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Slide 3: Collaboration in the Cloud How Cross-Boundary Collaboration Is Transforming Business Erik van Ommeren • Sogeti Sander Duivestein • Sogeti John deVadoss • Microsoft Clemens Reijnen • Sogeti Erik Gunvaldson • Microsoft 2009 Microsoft and Sogeti
Slide 4: This work is licensed under the Attribution-No Derivative Works 3.0 United States License. To view a copy of this license, visit http://creativecommons.org/licenses/ by-nd/3.0/us/legalcode or send a letter to Creative Commons, 543 Howard Street, 5th Floor, San Francisco, California, 94105, USA. You are free: to Share – to copy, distribute, display, and perform the work Under the following conditions: Attribution. You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work). No Derivative Works. You may not alter, transform, or build upon this work. The authors, editors and publisher have taken care in the preparation of this book, but make no express or implied warranty of any kind and assume no responsibility for errors or omissions. No liability is assumed for incidental or consequential damage in connection with or arising out of the use of the information or programs contained herein. The following terms are trademarks or registered trademarks of Microsoft Corporation, in the United States or in other countries: Microsoft, SharePoint, MSN, MSDN, Azure. The opinions expressed herein are collectively those of the authors and do not reflect any official position of the sponsoring companies. 2009 production editing design cover photo printing binding ISBN Microsoft and Sogeti LINE UP boek en media bv, Groningen, the Netherlands Susan MacFarlane Jan Faber www.ecardfriends.com Bariet, Ruinen, the Netherlands Abbringh, Groningen, the Netherlands 978 90 75414 24 0
Slide 5: Contents The New World of Business—Collaborative Innovation A Pragmatic Revolution Reading Guide and Acknowledgements Prelude: Business Reality 1 Clouds and Collaboration 1.1 Introduction 1.2 Defining the Cloud 1.3 Organization is Collaboration 1.4 The Cost of Crossing Boundaries 1.5 Conclusion Case Stimmt AG 2 The Impact of Technological Revolutions 2.1 Introduction 2.2 The Delicate Balance Between Technology and Community 2.3 Technology’s Poisoned Chalice 2.4 Six Technological Revolutions 2.5 Conclusion Case REAAL Verzekeringen 3 The New Nature of the Firm 3.1 Introduction 3.2 A Society of Conversations 3.3 Management 2.0 3.4 Conclusion Case Holland Casino 4 On Productivity 4.1 Introduction 4.2 Changing Markets 4.3 Consequences for IT Case Sydved AB 5 The Anatomy of Collaboration 5.1 Introduction 5.2 Electronic Communication 5.3 Other Tools, Other Activities V VII IX 1 9 9 9 18 26 30 31 33 33 34 37 40 48 49 51 51 56 61 68 71 73 73 74 82 85 87 87 89 92 III
Slide 6: Collaboration in the Cloud 5.4 Collaboration – Software Matrix 5.5 Conclusion 6 Groundwork for a New Organization 6.1 Introduction 6.2 What You Need to Succeed 6.3 A Model for Trust 6.4 Collaborative Culture 6.5 Goals and Rewards 6.6 Conclusion Case Publishing Company 7 Mixing Software + Services 7.1 Introduction 7.2 The Evolution of Service-Oriented Architectures 7.3 The Software + Services Model 7.4 Implications of Software + Services 7.5 Conclusion Case ITAGroup 8 Social Computing for Business 8.1 Introduction 8.2 The Emergence of Social Computing 8.3 Collaboration and Social Computing in the Enterprise 8.4 Web 2.0 8.5 Software + Services Enabling Social Computing 8.6 The Web as the Hub 8.7 In Conclusion – Where Do We Go from Here Case UVIT 9 Fourteen Questions to Guide the Revolution 9.1 Introduction 9.2 The Fourteen Questions to Guide the Revolution Case Toyota Material Handling Europe 10 Debunking Collaboration Myths 10.1 Introduction 10.2 The Myths 10.3 Conclusion About the Authors Index 121 124 125 125 128 129 138 146 155 157 159 159 161 168 170 174 177 179 179 179 181 185 192 194 194 197 201 201 202 215 217 217 218 225 227 229 IV
Slide 7: The New World of Business Collaborative Innovation Market turmoil shakes consumer and business confidence, diminishes the value of financial assets, and creates uncertainty. History, however, informs us that shifts in the economic landscape also offer unique opportunities for those who are able to look past the near-term difficulties and seek out opportunities. Organizations can choose to retrench, or they can choose to prepare for success and leadership roles. If they take the latter approach, returns from hard-fought cost-reduction battles can be turned into infrastructure improvements, more rational integrated processes, and fundamental changes in market presence or positioning to fill new niches or those surrendered by competitors. Seeing opportunity in times of turmoil reframes challenges in a way that projects the lessons of history onto the future. Suggesting that organizations seize new opportunities during economic strife does not minimize the significant difficulties they will encounter. Although picturing the future is difficult, turbulent times call for balance against new factors. Balance will always be