Reality Check 2.0

Over the past month, I’ve been wrestling with blogger’s block. A number of items have kept me from blogging, but the key agitator is the current economic crisis. I’ve attended conferences; I’ve participated in discussions on social media; I continue to Yammer and Twitter, but in the back of my mind a blaring alarm is sounding off. It seems so many in the 2.0 community (who still have a job or have clients) is either in denial or is missing the bleak macro picture here.

This weekend I was watching the Sunday morning news roundups, Former Secretary of State James Baker, speaking on “Meet the Press” reiterated what we’ve been hearing for weeks now, “…it is very serious. It’s far worse than the downturn that we saw back in the 1987 when we had a stock market collapse when I was Treasury secretary. That one was much less broad and severe, but even that took us two years to come out of.”

Now, no disrespect to my late GenX and GenY readers and friends, but Boomers have some experience here that may prove helpful. Those of us who were engaged in the technology workforce in the late 80s and early 90s had to move fast to help our customers cut costs and work smarter. For me, that meant the birth of Business Process Reengineering and Outsourcing. For others, it meant the birth of Enterprise Resource Planning or ERP. Now, you could argue whether any or all of these initiatives actually delivered the results intended, but the fact remains: lots of software developers and consultants made a huge market in downtime adversity.

This recession/depression is poised to eclipse any downturn we’ve seen in our lifetimes. As I canvas the Enterprise 2.0 landscape, I find myself wondering: what is our killer economic crisis app/movement? Twitter? Facebook? Will we save the U.S auto industry by social networking?

Really?

I can assure you, there will be no Federal bail outs for 2.0 startups. Some startups will stretch their life expectancy with VC funds, but at the end of the day, it’s show time. How will you help your customers and future customers grow or at least sustain their business through this economic downturn?

The Enterprise 2.0 Advisory Board is convening in an online forum to discuss themes for this year’s conference. The conversation quickly migrated beyond the soft benefits of social collaboration to the hard, measurable benefits businesses need when navigating through tough times.

Mike Gotta of analyst firm Burton Group contributed this remark:

“Some of the phrases I keep hearing: 1. Efficiency (cost containment/avoidance, streamlining, etc.) 2. Execution (all-things-lean, process refinement) 3. Effectiveness (process and people performance, measurable productivity) 4. Rationalization (of budgets, of projects, of platforms) 5. Governance and metrics to support the above. Operations (run the business) and investment to protect top/bottom line engines (grow the business) are still ok – transformation unless it maps into some of the above areas is more discretionary – a good strategist will not cut to the bone… but overall – it’s a run/grow the business more than transformation. Business transformation (at least in my head) is more than just changing a process. Anything “soft” is getting a hard look – sure – some savvy execs will keep a portfolio perspective and still invest in some long-term areas and not slash things to the point that when the economy rights itself they are strategically behind but they (1) may not have any choice and (2) may not get broad agreement from their peers.”

Even Stowe Boyd, who coined the term “social tools” back in 1999 had this to say:

I am one of the biggest advocates for ‘social’ in the world, but I think it is too limiting for E2.0, and perhaps off message in the econolyptic times we are in.

I think the right theme is something more around ‘making the web work for business’—some blendo idea that allows E2.0 to mean
a/ the adoption of web tools and culture within the enterprise,
b/ the use of the web to better connect the enterprise to the greater world, and
c/ most specifically, the use of web 2.0 IT principles to reinvent enterprise IT, (like cloud computing, AJAX, web services, and so on).

The bottom line is: focus on the bottom line. We are collaborating for survival.

Update 12/01/08:  McAfee blogs on ideas for saving Big Auto.

Author: Susan Scrupski

Longtime fan of technology to improve humanity.

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  • Susan, I could not agree more.

  • Another praise from me here 🙂
    It seems, btw, that many Enterprise 2.0 evangelists are very optimistic nowadays. E.g. Andrew Filev from Wrike – http://www.wrike.com/projectmanagement/10/08/2008/Economic-Downturn-is-Time-to-Innovate
    The downturn is an opportunity, show time, like you said.

  • Wonderful post! That is the question I am being asked to prove at Dell. I think with Ebay, Facebook, Google all losing steam for the social bubble, we do have to focus on ROI. I’m not as handy with an excel sheet as many, and pivot tables give me headaches, BUT… “What’s the impact on the business?” That is the golden question of this movement trying to prevent an implosion. – jmacofearth

  • Susan, I could not agree more. While the downturn is a terrible thing for all of us, I am glad that it is putting an end to all the overblown hype, bereft of any real cost/benefit or ROI analysis.

  • Hans de Kraker

    I think the current environment and circumstances as they develop will filter out any proposition that is not geared to deal with adversity. It will be continuous nudging and slimming for some – others with a business that is founded on enthusiasm and varnish will inevitably evaporate.

    SaaS will flourish because you can cut cost and leverage existing infrastructure, Social Applications, where ever they sit – if they are free-user does not pay models – they will be seriously challenged.

    it is certainly an opportunity for social tools, applications and platforms of merit – since their strength of distributed effort can help them keep their head above water.

    In tough times – the solitary animals are the ones that struggle for survival – whilst a strong pride of Lions will survive – provided they really fine tune their collaboration.

    We will learn what models and companies will shoot ahead over the next few years – those with a high adversity quotient;-)

    Humanity “going social” – with the help of technology has seen a fragmentation and “bottom up” becoming a fav term of all types of all walks of industries. In a similar way – I think what will occur now is the fragmentation in business. SME’s as small identities and entities will go social and you will see “bottom up” in SME’s space. The Enron’s, Lehman’s and current examples of top heavy corporates toppling over left right and centre shows that there is a lot of merit in supporting SME’s – as they offer a distributed opportunity and are the ones that are making a huge contribution to keeping the current economy afloat.

    I think we will see a huge SME 2.0 development – where in “crowd sourcing”, crowd stands for the masses of SME’s ( about 1.8 million in Australia – where 450k are 5 employees or more).

    IBM, Telstra, Google and Microsoft are already a aiming down that track. Google is in pole position to take the SME’s social – but Microsoft will play their significant role.

    SME Enterprise and Social is one of the next massive growth areas – understanding that at any point in time – it is never just one thing and the big corporations will always be around. We live in a hybrid world and being accepting of it – imperfect as it is – make life a lot easier – rather being driven by extremes and splurged expressions of some of the main stream media channels.

  • Susan – what a way to come out of a block! Way to go! this is a great post – the optimist inside me says the confluence of 2.0 and the emerging global crisis might be just what the doctor ordered to get all of us (vendors, IT organizations, businesses, service providers, consultants) more focused on the pragmatic application of these emerging tools and technologies to drive real business value.

  • I agree that there is little chance for bail-out money for E2.0 firms. There is a good chance that the federal government will follow the lead of the Obama campaign to utilize technology. http://blogs.zdnet.com/BTL/?p=10749 His ROI was pretty good.

  • Susan – love this post. The need to show tangible, demonstrable ROI has always been something the Enterprise 2.0 space needed. But in good times, it’s easy enough to say, “hey, look it works in consumer social media, give it a try.” The need to show calculable improvements via social software has become more acute now, and I like your ERP analogy.