a former editor, should know that Harvard Business Review is not really an academic publication- It is aimed a business manager readership, and lets us businessy types think that we are reading something academic. That makes us feel cleverer than we are, and that is a nice, warm feeling.  It is made up of short, interesting thought pieces but it is not the home of rigorous academic model building.  I think it is a fabulous magazine, no mistake.

I’d suggest that Nicholas should read this paper from Andrew and his colleagues, Erik Brynjolfsson, Michael Sorell, and Feng Zhu.  It is dense, heavygoing and empirically sound.  And it knocks his IT doesn’t matter argument for a Kevin Pieterson.

 To quote a bit….

This section empirically investigates the effects of rapid IT adoption on the competitive dynamics of US industries. As Figures 1a and 1b show, the U.S. economy became substantially more IT intensive from 1987-2004. Figure 1a plots corporate IT stock (at historical cost) per FTE by year; the graph shows accelerating IT intensity from 1987-2000, followed by two years of decline corresponding to recession. IT  per FTE resumed its upward trend in 2003. By 2004, at more than $2,600, it was the highest it had ever been and was more than three times higher than it had been in 1987, even before adjusting for the large increase in real computing power delivered per dollar of expenditure. Figure 1b plots IT’s percentage of total investment in tangible wealth each year, together with the equivalent percentages for equipment and plant (the three values for each year sum to 100). IT’s share of the total increased more than 10% during this period to almost 23% of total tangible wealth.

Stretching my Shakespeare metaphor beyond repair, it is time for Nicholas Carr and Andrew McAfee to meet at Philippi. 

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