essential. Organizations that can balance near-term concerns with forward-looking expectations will be better poised to succeed as markets calm; those that retreat risk becoming an anachronism while the world reinvents itself. Whether one chooses to be opportunistic or defensive in their approach to the turbulent economy, software and information technology has a central role to play as the strategic enabler of success, the conservator of scarce resources, and the accelerator of recovery. The transformative impact of Software + Services and a new generation of social computing technologies are profound and ongoing. These innovations enable people and organizations to share information, collaborate on projects, and build virtual communities, irrespective of time and geography. In the process, they have made command-and-control hierarchies unnecessary as mediating mechanisms for the flow of information. V
Slide 8: Collaboration in the Cloud Collaborative software unites the blended workforce and makes the experience of working together as natural and productive as working in the same physical location. Now, more powerful, integrated applications and services for social computing – including RSS feeds, wikis, blogs, and social networks – are joining the arsenal of collaboration tools available to businesses as they become more secure and manageable in the enterprise. Use of these tools is growing. Facilities such as project workspaces, document repositories, team access to contact and schedule information, shared project flowcharts, shared task lists, and automated notifications provide a foundation for virtual teamwork by keeping everyone’s status and work visible. Team members can see shared information in the periphery of their standard work environment, or they can access up-to-the-minute data from any portable device. Organizations are only beginning to come to grips with the impact of the internet and other technologies on core business functions such as product development, sales, customer relationship management, and operations. I hope that this book can help you along this journey – providing both practical insight and guidance towards realizing business value in this new world of business. Ron Markezich, Corporate Vice President, Microsoft Online Redmond, February 20th, 2009 VI
Slide 9: A Pragmatic Revolution The book that you have in front of you is an important book. Not only does it discuss two of the “hottest” topics of the present-day IT industry, collaborative software and cloud computing, it also gives the contours of the New Firm that will emerge after the dust clouds of this dramatic economic recession have settled. And it is these contours that will allow you to anticipate the significant change ahead and prosper more rapidly than others in the upturn that will eventually arrive. This gray and gloomy Tuesday morning saw the publication of yet another set of economic data that was again revised downward, illustrating the seriousness of the recession that we are experiencing. What was particularly disturbing today was the rate at which circumstances deteriorated. We would have to go a very long way back to see an economy as depressed as it presently is, which makes it hard to stay somewhat optimistic. Although such shocks to the economy often lead to apathy and inertia, I am totally convinced that this recession – as is always the case – is actually a sign of deep and fundamental transformation of the nature of the firm or organization. Those organizations that believe that the best strategy is to lay low and wait until the storm is over, are seriously mistaken. To stay with a metaphor, what we are dealing with here is not a storm that eventually will die down. It is much more a shift of tectonic plates, creating a series of violent earthquakes that will change everything forever. There is no premium for laying low and for waiting in an earthquake zone. When you are going through “hell” the main thing is to keep going, as they say! So, the time is now to adjust to this new reality and to start creating and strengthening the competences that will determine success of the New Firm. Failure to do so is risky. It might jeopardize the future of your organization but it will definitely slow you down in the recovery. Organizations that are able to resist the pressures of operational cost cutting and keep some minimum level of investment going are clearly going to profit much quicker from the upturn than those that are totally fixated on short term survival. That is why the main management challenge of today is to create some kind of intelligent cost cutting, which to many will sound like an oxymoron. Once again the famous dilemma of management emerges: VII
