This is post sponsored by the Enterprise CIO Forum and HP.

As I’ve written about in my last two books, technology choice has exploded. In the mid-1990s, organizations had relatively few choices compared to today with respect to purchasing and deploying enterprise systems. To be sure, technically speaking, cloud computing existed. However, it was not widely used for a number of reasons:

• Broadband was not the exception, not the rule. As such, it was much more expensive.
• Storage was still costly. You could not easily make large files available. That’s why AOL sent you those free CDs.
• The Internet had not yet reached critical mass.

Add these all up and it should be no surprise that software vendors offering cloud-based solutions were few and far between. On-premise software vendors such as SAP, Oracle, PeopleSoft, and their ilk sold large ERP and CRM packages to organizations that finally realized that their legacy mainframe applications were quickly outliving their usefulness.

Options Abound

Fast forward to today. Yes, large organizations can still buy expensive enterprise systems and host them internally. However, for two reasons, this is becoming the exception rather than the rule. For one, consider the simple math: most big companies years ago implemented these types of systems. Today, there just aren’t too many hospitals or Fortune 500 companies that continue to run homegrown inventory, payroll, and accounting systems off of old mainframes. (Of course, whether these organizations’ current systems meet changing business needs and evolving regulatory requirements is another matter entirely.)

Second, even large organizations in need of major systems’ overhauls are unlikely to purchase traditional on-premise software–and run it internally. Broadband is now pervasive, storage is cheap, and many vendors embrace cloud computing and the freemium model.

Brass tacks: In recent years, the number of technology alternatives for companies of all sizes has grown exponentially. Through Software as a Service (SaaS), organizations can transform traditional capital expenditures (read: massive software purchases) into much more digestible operational expenditures. For example, a former $1M USD purchase (plus consulting services and annual support) may become a $20,000 monthly expense–based upon transactions or licenses.

Generally speaking, the math here makes SaaS and cloud-based applications a no-brainer. It doesn’t take an MBA to realize that a controllable monthly expenses give organizations much more flexibility in any economy, much less one still reeling from the burst of the real estate bubble.

Jean-Michel Bérard makes this point in “SaaS brings big-company efficiency to document delivery“, Bérard writes:

SaaS shifts the expense of the solution from capital to operational, clearing away the barrier of acquisition and deployment cost, and there is no software or hardware to maintain. Small and medium-sized businesses (SMBs) can significantly shorten transaction cycles, increase productivity, reduce Days Sales Outstanding (DSO) rates, increase visibility and process control while focusing resources on core competencies and customer service rather than supporting technology.

Bérard is absolutely right, though I’d add that SMBs are far from the only types of companies thatbenefit from shorter development cycles. Particularly when the adopt agile methods, large organizations can realize significant benefits from SaaS as well.

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This is post sponsored by the Enterprise CIO Forum and HP.

In my last post, I discussed modernizing applications by virtue of embracing cloud computing. Today, I’m going to take a step back and focus less on specific technologies are more on arguably the most important concept of Enterprise 2.0: collaboration.

Consideration 2: Are you suffering from the “Project” mentality?

Going back to mid-1990s, most large organizations procured software very formally through formal RFP processes. Because of the lack of broadband, you couldn’t easily download applications for internal use. IT was also more effective in serving as the gatekeeper.

Well, things have changed.

In Empowered workers: IT should embrace them, John Dodge writes:

IT the organization isn’t the sole arbiter anymore of who gets the information technology they need to do their jobs. In many cases, IT the organization is being reluctantly dragged into the era of empowerment where workers get information technology on their own.

That is, there has been a fundamental power shift in many progressive organizations–and even those that are swimming against the stream. Employees can and will use tools “under the radar” when IT refuses to provide useful, sanctioned tools. Web-based applications like Yammer are often adopted in organic and bottom-up fashions, whether or not the CIO likes it or not.

Lamentably, many large organizations are still mired in the late 1990s. They refuse to give employees powerful tools to facilitate meaningful collaboration, of which there are many. Their idea of collaboration for project management (PM)? You guessed it. Good old Microsoft Project, a bulky tool that isn’t on anyone’s list of the best collaborative applications.

