Web 2.0 More Far Reaching Than ERP and CRM?

I was just reading the latest edition of the McKinsey Quarterly and there’s a very interesting article entitled: “Six Ways to Make Web 2.0 Work.” Surprisingly to me, the author states:
“Web 2.0, the latest wave in corporate technology adoptions, could have a more far-reaching organizational impact than technologies adopted in the 1990s—such as enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management.”

I say surprising because declaring web 2.0 could have a more far-reaching organizational impact than ERP and CRM is amazing indeed. Imagine if you can the billions upon billions of dollars spent over the last few decades implmenting these behemoth systems by companies throughout the world—and Web 2.0 could be bigger? That is an startling endorsement from a pretty traditional source.

And why on earth would McKinsey think such a crazy thing? Because they rightly see “…Web 2.0 as a way of unlocking participation” and “…the underused human potential at companies as an immense ‘cognitive surplus’ and one that could be tapped by participatory tools.” That is exactly right, as I have (often) said before—all that corporate IP locked in the heads of people throughout every organization with no good way to access it and leverage it for wide-scale productivity improvement.

Not surprising is their finding that as many companies are unhappy with their web 2.0 experimental implementations as are happy. “Many of the dissenters cite impediments such as organizational structure, the inability of managers to understand the new levers of change, and a lack of understanding about how value is created using Web 2.0 tools.” In response, McKinsey outlines six "management imperatives for unlocking participation"--which are certainly all true, but are disappointingly uninsightful or at least mundane. Besides these six, as we will see in the next post, is the unmentioned and most critical imperative--and the one that underlies successful Collaborative Knowledge Sharing.

Social Tagging Saves IBM $4.6 Million

I read a blog post on IBM developerWorks about how social tagging saved the company $millions. As background:

"The Enterprise Tagging Service in IBM aims to provide an alternative approach to helping people find information compared to traditional search engines... Social tagging allows people to add human semantics to keywords that they define that sometimes can amount to finding a resource faster based on what people think is relevant...IBM’s ETS cost $700k to develop and deploy across the worldwide intranet as a sidebar to a number of key web properties... Readers can tag any page with the widget, look up tags they contributed, find others who have used the same tag, and certainly find other relevant resources by that same tag."

And here's the best part:
"The ETS team instituted a survey to ask users how this tool helped them. What they found was amazing when you look at it in context: the average person saved 12 seconds, across the 286000+ searches performed through ETS each week. This sums up to 955 hours saved each week across the company. In terms of cost savings, it amounts to a rough estimate of $4.6 million a year, in terms of productivity gain."

It's great to see companies like IBM adopt tagging and other social media approaches to increase productivity--it shows that there is indeed hope that the enterprise will catch on! But, what is surprising is that they are so pleased with a 12 second improvement in searching--since the problem and opportunity is so much bigger than that. Remember from previous posts in this blog:

“IDC research indicates that knowledge workers spend 15-30% of their time seeking specific information and these searches are successful less than 50% of the time. For the Fortune 500, the cost of the fruitless searches represents between $60 and $85 billion in direct costs and twice that in opportunity costs.”

If we assume 20% as the average time people spend looking for info, that equates to one entire work day per week, or a whopping 10 weeks per person per year. That single 8-hour day multiplies out to 28,800 seconds per day, compared to the 12 seconds saved per search. If we assume that people on average make 20 searches today (I'm making this up, but it seems reasonable), each person would save a total of 4 entire minutes per day, or 20 minutes per week--which is 4.2% of the total time searching! I'm all for social tagging and I agree we should all include it in our arsenal--but it is clearly a very weak weapon to help us win the productivity war.

But, imagine if you could search knowledge down to the spoken word, access it at the exact point of interest, and have it all available in your favorite digital media formats (streaming, downloadable, mobile). And then imagine, after finding a knowledge nugget of interest, you could find the expert/author, see all of that person's work, ask the person a salient question, follow the person's future contributions, and be able to find, join and participate in the same communities of interest! Now that is a huge improvement--and that is the power of Collaborative Knoweldge Sharing.

The New Learning Interactivity

Just in from our friends at learning research firm, Bersin & Associates is a blog post about eLearning becoming less interactive and more expert centric. I quote in part:

"A recent study, The Corporate Learning Factbook, showed that, with spending and staffing on the decline, today’s training organizations are developing courseware that is less interactive. Instead, more companies are now using "rapid e-learning" tools, software that converts PowerPoint documents to online learning materials. Rapid e-learning tools allow content to be created relatively quickly and easily (and cheaply), and also put power into the hands of SMEs to develop their own training and communications. Over the past several years, these tools have been an entry point for many organizations in adopting online training. Today, more organizations are turning to these tools due to resource constraints."

