A Texas-based start-up company called
nGenera is unlikely to mean
much to most UK IT directors. But many will have heard about one of
the US technology company's management team - Don Tapscott, the
business guru and co-author of the hit book
Wikinomics, which
examines the economics of working on the next generation of the
web.
nGenera is one of the newest and keenest supporters of web
services technology. Demand for web services has been fuelled by
the rise of Web 2.0 collaboration and interactive media.
Over the past few years some software suppliers have begun to
adapt the principles outlined in Wikinomics and social networking
sites, talking grandly about the "next generation enterprise".
The idea is that companies harness external expertise by
engaging directly with and rewarding participation from their
customers, users and a wide pool of informed contributors. This
method is epitomised by the online encyclopedia Wikipedia, where
entries are written and edited by users. The concept is also
referred to as "crowdsourcing" rather than "outsourcing".
Technology
nGenera's product range, which is accessed over the internet as
Software as a Service, includes software to
help users test "what if" business scenarios and collaborate
online to develop new business ideas. The software is aimed at
large companies which pay a monthly licence fee. Customers
include Royal
Mail, Shell and
British Telecom.
The software is used by managers, employees and customers. Using
blogs and other nGenera software, staff are encouraged to
participate in projects using wiki-type collaboration, while
another nGenera application lets companies chat online with their
customers. There is also software for handling salary, bonus and
incentive compensation schemes.
Analysts believe Software as a Service web services such as
those produced by nGenera have great potential. Web services tend
to be quicker and cheaper to deploy than IT systems developed
in-house and they do not require up-front investment as they can
usually work using the existing IT infrastructure.
Power shift
Analysts talk about how web services like the products from
nGenera can transform the culture of a corporation. The technology
can be used to build relationships between business users and their
IT departments, or between the business and its customers or
suppliers.
Roger Fulton, vice-president distinguished analyst at research
company Gartner, says although some of nGenera's technology does
not seem particularly innovative, it is being used in an innovative
way. The software helps a business keep in closer touch with its
main "stakeholders" - management, staff, recruits, customers,
suppliers, investors - and gets them to suggest and help develop
new IT services.
"Conventional new (IT) development processes start with research
and focus groups that lead to solutions being developed, authorised
and pushed by IT into the business," said Fulton. "In contrast,
nGenera's focus is on creating continuously active communities of
interest to demand useful services."
Fulton said that IT directors would also have to pay attention
to how and where data is stored and how easy it would be to recover
in the event of a crisis.
Web 2.0 concerns
Sceptics have argued that web services technology - and its
free-wheeling approach to developing technology - sounds great. but
could end up in a mess with security flaws and chaotic projects.
Author Andrew Keen has dismissed much of Web 2.0, including
Wikipedia, as the "cult of the amateur".
And amid the credit crunch and economic downturn, are companies
really ready to start something resembling a permanent revolution
in their IT and across their business?
Vuk Trifkovic, senior analyst at research company
Datamonitor, said that
there were compelling reasons for adopting the kind of web services
technology favoured by nGenera.
"Organising enterprises along less formal lines and injecting
the egalitarian spirit of collaborative operations or facilitating
communications through blogs, wikis, forums, social networks,
micro-blogs and other tools is a really good idea. Also, I would
agree that the rules of marketing are being redefined and that one
simply needs to adopt an mixed and open approach and old-style
'shouting' at your customers in hope they will be bludgeoned into
buying what you have to offer does not work anymore."
But he added that the sweeping claims made in nGenera's
marketing might scare off some customers. "My feeling is that they
are probably too evangelical about their approach and that they may
appear too aggressive with the innovative messaging. I have not
seen the tools ... but on the face of it, similar features and
tools are available in different configurations elsewhere."
nGenera has a big-name backer -
Don
Tapscott - and its web services-based technology has impressed
analysts. It has also built up an impressive list of blue-chip
companies in a short time. But amid fears of a recession in the UK
- and inevitable pressure on IT directors to cut costs - nGenera's
technology may well be too new and require too much of a cultural
change for many companies.