Alternatives

I could go in a million directions here. Consider GTDAgenda, a web-based collaboration and PM tool. Then there’s BaseCamp, a similar tool that can be deployed sans proper “installations” and server configurations. Translation: they can be used immediately . More than a few employees of large companies have told me that they have utilized tools like these precisely because their own organizations were unwilling or unable to provide them in a timely manner.

Were these employees disobeying their bosses?

Hardly. Their bosses actually approved of it. “Get the job done” trumped “Don’t do it, but blame IT after you miss your deadline.”

Simon Says

No one is advocating anarchy here. Clearly, enterprise risk substantially increases when everyone is doing his or her own thing. By the same token, however, it’s important to realize that substance trumps style. If IT does not meet its end users’ needs, it should be prepared for the consequences. The consumerization of IT means that employees are increasingly tech-savvy, especially younger ones. The organization that ignores this does so at its own peril.

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This is post sponsored by the Enterprise CIO Forum and HP.

This is post sponsored by the Enterprise CIO Forum and HP.

So, you’ve been reading all about emerging enterprise technologies. Maybe your organization has already modernized its applications, as many recently claim. You even went to a conference in which Enterprise 2.0 was all the rage. Your competition claims to be throwing all of its data and systems into the cloud. In this series of posts, I’ll discuss considerations for organizations that are beging to move beyond:

• traditional client-server architecture
• antiquated “intranets”
• long-term vendor contracts and expensive annual support agreements

Consideration 1: Do your new technologies add, replace, or subtract from existing ones?

While the economy appears to be improving, we’re not out of the woods. Translation from a technology standpoint: any new initiative more than likely has come with a built-in cost justification.

Many organizations make a fundamental mistake when going in new technology directions: they tack additional applications and infrastructure on to existing ones. As a result, savings that look so promising during the RFP process never materializes.

Consider one of my clients. Emboldened by the promise of lower IT costs, near-constant access to data, and the desire to be doing something cutting edge, it began several cloud computing initiatives. The organization was far too big and complicated to do everything at once–without causing chaos. As a result, it started small with phased approach, cutting over a few applications at a time.

Fast forward to the end of the year. As IT looked at its budget for 2011, those supposed savings from cloud computing appeared to be missing for one simple reason: total IT costs in 2010 exceeded those in 2009. Why? Enabling certain applications in the cloud by working with new vendors and technologies were not line items on balance sheets in 2009. In effect, cloud-based applications just “added to” total IT costs and the CIO was mistakenly left with the impression that the savings for this exciting new technology were smoke and mirrors. The CIO put the kibosh on 2011 cloud computing endeavors.

Simon Says

Have a long-term plan when embracing any new technology. Rarely will savings be dramatic in one year at a large organization tied to long-term vendor contracts and ways of doing things. (Note, however, that “big bang” savings may in fact be difficult to achieve based upon company size.  For example, many smaller companies can more easily embrace emerging technologies for a wide variety of reasons. In fact, I detail one such company–a law firm–in my new book, The New Small.)

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This is post sponsored by the Enterprise CIO Forum and HP.

What can team managers in big companies learn from small businesses? Quite a bit actually. I recently wrote a guest post for Wayne Turmel’s bnet column. Here’s an excerpt:

Phil, what’s the difference between how small businesses approach technology (especially collaboration tools) and the traditional enterprise approach?

In a nutshell, small businesses (SBs) tend to experiment more. They’ll try out a tool like Yammer, for example, on an individual basis. If it catches on, it will be adopted throughout the company. It’s less “top-down” than the traditional enterprise approach. What’s more, if something else comes along that offers superior functionality, SBs will experiment with that tool as well, utilizing what’s best from each. There’s no corporate edict that “all people must use X” even though X doesn’t have key functionality.

To read the rest of the post, click here.

Andrew McAfee started an interesting discussion recently with his post Drop the Pilot. McAfee makes no bones about the fact that he isn’t a big fan of pilots for Enterprise 2.0 projects. Both in the comments and in subsequent posts by people like Phil Green, many have weighed in with their thoughts on these type of pilot projects. It’s high time for me to chime in.

My Definition of Enterprise 2.0

Before continuing, a definition is in order. I don’t define E2.0 in the same way that McAfee does in his eponymous book or on his blog. McAfee’s definition largely focuses on collaboration and social software in the enterprise. I go a bit further.