Yes, as we've been saying here at Altus Learning Systems for years (way before this economic meltdown!), the transfer of knowledge within organizations must become disintermediated--coming directly from experts to learners. But what is missing in the blog post's focus on "interactivity" is findability and accessibility--busy people care less about interacting with their learning maerials than they do about finding what they need to know quickly and being able to do directly to the point of interest. And the type of interactivity that people DO want to engage in is different than eLearning learning exercises--they want to be able to rate, comment, ask questions, find the expert, add their own user generated content, form communities of interest, etc. This is the new intereactivity that has been born out of people's experiences with web 2.0 and social networking.

The Info Technology Revolution Has Failed Us

The jury is finally back and the verdict is not what anyone wants to hear—the information technology revolution has failed us. After spending untold $billions over the last two decades on computer hardware and software, knowledge workers today still spend 15-30% of their time looking for the information they need to do their work—and find what they are looking for less than half the time! Who could have possibly imagined at the end of the first decade of the 21st century that individuals would still be spending 10 weeks or more per year looking for the information they need at work and still not be able to find it? And this dismal result after installing an endless number of three-letter acronym systems: ERP, CRM, CMS, DAM, DMS, LMS, etc., etc.—not to mention the explosive adoption of the Internet, Google, and countless other tools for creating and finding enterprise content.

I’m told the definition of insanity is continuing to do the same thing over and over again and expecting different results. How many more $billions do we need to spend over how many more decades to realize something is seriously amiss here? When are we going to understand that a change in thinking and approach is needed to address the single biggest productivity challenge organizations face? Fortunately, the convergence of video, search, web 2.0 and social networking has resulted in the emergence of a trend that that is overcoming the limitations of traditional approaches and is reducing this enterprise productivity gap for a number for global companies—Collaborative Knowledge Sharing.

Biggest Threats to the Meetings Industry

I’m very focused right now on the corporate meeting/conference/event space because cutbacks in travel are forcing companies to rethink how they transfer knowledge—and the movement from in-person to “virtual,” or more likely a hybrid in-person/virtual approach is inevitable (as discussed in earlier posts). And that is bringing my company many new inquiries from existing customer and prospects.

That interest has prompeted me to subscribe to meeting industry publications like Meetings to see what the folks in that business are thinking. The February 2009 issue had a very interesting lead story, “2009 Meetings Market Trends Survey.” One of the questions that was asked was: “What do you think is the biggest threat to the meetings industry?” The top responses were predictable: the economy (62%) and airline issues (18%). But, curiously, one of the possible threat answers was “virtual meetings,” and it only received a 5% response from corporate responders to the survey.

The data are not explained, so it made me wonder whether meetings professionals simply do not think they will be impacted by the inevitable movement to virtual (online) or they recognize the trend but are not threatened by it because they actually see it as a useful tool. Unfortunately, I suspect the former—that they don’t see the relationship of “the economy” and “airline issues” to the fact that meetings of the future are going to have to include an online component due to the reduction in corporate travel.

The other thing I thought was curious about including “virtual meetings” as a response option was that the author of the survey actually thinks in those terms—that virtual/online is a threat vs. seeing it as a valuable and complementary tool. I understand that the folks who actually run the conference centers, hotels, and related services will be negatively impacted by the loss of in-person attendance, but meeting planners should be focused how to provide the most robust experience for both online and in-person attendees. That will include live and on-demand delivery of the conference content combined with a lively integration of social networking capabilities. And even conference center managers should be thinking about how they can get into the online game by offering those capabilities to supplement in-person events held at their facilities.

Priority: Improving Sales Rep Access to Info

A recent study by CSO Insights, “Sales Performance Optimization, 2008 Survey Results & Analysis,” contains a treasure trove of information about improving sales, ranging from lead generation methods to the trends and issues with CRM systems. I found one table in that report particularly interesting and germane to what we do at Altus Learning Systems. When respondents were asked to state what their top priorities for sales improvement were for the coming year, the top mentioned item was not hard to predict: “enhancing lead generations programs,” with 36.4%. But what was less predictable and more interesting was the second most mentioned priority: “improving sales rep access to key information.” With 30.4%, information access ranked much more highly that some of the more usual suspects, like “revising our channel strategy” with only 18.6% and “implementing CRM tools” with 16.9%.

Reflecting on a the statistic from a previous blog post, I guess this finding should not be so surprising—when 15-30% of knowledge workers’ time is spent looking for the information they need to do their work, and they find it less than 50% of the time, this is a very large problem indeed. Few productivity problems rise to this level of magnitude and urgency—at least 10 weeks per year per sales person looking for the information they need and finding it less than half the time—you do the math for your company.

That is precisely why we at Altus Learning Systems have focused with laser-like precision on collaborative knowledge sharing—enabling people throughout the extended enterprise to share what they know and making it all searchable and accessible at the point of interest. And that is why we are fortunately seeing more and more companies making the transition for a reliance on formal eLearning (online training) to collaborative knowledge sharing with Altus—because people need easy access to whatever they need to know, whenever they need to know it, from whoever in the organization has it, on whatever electronic device they are using. Notice that “improving formal training for sales reps” was not on the priorities list, but “improving rep access to key information” ranked second.

