Web 2.0technology can fundamentally
change business processes by delivering productivity gains and
making user feedback an integral part of development processes. But
many IT managers are shying away from the technology, unsure of how
it will fit into their business.
A survey of 3,000 executives conducted in January by US
consultancy McKinsey found widespread but cautious interest in
using Web 2.0 technology to enable greater automation and
networking within enterprises.
So far, Web 2.0 has had a greater impact on consumer internet
technology, where related product categories include
social networking,
wikis, social bookmarks, blogs and RSS news feeds. These
technologies use technologies such as Asynchronous Javascript, XML
and
Ajax.
The success of
Google Apps and the entry of many major software suppliers into
the web-based application market - including Microsoft with its
Live platform and
SAP with its hosted AS1 enterprise resource planning tool -
points to the potential for much greater penetration of Web 2.0
technologies into enterprises.
Neil Ward-Dutton, research director at analyst firm Macehiter
Ward-Dutton, said this trend towards using more web-oriented
technologies discloses something far more significant.
"The fundamental shift going on beneath all the talk about Web
2.0 technology is delivering user functionality through a web
browser," he said. "But it is important to separate out whether
enterprises are getting IT functionality over the technologies that
come under the Web 2.0 banner, or whether that functionality comes
through from the internal IT function."
Many companies are already using such technology to deliver
web-enabled front-ends for complex applications. Through this, they
hope to improve end-user productivity or engage customer feedback,
Ward-Dutton said.
"FedEx or UPS, for example, are using the web to offer the same
services that they may already offer over the phone, such as
delivery tracking services," he said.
The trend towards using hosted, or software as a service,
delivery models for delivering functionally rich, web-based
applications also serves as a good indicator of the growing
prevalence of Web 2.0 use in businesses.
Software as a service
Hosted applications rely heavily on the same technologies used
by social networking websites, such as Facebook. Ward-Dutton cited
web-based business networking tool Huddle as an example of
technology that is blurring the distinction between Web 2.0 and
software as a service.
"Huddle is like Microsoft Sharepoint crossed with Basecamp [a
web-based tool to track and manage projects]," Ward-Dutton said.
"Software as a service examples, like Huddle, can offer knowledge
management capabilities across company boundaries, as well as
internally, in a way that is often more cost-effective for small
and medium-sized enterprises in particular, which may not have
large internal IT resources."
In his work with large enterprises, such as the London Stock
Exchange, Dan Norris-Jones, from web-development consultancy
Priocept, has seen the growth in the use of Web 2.0 technologies to
deliver more sophisticated and responsive user interfaces.
This adoption of Web 2.0 technology has been of particular
importance for larger enterprises, which have a lot of data and
complex functionality to integrate across multiple application
sets.
"When the interface was built into the browser, the user
experience was much more limited, and people would resort to
traditional software development using Windows, for example,"
Norris-Jones said. "With so-called Web 2.0 technologies, that is no
longer the case."
He said that his larger clients were definitely using Web 2.0
development techniques as part of their internal IT resource to
improve the usability and sophistication of their end-user and
customer-facing products.
Although Norris-Jones said he could see the benefits and
increasing uptake of Web 2.0 within medium and large enterprises,
he sounded a note of caution to those taking on its concepts for
internal strategic software development projects.
"The one thing Web 2.0 cannot do is offer the same level of
security as traditional server-based software," he said. "As a
result, many clients find that Web 2.0-driven applications cannot
access the file server on the client. They then find they are
forced back into the more traditional Windows environment."
Organisations with a closed, authenticated loop of communication
between themselves and their supplier network do not face the same
difficulty in using Web 2.0, as a level of security is built into
their developer environment.
Suw Charman, a social software consultant, said companies
looking to achieve the functionality of social networking
technology in business applications through traditional
client-based development methods often find themselves bogged down
in administering user rights and permissions. This can create
separated groups of knowledge and information.