In The Next Wave of Technologies, I define Enterprise 2.0 a bit more broadly to include emerging technologies such as SOA, MDM, SaaS, clouds, BI, social networking, open source, and others. From my book’s first chapter:

Simon Says: Context Matters

As for the pros and cons of pilots, I understand both sides of the argument. Consider two extremes:

• Company X: A large and overly complex organization with a terrible history of managing IT projects, a dysfunctional culture, non-existent data governance, and other undesirable attributes.
• Company Y: A nimble startup with few hurdles, relatively good data, and a successful history of agile software development.

How can one credibly make the claim that Company X should undertake even a small Enterprise 2.0 pilot? Let’s say that Company X wanted to move their apps and data over to the cloud. They would just be adding further complexity to their existing architecture. On the other hand, Company Y can probably jump in with both feet.

These are two extremes and obviously most organizations and IT projects will fall in between them. Industry, type of application, organizational culture, risks, rewards, and other factors need to be considered before undertaking a pilot project. I hate to sound like a traditional consultant, but it depends on many variables. To me, an unequivocal stance makes little sense.

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Photo from Simon Arramore.

Serendipity is an interesting thing. I had just hit the “publish” button on my recent post Tell me a Story, a quasi-rant that underscores (at least for me) the need to draw readers in via compelling stories and anecdotes. Needing some time away from the screen, I picked up my copy of Everything is Miscellaneous by David Weinberger. I had heard good things about it and was searching for a good read.

I wasn’t disappointed.

Printing Supplies

Everything Is Miscellaneous starts out with the great story of how Staples stores are arranged. To paraphrase Renee Zellwegger’s character in Jerry MacGuire, this book had me at “Staples.”

Why are printer cartridges and cables in more than one place? Because not everyone walks into the store to buy printer cartridges and cables for precisely the same reason.

• Some people already own printers and cartridge refills. They will look for cartridges in a dedicated section and it would never occur to most of them to go to printers.
• Some people need to buy new printers; it’s easier for them to stay in that section and get everything they need at once. They don’t want to go to another section of the store. Nor do they want to return to the store and feel stupid for not remembering that printers don’t come with everything needed to print documents from their computer.

And that’s the whole point of the book: different people find similar things in different ways and for vastly different reasons. Everything is rife with great anecdotes and case studies supporting the author’s central thesis. Hamlet, Flickr, and Wikipedia are just a few of the examples manifesting the importance of shared knowledge and more efficient ways of searching the vast streams of information today.

Beautiful Trees and The Third Order of Order

Physical stores like Staples are constrained by where they place  items. This is not the case with the web. Weinberger writes:

“In the third order of order, a leaf can hang on many branches, it can hang on different branches for different people, and it can change branches for the same person if she decides to look at the subject differently. It’s not that our knowledge of the world is taking some shape other than a tree or becoming some impossible-to-envision four-dimensional tree. In the third order of order, knowledge doesn’t have a shape. There are just too many useful, powerful, and beautiful ways to make sense of our world.”

From a technology standpoint, this can only happen online with pervasive and accurate tagging and metadata.

Polarizing Topic?

For me, the timing of reading this book (although released in 2007) could not have been better. Lately, I’ve been reading, writing, thinking, talking, and learning a great deal about the semantic web. Everything enhanced my knowledge of the topic, although it’s not formally mentioned until page 190 or so.

Evidently, not everyone shares my viewpoint on the book nor on the importance of the semantic web. I saw the one star reviews for the book on Amazon. To me, it’s evident that some people refuse to see how internet is changing things–and will continue to do so.

Everything Is Miscellaneous is an important book for not understanding what’s going on now, but what’s going to happen with the web as it “goes semantic.” I blew through this book in two days, unable to put it down. Great read.

As I write this, I am nearly finished with the best and most challenging book that I have read in years. The book is Pull: The Power of the Semantic Web to Transform Your Business by David Siegel. I couldn’t wait to finish it before posting about it.

What is the semantic web?

You may not be familiar with the semantic web. Six months ago, I sure wasn’t. So let’s get the definition out of the way. According to Wikipedia, it is

an evolving development of the World Wide Web in which the meaning (semantics) of information and services on the web is defined, making it possible for the web to “understand” and satisfy the requests of people and machines to use the web content.^[1][2] It derives from World Wide Web Consortium director Sir Tim Berners-Lee‘s vision of the Web as a universal medium for data, information, and knowledge exchange.

