For Jeff Herrmann, co-director of research at investment company Manning & Napier Advisors, the impetus to invest in Web 2.0 came abruptly late last summer. That’s when one of Herrmann’s analysts left the company — and much of his recent research vanished as well.
It wasn’t stolen — just lost somewhere on the former employee’s hard drive, Herrmann says.
“After he left, his replacement showed me a stock he thought was interesting. I said, ‘Wait a minute; we already researched that stock.’” The analyst who had left had researched the stock thoroughly and developed a strategy about when to buy it. “But do you think we could find that work? No way,” Herrmann says. “It was nowhere to be found.”
Herrmann realised that a wiki — a collaborative website to which everyone can contribute content — might have prevented the loss.
Now, Manning & Napier analysts use wikis from Socialtext to share and store research, commentary and meeting notes. The wiki is organised by industry, such as healthcare, and then by theme, such as the plight of the uninsured. Content can be typed, pasted or linked into the wiki. Some emails or email threads can also be sent directly to the wiki. And all of that unstructured content can be searched by keyword, as well as tagged for subject categories.
“We like it because it’s a peer review system, not a hierarchical system. We work in teams, each covering a sector, so this makes it easier to collaborate,” says Herrmann. “We also wanted to do a better job of documenting and saving things that don’t get saved, as part of our legal obligations.”
Herrmann is among the growing number of executives to recognise the business value of Web 2.0 tools. Innovations such as wikis, blogs, RSS feeds, podcasts and social software are ubiquitous in the consumer market, and many people have quietly downloaded Web 2.0 tools at work to use on their projects. In a survey conducted earlier this year by consulting firm McKinsey & Co, nearly three-quarteres of the 2,847 executives polled said they planned to maintain or increase their spending on Web 2.0 collaborative technologies, for use either externally to communicate with customers and partners, or internally to improve collaboration among employees.
But until recently, CIOs and other top executives have been slower to recognise their value.
“Companies look at this and say, ‘I understand the technology; I just have no idea how I can make this part of my corporate activities,’” says Ron Schmelzer, an analyst at ZapThink in Massachusetts.
CIOs also have concerns about security, governance, IT support and integration of Web 2.0 applications with existing systems. And the very nature of Web 2.0 — distributed and egalitarian — makes some managers nervous. “Web 2.0 is decentralised,” explains Schmelzer. “There’s no centralised authority to mandate or control [it].”
Major vendors of Web 2.0 tools for corporate use are addressing these concerns, however. They are adding management and security features, and some are assembling these tools into suites that can be implemented and administered as a platform.
Meanwhile, more businesses are experimenting with Web 2.0 tools for a wide range of activities, from content management to employee recruitment.
The case for Web 2.0
Honolulu-based Hawaiian Airlines recently grappled with the problem of how to organise and pare down a glut of content built up over time by customer service staff in airports, at the airline’s call centre and on its website.
“We had a ton of duplicate data. We have people at the airport answering the same questions as the phone reservation people and the website,” explains CIO David Osborne. Each group was creating its own content.
The airline wanted to consolidate all that content into one repository that could be easily referenced, searched and updated by the service staff. The solution: a single customer service FAQ on a wiki, using the Web 2.0 features in Microsoft’s SharePoint Server 2007. “Now we can have all of that data in one place,” says Osborne.
Wikis aren’t the only Web 2.0 tools used for information management. The Discovery Channel’s Educator Network, an online community of teachers, uses a web-based collaborative database — Dabble DB from Smallthought Systems — to manage its list of 11,000 education-related events.
Instead of Discovery Channel staffers collecting information and posting it to the website, the Educator Network’s 2,500 “Star Educator” volunteer teachers remotely update the information pertaining to their own regional and online events.
This approach has saved the Discovery Channel approximately 75 staff hours per week, says Steve Dembo, online community manager for the network, adding, “By having it in Dabble, we’re able to pull out all kinds of reports that we weren’t able to before.”
The use of LinkedIn’s networking service saved Jeff Hoffman from making a major hiring blunder last December.
Hoffman, CEO of Basho Strategies, a sales training firm in Massachusetts, was interviewing applicants for a midlevel business development position. As part of the process of collecting references, Hoffmann sent queries to people listed on LinkedIn’s networks of the most promising candidates.
The feedback he got on one job seeker was particularly revealing. “Two people responded that she was abrasive, didn’t work well with salespeople and had not had much success in her jobs. But what was really interesting was that one of them was from a company not listed on her résumé,” says Hoffman. “The feedback was enormously important, because any new hire exposes us to a big risk. It’s arguably the most expensive mistake you can make.”
Social networking software can be used externally to enable a company’s customers to connect with one another, as well as internally to enable employees in large companies to link up. For example, Hawaiian Airlines plans to use SharePoint Server’s blog, people search and MySite features to create a web-based community for employees. It is also considering something similar for its customers, who are mostly vacation travellers.
The MySite feature provides a place for employees to list their skills and experience, colleagues, association memberships, latest projects and other information, and it permits others to search the profiles by keyword.
“Internally, we’re looking at department sites where groups could add news, photos, commentary, planned activities and improvements to working practices,” says Osborne. “It’s basically a set of community sites with interactive content.”
Project management aids
Web 2.0 technologies are also being leveraged as project management aids, either alone or as part of larger project management applications.
RT Logic, a maker of satellite systems in Colorado Springs, relies on the wiki function in CodeBeamer, a configuration management tool from Intland Software, to document the progress of products in development. The company currently has 117 wikis that engineers use as their communication channels for projects.
James Sullivan, configuration manager at RT Logic, says lightweight wikis are ideal for project collaboration because of the ease with which engineers can add comments. It’s also possible to revert to prior versions of a wiki if a mistake is made.
