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What Enterprise 2.0 means for the CIO and IT department

Our Implementing Enterprise 2.0 report is intended as a practical guide to how to create business value with web technologies inside the organization.

One of the key issues is the implications of these approaches for the organization and its key functional areas. Not surprisingly, there are a particular set of pressing issues for the IT department. These are covered in the report – we have excerpted Chapter 19 on the implications for IT below.

WHAT ENTERPRISE 2.0 MEANS FOR IT

Enterprise 2.0 has significant implications for the IT function of organizations. It is of course generally the responsibility of the IT function to facilitate the adoption of technologies that create value for the enterprise. However Enterprise 2.0 technologies both have significant cultural aspects to their use and uptake, and can have a significant impact on the underlying business processes and even value creation inside the organization.

Following are the primary issues that need to be understood and addressed, both by the CIO and his or her team, and the senior executive team and board of the organization.

1. Increased user expectations

One of the most important implications of Web 2.0 for organizations is that staff are increasingly exposed to very useful and well designed applications on the open web. The contrast with existing enterprise applications is usually stark.

Younger people in particular often spend considerable time on the Internet, and use tools such as social networks to keep in touch with friends, blogs to broadcast activities and opinions, and free video conferencing to communicate around the world. ‘Baby boomer’ generation staff and executives are either using similar tools or seeing their children use these tools.

One direct result is often the opinion that if these tools are freely available to millions of people, surely it should not be hard to provide basic functionality to the staff of a single organization. Another implication is the desire of staff to use the same or similar tools that they use on the open web inside the enterprise. They have seen and experienced the value, and expect to be able to collaborate as easily as they can in their personal lives.

2. End-users are enabled

End-users of technology are becoming enabled. Part of that is driven by increasing user sophistication, whereby a large proportion of staff have significant understanding of the technologies they are using. While IT can still maintain strict control over applications that are used in the enterprise and websites that are accessed externally, users have a far clearer context for understanding those applications relative to other choices.

In particular the rise of Software as a Service (SaaS) mean that users in operating divisions in a business have the ability to select and use software that is hosted outside the organization, paying the minimal monthly costs on their credit cards.

Perhaps more importantly, the rise of mashups, which enable non-programmers to bring together diverse data and applications, has the potential to dramatically shift the role of the IT department. Many requests that previously sat in a queue of IT department tasks can now be addressed in a self-service mode by end-users. For IT, this could be perceived as a loss in power and scope, however, as described below, also offers the opportunity to evolve into a more strategic role.

3. Heightened requirements for IT security and archiving

An increasingly interdependent economy has increased organizations’ requirements for communication and information flows with customers, suppliers, partners, regulators, and many other external parties. Commensurate with that, the Internet has become central to corporate communications. In the process, companies have had to effectively address the security concerns that arise from external connectivity.

Most organizations now have solid IT security measures in place. However the fact that many mission-critical applications are dependent on external connectivity, and the rise of more diverse Internet-based applications being used in the enterprise, mean that these systems not only need to be secure, but also allow external connectivity.

In addition, regulations on archiving of internal and external corporate communications have increased. As applications proliferate in the enterprise, and communication happens increasingly outside email, this becomes a significant issue for the IT and compliance functions.

4. Shift to role of steward, advisor and facilitator

There is a clear trend to end-users both wanting and being able to implement technology systems for parts of their requirements. Rather than fighting this trend, many IT departments will consume far less of their resources in managing technology, bringing in SaaS solutions, and allowing operating divisions and departments to perform functions that previously required deep expertise.

We are already seeing the IT functions of some organizations change to become primarily stewards of the company’s vision and architecture for information systems, and advisors and facilitators for users to establish and run the systems they require. Clearly there will always be enterprise-wide systems and technologies that are managed centrally. However other aspects will be run independently with the support and guidance of the corporate IT function.

Alongside this shift will be the opportunity for the IT function to play a central role in strategy innovation. Industry structure is increasingly shaped by how web technologies are used, and Enterprise 2.0 illustrates how technology is increasingly interlaced with both corporate culture and the evolution of organizational structure. As such, IT departments can play a key role in facilitating strategy innovation in a number of domains.

5. Potential to reduce IT spending

While the jury is still out, there is the potential in many organizations for the use of web technologies to decrease IT spending. If companies shift to use externally hosted applications, there may be reduced requirements for hardware and other infrastructure, as well as of ongoing software maintenance. If there is a broad shift to “self-service” computing, total IT spending may decrease. This trend is of course supported by continuous pressures on CIOs to reduce their budgets.

6. Changing relationship with other organizational functions

The rise of Enterprise 2.0 and related approaches is accentuating the interdependence of the IT function with other organizational functions, including Human Resources and Organizational Development but also line of business operations. The use and implementation of technology has become deeply enmeshed with corporate culture and organizational structure.

On one level, this requires considerably deeper exchanges and collaboration between these functions than has usually been the case to date. However it also requires the recruitment or development of expertise in organizational issues that have until recently been beyond the purvey of the IT function.

For the most current insights and trends in the living networks, follow @rossdawson on Twitter!

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Ross Dawson is globally recognized as a leading futurist, entrepreneur, keynote speaker, strategy advisor, and bestselling author. He is Founding Chairman of AHT Group, which consists of 3 companies: consulting, publishing, and ventures firm Advanced Human Technologies, future and strategy firm Future Exploration Network, and events company The Insight Exchange.

Ross is author most recently of Getting Results From Crowds, the prescient Living Networks, which anticipated the social network revolution, the Amazon.com bestseller Developing Knowledge-Based Client Relationships, and Implementing Enterprise 2.0. (click on the links for free chapter downloads). He is based in Sydney and San Francisco with his wife jewellery designer Victoria Buckley and two beautiful young daughters.

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