Enterprise 2.0

How are Enterprise Systems evolving to serve a broadening audience of stakeholders in an always-on, remote working environment? 

What is Enterprise 2.0? 

Platforms like Amazon and LinkedIn are part of the new era of Digital Ecosystems that companies don’t own, but use. These systems focus on self-service, voluntary data submissions from stakeholders that offer up their own data (and key it in) because it BENEFITS THEM TO DO SO. 

The digital age (sometimes referred to as Web 2.0) is an era of online social communities characterized by user-generated content, ease of use, participatory culture, and interoperability for end users. 

Enterprise 2.0 is a modern term to describe the integration of cloud-based web platforms into an enterprise’s intranet, extranet and business processes. Enterprise 2.0 implementations commonly employ a combination of social software and collaborative technologies like blogs, RSS, social bookmarking, social networking and wikis. 

Enterprise Computing—When the World Was Flat 

During the 1980’s and 1990’s, enterprise computing was characterized by big Enterprise Resource Planning (ERP) planning and Customer Relationship Management (CRM). These two huge and slow-to-change ‘Systems of Record’ took centre stage in enterprise architectures that ‘just assumed’ data would always be entered by employees behind the Firewall. 

While ERP systems evolved from finance and accounting systems as far back as the late 1970’s, in the late 1990’s a clever guy called Thomas Siebel recognised that a book titled ‘The One-to-One Future,’ written by Don Peppers and Martha Rogers, made a lot of sense and built a software platform to make it possible. Peppers and Rogers saw a future where marketing should be drive by forensically understanding the nuances of what matters most to customers, instead of the age old practice of grouping customers into crude segments and treating them like cattle. So-called ‘Customer Relationship Management (CRM)’ systems was born. Siebel software was later purchased by Oracle and wrapped into their ERP platform, making it even bigger and more inflexible than ever before! 

When the author entered the workplace, data was held on a local server behind a firewall. If you were lucky, you had a Local Area Network upon which to share documents and files. Pretty much ALL of the data on the enterprise platform originated from WITHIN the enterprise. This FLAT world powered by the data entry efforts of employees meant that every conversation, transaction and record needed to be ‘keyed in.’ 

The Era of Digital Platforms and Ecosystems 

Amazon and community centric platforms like LinkedIn put paid to the idea that employees are the best people to enter data onto computers. Of all data processing activity, the capture of data typically represents the greater cost. All is well and good then, if you can convince your customers, sales channel partners and suppliers to key data in by themselves. Better still if you can surface the data you need from third party repositories (such as credit check agencies or post office gazetteers that already hold a lot of the data you want to use to enrich your data records). 

Use Amazon as a customer today and you key in your order and delivery details, and you even help them to sort out product returns by choosing your options and filling in the returns record. In the 1990’s all of this would’ve been phoned through to a customer service agent who would have to capture the data on screens. 

Platforms like LinkedIn show how a third party system can grow to become an integral part of the enterprise systems they operate. What started as a way for business people to connect with one another to share thoughts and ideas, LinkedIn has evolved into the world’s largest recruitment platform. Companies today rely on LinkedIn to find the people they need. It has become the recruiting system of choice for the majority of organizations. Similarly, LinkedIn is used by making companies as an integral supportive tool for sales reach-outs ; helping companies operating in a virtual era of business to connect to prospective customers electronically. 

What is the Business Impact of Enterprise 2.0? 

Companies adopting Enterprise 2.0 gain a competitive advantage because they don’t have to: 

• Pay as much for their systems, because many are third party components 
• Benefit from the efforts of others—for example, in the case of LinkedIn, your customers provide richer and more accurate data because it’s self authored 
• Suffer the costs of re-keying of data by employees (arguably one of the biggest economies of Enterprise 2.0) 
• Demand more from enterprise applications platforms that need to harvest and re-use data (because data becomes held in more silos, many of which are operated by third parties) 
• Introduce more data privacy and protection challenges, because it’s no longer possible to protect your business through a perimeter defence such as a firewall.  

Additionally, companies that operate modern Enterprise 2.0 digital platforms are recognized for having better customer experience, more personalized products and service experience, and richer customer and market understanding. These advantages drives directly into bottomline growth results. Research into Digital Leaders, the early adopters of Digital Transformation projects, suggests they gain a 20% net gain in Compound Growth compared to their peers.  

Companies whose dominant business model is ecosystem driver — in both B2B and B2C domains, such as energy management, home ownership, and financial services — experienced revenue growth approximately 27 percentage points higher than the average for their industries, and had profit margins 20 percentage points above the average for their industries, according to our research. Source: MIT CISR 2019 Top Management Team and Transformation Survey 

Another factor in this growth enabler comes from equipping an enterprise to leverage its industry partners. According to BCG research, the average digital ecosystem has 27 partners, and the most successful ones have nearly 40.  

Final Thoughts—The Rise of Enterprise 3.0 

In October 2017, McKinsey & Co. wrote a research paper suggesting that, ‘Management’s next frontier is to make the most of the ecosystem economy.’ We would agree. Digital ecosystems aren’t exclusively an IT topic; they are a business leadership topic because they re-define the Business Model, Economic Engine , and sometimes even the Purpose of a business.  

Believe it or not, Enterprise 2.0 was introduce as a term way back in 2006. Many executives still yet to embrace Enterprise 2.0 will no doubt go weak at the knees when I say industry onlookers predict we’re about to see digital leaders transition to Enterprise 3.0. Technology innovation is moving forward at break-net speed, and all companies are struggling to keep up. 

Enterprise 3.0 is also sometimes described as the Predictive Web. It’s what happens when your computer makes suggestions and finds things for you rather than you having to go looking. We’re already beginning to see the seeds of Enterprise 3.0 in machine-learning and Artificial Intelligence solutions. AI has the potential to learn from patterns of behavior, events and occurrences. It means, instead of a Google search that gets employed every time you are curious about something, your computer of choice sees what’s happening in your life and becomes your ‘digital assistant’ to guide you to the knowledge, products and services you seek. 2021 might just be the year of Enterprise 3.0. 

What does it mean? I’d say, if your business isn’t already on Enterprise 3.0, don’t wait too long, because 3.0 is coming to a competitor near you soon.