Some have referred to the semantic web as Web 3.0.

While perhaps a decade away by some estimates, such as a recent report by Pew Research, thousands of people are working right now on making it a reality.

Examples

The industries and examples covered in Siegel’s book run the gamut. Relatively recent ones such as search will be transformed, as will more established ones such as the law. Consider the latter for a moment. With the semantic web and personal data lockers, contracts may be automatically updated when one or more parties changes states. For example, let’s say that I have an agreement to sell oranges to a supermarket in New York City. I decided to take my business to Ohio and, as a result, my contract will tell me if I need to apply for different licenses. (Yes, you read right.) Paperwork will be filed automatically with the appropriate agencies in my new state. Any work required by lawyers will involve actual legal interpretation and analysis, not administrative activities for which I’m being grossly overcharged.

Sound far-fetched? Perhaps. But it’s coming and it’s going to change the web as we know it, not to mention how we work and live.

Siegel also cites the failure of many “knowledge management” systems. Most were, at best, ultimately incomplete for one simple reason: they depended upon typically overworked people entering updates and information into them. That’s hardly a recipe for success.

The solution is the concept of an ontology, something enabled by the semantic web. At a high level, an ontology automates the learning process for systems, allowing for a comprehensive and commonly understood set of assumptions, facts, and descriptions. This obviates the need for anyone to manually update projects and repositories of information. Using ontologies takes care of that for us.

Enterprise 2.0

How does all of this fit in with Enterprise 2.0? What do cloud computing, SaaS, social media, and the like have to do with the semantic web?

Long story short: Enterprise 2.0 technologies will free people and organizations from the shackles of often less-than-valuable activities. Let’s say that an organization begins using a cloud or SaaS provider for its applications, freeing it from the burden of maintaining them. For example, let’s say that application patches and upgrades are now handled by Amazon’s cloud offering. The cost savings allow that organization to hire employees–or redeploy existing ones–to take on tasks essential to the development of the business. The amount of time requird for system maintenance should drop.

Imagine if a company (call it Acme) transformed its applicant tracking systems to embrace the hresume microformat. Rather than relying on simple and often ineffective keyword searches to find applicants who may or may not meet their needs, recruiters hiring managers would be automatically alerted when much more qualified applicants announce their availability to the world. What’s more, that information is automatically and accurately imported into Acme’s systems, allowing for future matches based on changing business needs.

Conclusion

The semantic web is going to be a game changer. We’ll have to go through Web 2.0 to get to Web 3.0 first. Stay tuned.

Of course, that’s just my opinion. What do you think?

Here’s an excerpt:

Jay Baer: There is of course relentless chatter about social media ROI and success metrics. Measuring social media is viable, but not obvious. Is the same true in adoption of new technologies? How should companies evaluate success?

Phil Simon: Great question. The ROI of many Enterprise 2.0 technologies can be relatively easily derived. For example, an organization that would have spent $5M over ten years on a traditional ERP or CRM application (bought from an on-premise vendor) may spend $1M on a SaaS alternative such as Workday or salesforce.com. Alternatively, an organization may use the open source LAMP stack and OpenOffice and save a great deal on software licenses. Note that open source does not mean free, however.

For other technologies, the ROI is a bit tougher to quantify. How does one easily put a value on better data management via MDM? What is the precise ROI of being able to understand your customer base better via business intelligence (BI) applications?

While ROI is important, a discussion of evaluating success and benefits is remiss without considering risks—that’s why there’s a chapter on enterprise risk management. Any new major enterprise technology endeavor introduces risk. However, many times not doing something is actually the bigger risk.

You can read the entire interview by clicking here.

Here are a few of the questions posed to me:

• Your new book, The New Wave of Technologies, was an impressive undertaking. What motivated you to write the book? How long did it take from concept to publication?
• Of the technologies discussed in your new book, is there one in particular that you think is harder for CIO’s and information technology professionals to embrace? Why do you think that is?
• You describe the benefits of “reverse mentoring” where younger employees can bring a lot to the table and more senior executives can learn from their expertise. Have you seen an example of where this worked well? What made it successful?

To listen the entire interview, click here.

You can watch the video below or go the CS TechCast page. My piece begins around the 13 minute mark and goes for about 12 minutes.