The Web 2.0 revolution has spawned hundreds of cover stories, thousands of companies, and millions of words of hype. But there’s one thing it hasn’t brought: Profits.
With the coming of the credit crunch and the global recession, hype won’t pay the bills. That’s why the next wave of Web 2.0 will be using collaboration to help businesses do more with less.
Web 2.0 Has Seen Explosive Growth, Where’s the Impact?
Facebook now claims over 140 million active users. If Facebook were a country, it would be the 10th largest in the world, right behind Russia and right ahead of Japan.
Yet if we were to measure the GDP of Facebook, we would come up with a negative sum. Facebook’s top applications include online bumper stickers and sharing a (virtual) beer. The top business application, the Visa Business Network, has about 50,000 monthly users. In comparison, virtual beers have 5.7 million. In other words, Facebook is about wasting time. It’s fun, but it’s not productive. Adding Chuck Norris facts to your Facebook page or poking your friends might be entertaining, but it’s not profitable.
The irony is that the Web 2.0 ethos of openness and collaboration has the potential to revolutionize business productivity … but until the global recession hit, there was too much money available in time-wasting consumer applications to attract entrepreneurs to practical business applications. But times have changed.
The Future of Web 2.0 Is Business
If the Web 2.0 ecology is to continue to thrive and grow, it can no longer rely on easy venture capital and bubble-era acquisitions. Companies will need to create and monetize value, which means a new focus on business.
Oliver Young of Forrester Research writes, “While so much of the buzz around Web 2.0 has focused on the business-to-consumer market, the greatest opportunity today for vendors is in the business-to-business collaboration space.”
All Work Is Knowledge Work
Collaboration is about enhancing knowledge work. Today, over 50 percent of the workers in the United States are knowledge workers. Forget about farms and factories, in the information age the real action is in the cubicles. Even in traditional manufacturing, up to 90 percent of employees never touch the manufacturing process.
That represents an enormous opportunity to make businesses more efficient — and profitable. And the business world has never been more in need of collaboration.
Productivity Used to Be About the Individual, but Today, It’s All About Collaboration
Historically, productivity technology focused on the individual. Think about previous advances like the planner, the PDA, and the granddaddy of them all, Microsoft Office. These tools are designed to be used by individuals to accomplish individual tasks.
Today, however, it’s all about collaboration. Linux, an open source, community-developed operating system, is the dominant software powering the Internet. Wikipedia, an online encyclopedia that anyone can edit, offers broader and better content than the Encyclopedia Britannica. And in the United States, an obscure freshman Senator, Barack Obama, used a grassroots effort to organize a landslide victory in the 2008 presidential election.
Collaboration + Profits = The Next Big Thing
Whoever manages to combine collaboration and profits will have the next big thing. If you can merge the collaboration and explosive growth of Facebook with the productivity and revenues of Microsoft Office, you end up with what Forrester calls a $1.8 billion opportunity. And thanks to the global recession, that opportunity has never been riper.
Doing More With Less Is the New Black
During good times, businesses are willing to gamble on stories and buzzwords, but during bad times, the focus returns solidly to cutting costs. That’s what collaboration can do.
Gil Yehuda of Forrester Research writes, “In the current economic climate, Forrester believes collaboration tools can save enterprises operation costs by getting people and processes together quickly and efficiently.”
Yet before you jump into adopting collaboration tools, take the time to consider which tools are most likely to lead a productivity revolution in your workplace. For example, Forrester predicts that podcasting will only be a minimal success, while wikis and social networks will be a significant success.
Collaboration in the Cloud
Choosing tools that live “in the cloud” will be more successful than buying software and servers. Besides the obvious fact that traditional on-premise software generally carries both a hefty up-front costs in licenses and hardware, as well as requiring higher ongoing overhead in both maintenance and management, cloud-based collaboration is also a better fit with the workplace of the future. In an era of outsourcing and offshoring, traditional within-the-firewall applications are a liability, not an asset. And on-demand services also offer more rapid time-to-market, as well as the option to begin with a small trial. Some collaboration vendors even offer free trials or even basic free versions that may suffice for initial deployments.
Ease of Use = Adoption
If you decide to start with a limited trial, ease of use becomes more important to adoption than extra features. Take the classic example of the Apple iPod. Before the iPod, MP3 players were complicated devices that modeled their dizzying array of controls on traditional stereo equipment. Apple offered the iconically simple and easy-to-use iPod, and the rest is history. Collaboration tools whose purpose is to help bring people together aren’t very useful if they’re so difficult to use that your employees refuse to adopt them. One of the ways that Google Apps has achieved success is by using consumer adoption to drive business adoption. When people are already familiar with the tool from outside the office, they’re much more likely to use it inside the office.
Collaboration Across Boundaries
The major benefit of collaboration lies in bringing people together, which makes it especially important to select tools that allow your organization to collaboration across boundaries, be they geographic, organizational, or corporate. In a world that is “hot, flat and crowded,” coordinating teams that include employees, customers, vendors and partners across multiple continents becomes more important than ever.
Early adopters of collaboration tools are already seeing significant savings. Deloitte Digital, for example, was able to reduce by 90 percent the time required to edit new business plans by switching from the traditional method of e-mailing Microsoft Word documents as file attachments to collaborating within a wiki environment. And the benefits included improved results as well, according to Peter Williams, CEO of Deloitte Digital: “We spent more time developing and thinking about the plan, rather than running around like headless chickens dealing with the last-minute mayhem of Word documents with track changes everywhere. The wiki made it really easy. And because it was easy, we were more able to involve people.”
When the Web 2.0 revolution is complete, these simple examples of radically improved business productivity will be its greatest legacy, not a series of corporate names with missing vowels.
Jim Groff is CEO of PBWiki, which provides a platform for creating business, educational and personal wikis.