Slide 10: Collaboration in the Cloud keeping an eye on what is important while dealing with what is urgent. However, this book should help you argue for investment in collaboration in times when cash is king. It could even help you save money by accelerating the shift towards delivering software as a service. Although a lot still remains unclear, some basics of this New Firm are emerging. Hierarchical organization will give way to market. Conversations become key and the capability to collaborate within and across organizational boundaries will inevitably determine success. Modern software tools are creating radically new ways of collaborating between people. The pervasiveness of the internet combined with new insights in software architecture is creating new possibilities for delivering this functionality from the cloud, instantly widening the scope for collaboration to a global perspective. However, some caution is necessary, since we are at risk of technological determinism. Things are not as simple as they sometimes appear to be. This industry has become famous for its overestimation of change in the short term. It is overhyping technology breakthroughs and ignoring the difficulties that organizations will have applying these technologies in their business processes. That is why two chapters in the book are dedicated to keeping this revolution pragmatic. By debunking some common myths around collaborations and giving you the right questions to ask, this book will help you to focus on the matters that are important and to cut through all the hype. Yes, this recession will cause violent change, but it will not do so overnight. Technology can be considered a platform for social change or a reflection of it; however it is seldom the change itself. It is my sincere hope that the discussions in this book will inspire you to find the true nature of this change and to determine how it will impact your firm. Michiel Boreel, CTO Sogeti Amsterdam, February 10th, 2009 VIII
Slide 11: Reading Guide and Acknowledgments This is a book about collaboration and cloud. It is about collaboration between people and between companies, and about how this collaboration is changing. It is also about how markets and companies themselves are changing, or how they will have to change in order to confront changes in technology and society. And it’s about software: how we use it and how we are growing towards a mix of “traditional” software and services from the cloud. This book is written for any reader interested in IT strategy, innovation and trends in business and technology. The book is not technical, and it will show how technology can be used to create business value by improving collaboration. CIO’s, enterprise architects and people responsible for IT direction will benefit from this book because it will advance their thinking on the topics of collaboration and cloud computing. Though it is not a cookbook or “how to” manual, this book will provide practical insights and guidance for the creation of your own strategy in these matters. Specifically, we will hand you a list of questions to ask when getting involved in any initiative relating to collaboration or the cloud. Chapter 9, “Fourteen Questions to Guide the Revolution” provides a pragmatic approach to the topic. Combine that with Chapter 10, where we debunk some common myths, and you should be all set to move forward in this exciting field. In the prelude we will examine the current crisis in the (global) markets, and we will talk about the options companies have when faced with turbulent times. • The first chapter will then introduce the concepts of collaboration and cloud computing and how they are connected. We relate cloud computing to Software as a Service and show the drivers for these trends. We also talk about the nature of collaboration, and we sketch out several collaborative scenarios in this chapter. • Chapter 2 talks about the larger shifts in society. It discusses how trends in many areas are combining into large transformations, and it discusses the effect of technology on people. • Then in Chapter 3 we introduce the new nature of the firm, where not just competition but especially collaboration is of the essence for survival. We introduce the value chain 2.0. • Chapter 4 looks at the effect inside organizations when faced with these changing times. It discusses the consumer-employee, the consumployee, as a source of innovation, and goes into how an IT depart- IX
Slide 12: Collaboration in the Cloud ment could respond. • Chapter 5 shows the different ingredients of collaboration and how they are interrelated. It also talks about email and the email-less organization. • Chapter 6 is about the basics that need to be in place for successful collaboration. It talks about trust, culture and rewards. Collaborative culture may be hard to create from scratch, but we will give some guidance on what’s involved. • Chapter 7 talks about the reality of cloud or Software as a Service, and shows that a mix of both traditional software and cloud services provides greatest flexibility to deliver right-sized solutions to an end user. • Chapter 8 goes one step deeper into the areas where social computing for business can be of value, and the chapter discusses some of the scenarios. Here we also put Web 2.0 in a corporate context. • Chapter 9 will hand you a list of questions to use to keep