"For me, Enterprise 2.0 is best thought of as a set of technologies, not as a business philosophy. In fact, I am of the mind that if you approach Enterprise 2.0 as a business philosophy — or even worse, as a new philosophy — most likely you will be led astray."

Grand Disruption

Enterprise 2.0 is disruptive social technology. It introduces the alien logic of self-organizing, bottom-up, distributed peer production into the belly of that hierarchical beast known as the corporation.

Same Old, Same Old

Enterprise 2.0 will become merely a cost of doing business. Early adopters will gain, at best, a short-term competitive advantage.

Opening Statement

Enterprise 2.0 (E 2.0), perhaps even more so than Web 2.0, is one of those big topics we in IT see every few years or so that provokes plenty of discussion and debate. At the heart of this debate lie a few assumptions that seem to create tension. Proponents and detractors often argue from opposite sides of these assumptions without a more rigorous examination of them.

The first of these assumptions is definitional. Is E 2.0 a set of technologies or is it a business philosophy? If you read the industry rags, the collection of concepts that make up E 2.0 seem to hail from both of these paradigms. Consider the following set of E 2.0 terms: wikis, blogs, RSS filters, folksonomies, mashups, crowdsourcing, social networks, virtual worlds, the long tail, democratization of the tools of production, and video file sharing. Which terms would you define as being technical and which philosophical?

The second assumption is about how malleable one believes human nature to be. Does E 2.0 cause human behavior to change, or does human behavior shape what we call E 2.0?

The third assumption is strategic. Is business and IT strategy (and E 2.0's impact on it) best considered as an external market positioning exercise or as an understanding of internal resources and capacities that can differentiate and favor the firm?

The fourth and last of these assumptions is probably the most contentious. Is E 2.0 really new? For those who have been around a bit longer, some of the current discussions sound like old wine in new skins. Proponents, however, claim that there is something new to E 2.0.

In this issue of Cutter IT Journal, each of our author's contributions, mine included, is colored by assumptions. Examining these basic assumptions will help you, the reader, separate the wheat from the chaff.

E 2.0: TECHNOLOGIES VERSUS BUSINESS PHILOSOPHY

For me, E 2.0 is best thought of as a set of technologies, not as a business philosophy. In fact, I am of the mind that if you approach E 2.0 as a business philosophy -- or even worse, as a new philosophy -- most likely you will be led astray. Not all our authors agree with me on this point. While all of them do concede that E 2.0 technologies are valuable in some ways, they diverge on whether the business philosophies implied or explicit within E 2.0 are helpful.

P2P pioneer Michel Bauwens asserts that a successful E 2.0 company will need to create an "efficient and open sharing culture" so that it can adapt to the demands for collaboration and participation from those outside the company. In describing 3D collaboration environments, such as those found in massive multi-player online role-paying games (MMORPGs), David Coleman stresses the need to include these tools as part of E 2.0 so that firms can attract young talent. In this regard, E 2.0's promise is fulfilled by embracing a new business philosophy.

Conversely, in his article on E 2.0 and sustained competitive advantage, Mark Choate says that he is "always cautious when I hear pundits proclaim that some new technology has changed all the rules." He applies the resource-based view (RBV) competitive advantage framework to the E 2.0 landscape and concludes that not only have the fundamental rules of business not changed, but that the old rules work nicely for both describing and capitalizing on E 2.0.

Charles Bess takes a more decidedly technical perspective in his article on the attributes of the next-generation enterprise. He doesn't deny the business benefits of E 2.0, but he says the pundits have defined E 2.0 imperfectly. In his view, the next-generation enterprise will, among other things, embrace a model-driven approach to business, develop a robust set of "edge" capabilities, take a value-enabling approach to security, and leverage intelligent computing solutions. While most of these activities are diametrically opposed to the current technology-based definition of E 2.0, they are largely technical concepts, not business philosophies.

In their definitional piece on the similarities and differences between Web and Enterprise 2.0, George Taskasaplidis and Charalampos Patrikakis point out the confusion surrounding E 2.0, but in the end, they also define E 2.0 as a set of technologies.

CHICKEN OR THE EGG?

Which comes first, the change in technology or the change in human behavior? Taskasaplidis and Patrikakis briefly touch upon the definition of E 2.0 offered by Andrew McAfee of the Harvard Business School, which states that E 2.0 is the use of emergent social software platforms within or between companies. Using this definition, the authors suggest that E 2.0 treats companies as flat rather than hierarchical organizations. While they don't strongly suggest that E 2.0 will succeed in flattening organizations, other writers in various places do just that.

Bauwens steps firmly into the "E 2.0 drives social change" camp. He claims that E 2.0 allows the "unprecedented emergence of nonlocal, self-organized collaboration through bottom-up dynamics." He goes on to conclude that E 2.0 is "not just a set of innocent technologies that allow for more efficiency.... Instead, [it] introduces the alien logic of self-organized, bottom-up, `distributed' peer production in the belly of the hierarchical beast." Wow.