“It’s a living document that progresses as the development progresses. It’s very flexible and easy to use,” says Sullivan. “Since we can back up and see what the history was, it gives us a snapshot of where we’ve been and where we are now.”
The Discovery Channel’s Educator Network offers Web 2.0 technologies to help teachers share ideas. Among them are Six Apart’s TypePad service for blogging, StikiPad’s StikiPad for wikis, iLike’s GCast for podcasts, Simulat’s Vyew live conferencing tool and Yahoo’s Flickr photo-sharing application.
Some teachers who recently went to South Africa and New Zealand as part of the Discovery Educator Abroad project used Flickr to post their photos, for example.
“They’re tools to communicate with other teachers,” says Dembo, noting that Web 2.0 technologies are easy to use. “With these kinds of tools, anyone can jump in.”
Basho Strategies draws clients and potential clients to its website with a blog where visitors can read sales-related commentary from Basho executives and post feedback. In addition, Basho clients can subscribe to an RSS feed of podcasts on sales tactics. “Our clients respond very well to the personal approach. Blogging and podcasts are a natural extension of that,” says Hoffmann.
Despite the benefits of Web 2.0 tools, smart corporate users realise they can’t effectively replace face-to-face and phone contact between people. For example, at RT Logic, engineers make use of wikis for internal collaboration, but the company has so far eschewed implementing Web 2.0 for customer communication. Currently, if a corporate client wants to find out how a product is progressing, he has to call a lead engineer at RT Logic to discuss it.
Sullivan says the company has considered implementing a blog for customers. One possibility was to have engineers post updates on the status of projects and allow customers to log into their own project blogs and get updates anytime they wanted, rather than playing phone tag with the engineers.
Another idea was to allow customers to go online and file their own change requests for product features, or post requests and questions to a wiki, where RT Logic engineers would answer them.
While both ideas seem tempting, RT Logic has so far decided against them, reasoning that Web 2.0 tools might actually impede good communication with customers. “It puts a layer of separation between our engineers and our customers,” Sullivan explains. “We like the feedback we get when we have direct communication with our customers. We’re able to ask more direct questions and get to the root of the problem.”
There are also lingering concerns about Web 2.0 in the corporate setting. Hawaiian Airlines’ Osborne worries that uncontrolled use of wikis and blogs could lead to unsuitable content being distributed. “We’re not going to let people just have a free go at everything. There’s liability around that,” he says.
So the airline will implement an approval process for creating wikis, as well as employ the security features in SharePoint to control who can post content.
Experts note that it isn’t that difficult to set up a controlled Web 2.0 environment. “Some feel that it will expose more problems to a wider audience, but a wiki can be managed and monitored in a central place,” says Jim Murphy, an analyst at AMR Research, based in Boston.
In fact, most of the products aimed at businesses have features for setting up role-based access rights for various users. But the flip side is that too much security can negate the benefits of Web 2.0. “If you’re trying to create an open, collaborative community and you lock it down, you won’t have one,” says Murphy.
Another issue is that many Web 2.0 applications are hosted services. The idea of having a blog, wiki or even a podcast with private company content on someone else’s server can make executives nervous.
Hosted service-providers offer security measures, of course, such as SSL encryption, passwords, firewalls, backups and archiving, but if those aren’t sufficient, it’s often possible to buy the software and bring it in-house. That’s what Manning & Napier did after upper management expressed concerns about security.
“We were getting [Socialtext] through the internet gateway, but the powers that be said it had to be behind the firewall,” says Herrmann.
Here come the big boys
Until recently, the Web 2.0 market was dominated by smaller vendors. But the major players have begun adding Web 2.0 capabilities to their existing products. Microsoft’s SharePoint Server 2007 has templates for wikis and blogs. Last November, Intel introduced the SuiteTwo Web 2.0 package, which combines technologies such as Six Apart’s Movable Type for blogging, Socialtext wikis, NewsGator for RSS feed reading and SimpleFeed for RSS feed publishing, all integrated by SpikeSource. IBM, Oracle and Google are all adding various Web 2.0 features.
As Web 2.0 becomes part of leading business applications, more organisations are likely to adopt them. According to a recent survey by Forrester Research, large organisations prefer to purchase Web 2.0 products from incumbent vendors. Of the 119 CIOs surveyed, 71% said they would like to buy them from a major vendor, and 74% said they would prefer to get Web 2.0 technologies as a suite.
In other words, businesses don’t want a collection of Web 2.0 tools; they want an “Enterprise 2.0” platform. One key reason for this is a desire to have complete interoperability and integration with existing business systems.
As Forrester analyst Ron Koplowitz explains, “If you’ve already chosen the vendor [for your enterprise platform], then you’ve already made a decision about security, directory services and operating systems. So generally, you’ll have everything in place.”
Support and maintenance is another motivation for buying from a single vendor. “It’s much easier to manage one piece of technology that is integrated and runs on one box,” Osborne explains.
Whatever you ultimately decide, the time to start considering Web 2.0 is now. “We’re at the stage where it’s so easy to experiment that it’s almost a liability,” Murphy says. “You don’t want people going down the wrong path with a tool that isn’t usable in the long run.”
The best move that a CIO can make, he says, is to start asking department managers what Web 2.0 functionality they need, and find the common denominators that will dictate which products to purchase. Then make a decision before your employees do.
2.0 tools & terms
What are Web 2.0 applications, exactly? Here are the main types:
Blog. Short for “web log,” a blog is a web journal that lets users post comments or news. Often, they also let readers post feedback.
Podcast. An audio or video file distributed over the internet through RSS or another syndication feed.
RSS. Really Simple Syndication is a technology that lets users subscribe to feeds that deliver wiki or blog updates or even more general information such as traffic alerts.
Wiki. A collective web page that allows users to post or link content without having to use HTML.