your feet on the ground. It will serve to measure the reality of any proposal and guide you when examining cloud and collaboration further, in combination with Chapter 10. • In Chapter 10 we debunk some of the common myths around collaboration. • Throughout the book, between the chapters, you will find real-life customer cases that show the reality of collaboration and/or Software as a Service. Acknowledgements The authors thank the many clients who provided valuable input for this book through interviews, discussions and (of course) projects. Their often different views on terminology and strategy showed us the range in which both collaboration and cloud computing are used in reality today. Eight of the interviews given have been transformed into the case studies that are spread throughout the book. This book is the result of a close collaboration between a team of authors from Microsoft and Sogeti. Supporting this team of authors were the many contributors and reviewers from both companies who have helped to create and hone the content. Special thanks go to Herve Tourpe, Laurent Dieterich, Mike Martin, Per Björkegren, Albert Hoitingh, William Heurdier and Michael Wagner for their input and/or reviews of early versions of the manuscript. X
Slide 13: Prelude: Business Reality The World on Fire It is September 15, 2008: Meltdown Monday. The world’s financial system has collapsed into a global crisis. Stock market indices are dropping by double digits and shareholder value is disappearing instantaneously everywhere. Seemingly healthy companies are forced to ask for assistance. National governments of most countries have to jump in to prevent an even worse catastrophe. Panic and uncertainty are sweeping the globe. The world has faced financial crises before. Yet never before did a crisis have such a worldwide impact. How can this be? The day after Meltdown Monday, the New York Times featured an overview of the major stock markets across the globe. The surprising realization that emerges from the graph is in the pattern the markets follow. These patterns are very similar. The stock markets in different countries are synchronized. In other crises, when things were simpler, the markets in different countries might have moved more or less simultaneously (because, for example, the different currencies were all tied to the price of gold) but never was the connection this close. These days, the markets are much more tightly connected by real-time international trade, products and (financial) services, leading us to “in fact, the largest synchronized downturn really in the postwar period”1 according to Charles Collins, deputy director of the IMF’s research department. While we are used to thinking about local business and markets, companies are increasingly operating across borders, turning from “national” into “multinational,” from local to global players. The stock markets are apparently engaged in a close and intricate dance that was not obvious to the outside world before. The crisis, and particularly the global nature of the crisis, came as a shock to all but the greatest doomsdayprophet. Could the crisis have been averted? Is that a rhetorical question in a time when you can find all information on the web? Across the globe we see the same behavior, but people are not capable of making sense out of the 1 NPR news, http://www.npr.org/templates/story/story.php?storyId=99404776. 1
Slide 14: Collaboration in the Cloud complexity of events beforehand. Despite all transparency, finding patterns and predicting the future is still impossible. HANG SENG FTSE100 Hong Kong Britain +10.2% +8.3% +11.2% CAC40 France Germany +11.4% +14.7% DAX BOVESPA Brazil +11.6% S&P500 United States +11.8% NASDAQ G 0 -10 -20 Monday’s change in %, since September 20 G Figure 0.1: Overview of Major Stock Markets Around the Globe Life in a Complex World The internet is now over 20 years old. Never before has a new technology had such a wide impact on global society. The internet has changed (business) life beyond recognition: Distances have shrunk or disappeared completely. Technology has made the earth small and flat. Information, work and capital can be spread across the globe at the press of a button. You can contact strangers and create new forms of collaboration in the blink of an eye. At the same time, the problems of the globe also find their way to everyone: everybody knows about the challenges the world is facing with regard to energy, the environment and clean water. Wars and terrorism are global themes. Everybody in the world is connected economically, technologically and socially. Time itself has changed, or at least our perception of it. We are living in a 24/7 economy. On the World Wide Web there are no closing times or holiday closings. The doors of the virtual stores are always open to anyone – or, more precisely, to anyone with a credit card. A transparent world makes secrets history and drowns us in data. There are no more secrets! Good news and bad news circles the world in an instant. Information is available to anyone anytime. We are continuously connected to the internet. Using computers, laptops, cell phones and other devices, we can access a mountain of data on request. Moreover, this mountain is still growing: everything that can be digitized is being transformed into bits. Maps, old archives, video, music, and statistics are added to the internet 2