Virtual, Not Virtual Worlds

The natural inclination people have when applying a new technology to an old problem is to try to recreate or simulate the old experience. We certainly saw this years ago with the application of internetworking technologies to learning—the result was 'eLearning.' Because people previously had to attend 'training courses' in-person, eLearning tried to simulate that experience by creating online courses, making people register for those courses in learning management systems, taking tests, etc. That was all fine and dandy—but the much larger opportunity was and is that the web (and more recently web 2.0) unleashes the ability of people throughout the extended enterprise to collaboratively share their knowledge. The uber opportunity that the modern web opens up for learning is to enable everyone to have access to whatever anyone else knows, whenever and however they need to know it (what we at Altus call Collaborative Knowledge Sharing)—not simply to take training courses online.

This same 'paradigm transfer' problem is happening with corporate meetings, events, and conferences. The current economic downturn has forced companies to drastically reduce their costs, and the first thing to go has been travel—specifically, travel for internal meetings and attendance at in-person trainings and conferences. Since the no-travel mandate limits in-person attendance, companies are naturally thinking that they should conduct these meetings, conferences, and trainings 'virtually.' But that’s where the technology train jumps off the tracks—instead of simply thinking that such meetings need to be online vs. in-person, they leap to the conclusion that virtual means virtual worlds. If people can’t be present in person, the reasoning goes, then we need to simulate the in-person experience online via a virtual world environment. This leads to the thinking that participants have to represent their presence in the online meeting with an avatar and move through the conference center to find the room in which an interesting presentation is taking place, find a seat, sit down, and look at the screen in the 'auditorium.'

The tendency to leap to the virtual world conclusion, although natural, is mistaken. The reason that people have to physically move around in an in-person meeting is because they have to transport their physical bodies. But, when online we can go from one presentation to another presentation with two licks of the mouse—so, why recreate the most unpleasant aspects of in-person meetings online when we are completely free of that physical imperative?

The illogic of transferring the physical presence paradigm to the online experience is that hundreds of millions of people already watch video and network socially with each other every day online—and they don’t use avatars to do it. Think Facebook, Flickr, LinkedIn, Twitter, etc. ad finitum—none of the most popular social media tools in use today use virtual world technology, so why would we want to impose that awkward paradigm on business people who are attending knowledge sharing events online? Why not stream video like YouTube (live and on demand) and let people interact with the existing tools that they are already familiar with (without having to create yet one more personal profile)?

While companies are working furiously with virtual world vendors to try to simulate the physical meeting experience online, the real game-changing strategy will be to create a seamless environment for people who want to see video live and on demand, interact with each other using familiar tools, and collaboratively share their knowledge by taking full advantage of what today’s technologies are fully capable of. That’s why God invented mashups—take the best of the best applications, mash them with up as web services, and apply them in ways that truly enhance the user experience. Making my avatar go up and down the escalators to get to presentations held on different floors of the virtual Moscone Center is not the way to enhance my learning and networking experience.

From F2F to On-Line Conferences

As mentioned in an earlier post, and consistent with the theme that is emerging here, the down economy is forcing companies to make significant changes in order to reduce costs. Travel was the first expense category to be axed—and when travel gets cut, other changes are sure to quickly follow. One change that has recently been hastened is the shift from face-to-face (F2F) attendance at business meetings and industry conferences to on-line participation.

A recent industry survey of over 1,000 corporate managers found the following expectations about F2F meetings for 2009:

• 42% expect participation in physical trade shows to be down by as much as 50%
• 64% expect to have fewer physical sales kick off seminars - or none at all
• 60% expect training, management and other internal events to be down 20 - 50%.

As a result, over half said their companies had already begun conducting events on line and a significant portion of the rest said they were planning to do so to supplement their physical events in 2009.

In terms the downsides of substituting on-line for F2F meetings and conferences:

• 61% said they would miss seeing people in person
• 36% said they would miss enjoying the social activities
• And only 20% said they would miss seeing speakers in person.

Cost cutting aside people mentioned several aspects of virtual participation to be particularly appealing:

• 75% appreciated that there is no travel required
• 64% liked that they can attend the on-demand sessions on whenever convenient
• 58% found it useful to be able to "forward" to their colleagues on-demand sessions that they thought would be of interest to them.

Again, difficult times precipitate difficult decisions, but often those decisions actually exemplify needed changes to the underlying assumptions about how people and companies learn and work. In this case, the “no travel rule” is forcing companies to question the need for F2F participation in meetings.

This survey completely corroborates what we have heard and seen at Altus Learning Systems from our enterprise customers. And that is why they are turning more and more to Altus for live webcasting, searchable on-demand video, and on-line interactivity to supplement or replace F2F participation.