Choate seems to take the opposite stance. Using wikis as an example, he argues that they do not make collaboration possible; they merely improve the efficiency of the communication. In perhaps a somewhat unknowing but ultimately ironic indictment of E 2.0, Choate points out that firms like Google, which have capitalized on Web 2.0, are not embracing the new philosophies of openness and collaboration to make their money. Their core architectures and, more importantly, core knowledge are closed. While the users on the Net may have altered their behavior as a result of Web 2.0, Google's behavior as a company is very much the same as that of companies before this business "revolution."

In his optimistic look at 3D collaboration tools, Coleman suggests that these tools are a safe way to learn by experience many of the skills needed by corporate leaders. Far from arguing that the tools can change social behavior, he points out they may improve social behavior as currently defined.

STRATEGIC IMPACT: DIRECT OR INDIRECT?

Can E 2.0 make a strategic impact directly, à la Michael Porter's framework, by helping a firm position itself in the market relative to competitors and altering competitive forces? Or does E 2.0 make a strategic impact more indirectly by enhancing a firm's know-how or capabilities, thus enabling it to create a sustainable competitive advantage by building up an internal competency that is hard for competitors to borrow or steal?

Let's see where our authors seem to come down on this issue. Choate is easily pegged, as he invokes the RBV school of strategy by name. This school is the latter perspective. Bess sidesteps the issue entirely; but in his technology-centric redefinition of E 2.0, he argues that a boundary-less organization is a requirement for the future. From this, I will go out on a limb and suggest that Bess does not believe that his definition of E 2.0 will directly alter the strategic landscape. If all firms fulfill this requirement, then no firm will be distinguished by it.

Taskasaplidis and Patrikakis open their piece by discussing the added value that know-how provides firms. From there they describe E 2.0 in terms of knowledge management and as a means for gaining competitive advantage by creating a more flexible and responsive firm. This, too, is close to the RBV school of strategy.

In describing E 2.0 as a "Trojan horse, as it brings with it the underlying social values inherent in its design," Bauwens points out that the bottom-up pressure for more participation requires significant social change within firms. Moreover, in the battle between firms that do this and those that don't, the E 2.0-savvy firms should win. This clearly suggests to me that technology-induced market positioning isn't the means by which E 2.0 benefits are reaped. Rather it is through mastery of the new social arrangement. I would have to place Bauwens closer to the RBV camp than the Porter camp. While Coleman doesn't delve deeply into the strategic consequences of 3D collaboration technologies, he suggests that this class of tools improves employee skills and abilities. Sounds like something closer to RBV than Porter to me. The technology indirectly, rather than directly, affects strategy.

YOUNG GUNS VERSUS OLD FOGEYS

The last of these assumptions is the easiest and most fun to deal with. This is where you see what our authors truly believe. Bess thinks E 2.0 is defined incorrectly and that "older" (my term) concepts of simulation, model-based approaches, a robust edge, improved security, design of intelligent systems, and support for collaboration are a better way to look at things. Choate prefers to use the older RBV school of strategy to explain E 2.0 and devotes a fair amount of time critiquing portions of what E 2.0 proponents McAfee and Don Tapscott discuss.

Bauwens is decidedly different. He asserts that E 2.0 is "nothing less than a revolution in the way we organize work and value creation." For his part, Coleman nicely describes the benefits of cool 3D collaboration tools. Taskasaplidis and Patrikakis acknowledge the newness of E 2.0 technologies and, while detached in defining E 2.0, positively acknowledge that these technologies seem to be the way for competitive advantage.

THE FINAL WORD

Where do I stand with regard to E 2.0 and these four assumptions? In my opinion, E 2.0 is best defined as a set of technologies, not a new business philosophy. The different perspectives on strategy are rich enough to describe strategic advantage and aren't advanced with technologists' irrational exuberance over the "new new thing." By and large, human culture and human behavior define technology, not the other way around. E 2.0 has been fueled by ancient and unchanging human desires. All this talk about a social revolution is nonsense. Peer-to-peer collaboration and protection in a strong hierarchy are both basic human needs, and E 2.0 will need to respect both social behaviors. If anything, E 2.0 will be useful for reinforcing or accelerating the range of human behaviors, including those grounded in hierarchy. What is good for the goose (those at the edge without the power) is good for the gander (those at the center with the power).

With regard to how E 2.0 confers advantage, I fall in line with the RBV perspective, as I believe E 2.0 is chiefly about how knowledge flows across human cultures. E 2.0 will make a strategic impact where it lets one firm's teams learn faster in ways that another firm's teams can't seem to do. E 2.0 will accelerate capability development and will be a needed, but minority, portion of that capability's contribution to that firm's sustainable advantage. Over time, other firms will learn the tricks of E 2.0, and the competitive advantage will dissipate or fold into more traditional forms of advantage. Finally, while E 2.0 in its final form is a new set of technologies, the roots of these technologies sprouted long before the Internet or Web 2.0 hit the scene. E 2.0 is partially new and highly indebted to that which came before.

But enough of my babbling. It is more important for you to read what our authors have to say on E 2.0 and doubly important for you to figure out where you, and your firm, stand in this debate.

ABOUT THE AUTHOR