Slide 15: Prelude: Business Reality every day. Every object, process and service will be able to communicate and combine autonomously with someone or something else. The internet is changing from a collection of pages to a database of things.2 The question is, how do we transform this huge pile of data into intelligence? And at what cost? Quoting Herbert Simon: What information consumes is rather obvious: it consumes the attention of its recipients. Hence, a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it. IDC expects that by 2011 the digital universe will be ten times the size it was in 2006.3 How do we keep it from exploding? How do we stay on top? And language? Is language the spanner in the works? At this moment, language remains a barrier. Half of the world cannot communicate with the other half, simply because they cannot understand one another or even read each other’s alphabet. However, this barrier will break down soon. Numerous software vendors are busy working to allow at least some communication across linguistic boundaries. The 100% automated, foolproof translation service is a challenge closely tied to the holy grail of artificial intelligence, but in a couple of years you might be uncertain as to what language the person on the other end is using to communicate. The above trends not only affect us humans, but even more, they affect the way organizations operate, how society works. Companies can no longer survive on their own in this dynamic world. Any one player alone cannot grasp and properly respond to the complexity of the large interconnected world. Technology and how it can be used is about to drastically change the nature of companies and how companies create value. The crisis of the fourth quarter of 2008 was, at least in part, made possible by using technology to connect and combine markets. The crisis itself shows that the disruptive nature of these new technologies is inescapable. Every industry has become involved and is feeling the effect. 2 3 http://www.kk.org/2008/11/web-100.php. http://www.emc.com/collateral/analyst-reports/diverse-exploding-digital-universe.pdf. 3
Slide 16: Collaboration in the Cloud Patterns in Complex Systems: The Butterfly Effect In 1961 meteorologist and mathematician Edward Lorenz executed a simulation on his computer to create a weather forecast. To his astonishment, the simulation showed a completely different prediction when he rounded the number 0.506127 to 0.506 in a series of numbers. In 1963 he published his findings in the New York Academy of Sciences. He described the above result as follows: “One meteorologist remarked that if the theory were correct, one flap of a seagull’s wings could change the course of weather forever.” Later, the seagull mentioned was replaced by a butterfly, which led to the famous quote, “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?” The effect is also called the butterfly effect4 and it is often used to describe chaos theory. This theory states that small changes in the initial setup of a dynamic system can have a huge impact in the long run, an impact that is impossible to predict. Examples of such complex, dynamic systems are the weather and also the global economy. In the conclusion to his book Linked writer Albert-László Barabási5 makes a statement about how markets are defined by interaction and connections. He shares the following thought: “The unpredictability of economic processes is rooted in the unknown interaction map behind the mythical market. Therefore, networks are the prerequisite for describing any complex system, indicating that complexity theory must inevitably stand on the shoulders of the network theory.” This thought raises questions such as, what is the relation between the network called The Internet and this present-day economy? What is the cause and which is the effect in events that involve both? How can companies and governments handle this increasingly complex world? Managing in Times of Change A downturn does make some things easier for a manager. It helps you focus on your clients and makes it easier to prioritize. Managers looking to use this 4 5 ”Butterfly Effect,” Wikipedia, en.wikipedia.org, 30 November 2008. Albert-László Barabási, Linked: How Everything Is Connected to Everything Else and What It Means for Business, Science and Everyday Life, Plume Printing, 2003. 4