"Web 2.0-driven equivalents to Sharepoint, for example, seem
much more lightweight and user friendly, taking up far less
end-user administrative time and maintenance overheads," Charman
said. "However, the opposite of that is that you end up with data
all over the place, which can have disaster-recovery and security
implications."
She said IT managers looking to explore or extend Web 2.0 use -
whether at the front or back end of operations - should carefully
evaluate the strategic requirements for rolling out such
technologies across the enterprise.
"Be aware of the implications of sharing data inside and outside
the firewall, as well as what data is being shared." Charman
said.
"The thing to remember is that the problem with Web 2.0 adoption
is not technical, it is cultural. These tools can make life
simpler, easier and quicker for users. And those companies that are
fully Web 2.0-enabled are going to be in a better position to take
advantage of new technology opportunities and do business better
than the competition."
Case study: Firefly Tonics
Firefly Tonics, which manufactures and sells health drinks
across the UK, Europe and the Far East, adopted Web 2.0 business
development tool Huddle in November 2006 to connect its growing
network of international suppliers with one another and with its
London-based internal team.
Huddle is designed to create a network of online workspaces for
businesses, and is described as a document management system,
virtual meeting room, brainstorming tool, office assistant and
knowledge management tool rolled into one.
Huddle is intended to allow employees to work more productively
in a collaborative virtual environment by freeing them from a
reliance on e-mail. It should also enable better version control
and information flow, accelerating the decision-making process.
Firefly uses Huddle to distribute marketing materials among its
team and supplier base, and keep them up to date with the latest
product news and information. Firefly also wanted to promote an
increased sense of community within the Huddle network by allowing
employees to stay in contact with one another, share information,
plan joint projects and discuss ideas.
Based on feedback from Firefly and its distributors, the Huddle
team released improvements to the system in January, enabling users
to upload zip files of multiple documents in one step, copy files
from one Huddle group to another, and personalise Huddle
invites.
All of these improvements were designed to develop usability and
reduce the time taken to perform routine tasks, which was essential
for Huddle to be taken up within the supplier network.
Firefly has now extended Huddle into its marketing and public
relations agencies, and also uses it to manage key communications
between its raw-ingredient suppliers, packaging designers and
bottlers.
Kate Moore, Firefly's marketing manager, said user satisfaction
with Huddle was high. "We can update our marketing materials
centrally, and our suppliers are automatically notified that files
are waiting for them," she said. "I wish every system we had was
this simple."
Case study: New Look
Clothing retailer New Look said it is saving £700,000 a year
using the P2D web-based trading and document imaging system to
automate its manual invoice authorisation and processing
procedures.
P2D allows businesses to exchange documents with trading
partners and suppliers electronically on a per-transaction basis.
P2D said the system offers all the benefits of traditional
Electronic Data Interchange systems at a fraction of the normal
cost.
The P2D platform acts as an electronic hub that receives
documents as data files from New Look suppliers, or as images of
physical documents from the Kodak i160 scanner that was purchased
at the same time that the P2D service was rolled out.
Data is extracted from the images using rules-based optical and
intelligent character-recognition technology. Supplier invoice
files can be accepted in formats such as CSV, XML and Webform, or
from the accounting packages used by mid-sized companies, such as
Sage, Quickbooks and Pegasus.
With P2D, documents are transmitted directly between New Look
and its suppliers' systems, removing costly and error-prone
data-entry processes. Each transaction is delivered for a fixed
cost of 25p.
Simon Boyne-Manchee, New Look's senior financial systems
analyst, said the cost compared favourably with time-consuming
postal alternatives, and it was cheaper than developing and
maintaining an in-house automated system. He estimated that the
system was saving the company two-thirds of what was previously
being spent on these processes each year.
About 120 of the retailer's suppliers have signed up to the
system since it went live earlier this year, and 300 are expected
to be online within six months, with support for the transition
provided by P2D.
"The P2D system tracks invoices from creation to delivery," said
Boyne-Manchee. "It will scale with us as we grow with new stores
and franchise operations, allowing us to know what our costs are
going to be. We are also getting a lot more data. Manual procedures
just cannot capture all the data."