Slide 17: Prelude: Business Reality time to change their organization for the better will also be examining their own role in this change. Marketing guru Seth Godin wrote in his book Tribes that the real difference in today’s business world is that anybody can create change. Everybody has the opportunity to connect and start a new community (“Tribe”). These communities nurture the leaders of tomorrow, and organizations can choose to embrace these leaders, inside or outside their organizational boundaries. Management is about manipulating resources to get a known job done… leadership is about creating change you can believe in…. Leaders have followers. Managers have employees. The Virginia Satir Change Model6 gives insight into how organizations can change in times of chaos. In this model, a disruption of the old order is a golden opportunity to get things done and reach new levels of performance. On his blog The Social Customer Manifesto7 Christopher Carfi describes the process as follows: • Things are plodding along within an organization or community. • There is a “foreign object” (e.g. a new thought, or participant, or strategy) introduced into the organization. • Things get chaotic while the community figures out how to deal with the new. • There is a transformational thought, a “transforming idea,” and a point at which the group “gets it” and starts to gel in the new world. • Chaos declines, and performance then stabilizes at a new, improved level. In the popular and related book The Black Swan,8 written by Nassim Nicholas Taleb, more is said about events that can disrupt the old status quo. He uses a story about the discovery of black swans as an example to illustrate how accidental events can change our perception and our lives. Harry Potter was a black swan, 9-11 and the Meltdown Monday of September 15, 2008 were, too. They are unpredictable, have a major impact… and afterwards we try to make them rational and predictable. 6 7 8 http://www.satirworkshops.com/files/satirchangemodel.pdf. http://www.socialcustomer.com/2008/11/satir-ical.html. Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable, Random House, 17 April 2007. 5
Slide 18: Collaboration in the Cloud New Status Quo Old Status Quo Foreign Element Time Integration & Practice Chaos Performance Transforming Idea Figure 0.2: Satir Model of System Change Times of Trouble or Times of Choice Companies have a choice. Will a company pull back in defense or use the turmoil to reach new levels of performance? Focus on survival only, or focus on the market of the future after the crisis? Are companies able to use the economic downturn to their advantage? The urge to survive drives companies to cut cost, reduce operations and lay off many people. Yet even survival needs direction: the American car companies are not looking back for survival, they are looking forward. The newspaper industry is not looking at reviving print media, but looking forward. This is the essential insight that will shape the leading companies of the future: focus to survive today’s crisis and to survive the radical changes that are happening all around us. Free9 is heralded as one of the business models of the future. Thanks to digitization, globalization and opening of markets, the global market is 9 http://www.wired.com/techbiz/it/magazine/16-03/ff_free. 6
Slide 19: Prelude: Business Reality becoming more efficient. Lower transaction costs are the direct result of changing markets, and it forces companies to downsize and rethink their strategy. New sources and markets must be opened up in order to survive, and only through collaboration with others can this be achieved in time. One thing that the current crisis has taught everybody is that change is needed. Companies can no longer ignore the reality of a globally connected, complex and volatile business world. Sticking to old routines will not suffice. A new era calls for new measures. As for where to look for solutions, Seth Godin recently shared this insight on his weblog10 : “The dramatic leverage of the net more than overcomes the downs of the current economy. The essence is this: connect. Connect the disconnected to each other and you create value.” Organizations can create value in this new economy by connecting and collaborating. 10 http://sethgodin.typepad.com/seths_blog/2008/11/how-to-make-mon.html. 7
Slide 21: 1  Clouds and Collaboration 1.1 Introduction A promise is a cloud; fulfillment is rain – Arabian Proverb The topics of collaboration and cloud computing have a lot in common. For one thing, both are concepts that touch or cross the boundaries of an organization and that are closely related to corporate innovation. Both are relevant to the relation between business and IT. Both play an important role in these financially unstable times. And last but not least, both can be broadly interpreted and can have a major impact on the efficiency of organizations and IT. Microsoft and Sogeti recognized the importance of both topics, and they also saw how these developments accelerate each other. Accordingly, these companies decided to collaborate, research the topic further, and write this book. In it, we will discuss both cloud computing and collaboration in depth. We will start by exploring how these terms are commonly used. 1.2 Defining the Cloud The term “cloud” originally came from diagrams where the internet itself was represented by an image of a cloud, yet trying to find a narrow definition of cloud computing that everybody agrees upon is not easy. The most specific definition would be that it describes a situation where some computing is taking place “somewhere else,” using the internet. But then there is also talk of something called “my cloud,” where the “somewhere else” might be right in your own datacenter. Clouds seem difficult to nail down. Forrester Research in a recent presentation defined cloud computing more in terms of business economics: “Cloud computing is buying IT capacity and applications as-needed from a utility service provider.” While this definition does not mention the actual delivery model, it does touch upon the expansive nature of cloud computing and notes that there is another party involved: the utility service provider. Also, cloud capacity can be consumed at a cost. 9
Slide 22: Collaboration in the Cloud Payment may be in money or, in the case of “free” services, payment may be made by exchanging advertising value: consumer attention as currency (and some providers offer services for free simply in the hope of creating lock-in and selling upgrades or support). Another analyst firm, Gartner Research, uses different phrasing and focuses on slightly different aspects but arrives at a similar definition: “Cloud computing is a style of computing where massively scalable IT-related capabilities are provided ‘as a service’ across the Internet to multiple external customers.”1 It is interesting to note that Gartner specifically includes “as a service” in their definition. Meanwhile, in less formal terms, “cloud” has been widely adopted by many parties trying to market their services as part of this new and engaging concept. Companies are increasingly including internet functionality in their IT portfolios. The internet is slowly but surely reaching into all areas where connecting to some functionality has become more important than owning that functionality. The internet is serving up solutions for situations where it’s more important to get things done than to own the hardware or software that is needed to get those things done. It starts with very generic solutions, but increasingly solutions that are more specific become available online. It is in this light that “cloud” has become the label to put on all things that are provisioned over the internet, be it server capacity, complete office solutions or a CRM system. Figure 1.1: Cloud Computing Simply Explained2 1 2 http://devcentral.f5.com/weblogs/macvittie/archive/2008/11/03/cloud-computing-its-the-destinationnot-the-journey-that-is.aspx. http://geekandpoke.typepad.com/geekandpoke/2008/05/simply-explaine.html. 10
Slide 23: 1 Clouds and Collaboration Some characteristics that are commonly associated with a “cloud” offering: • Users and clients connect to the services using the internet. • The service offered can range from technical services to a complete userfacing, functional solution. It can also offer part of the stack, such as storage, computing power, technical components or partial business components. • A provider in this scenario will often aim for “economy of scale” by offering a multi-user or multi-customer (“Multi-Tenant”) environment to optimize efficiency, where the fluctuations in capacity demand will even out over multiple users. The services offered then only have basic configuration options but may be enhanced with (standard) add-ons. • The provider will generally charge for use of the service (per user, per day, per load, per call, etc.). There are also many providers offering services “for free” while they are still in Beta mode, or which are paid for using an advertising model. • Services from different providers should be (but are not always!) easy to combine ad-hoc to fit the needs of the client. The term “mashup” defines the situation where multiple services are combined to (easily) create a new solution. The cloud concept builds on the themes the IT industry has explored when introducing the Application Service Provider concept, outsourcing of datacenters and the introduction of shared service centers. The ASP concept introduced us to the concept of an external-party offering functionality on an on-demand and pay-per-use basis. Outsourcing helped us consider redrawing the boundaries of our own IT for the sake of efficiency. Shared Service Centers helped us look for communality in a broader set of needs. All these themes return in cloud computing. These developments were then fueled by “Web 2.0” (another one of these hard-to-define terms), where simple interfacing allowed users to configure and combine the myriad of services to suit their needs, while adding a social context: doing this together with others. The resulting explosion of start-ups and innovations created a rapidly evolving market where many valuable services and websites emerged. Examples of these are sites that let people work together on documents or graphics (www.zoho.com) and sites that help people find interesting information online using social bookmarking (digg. com or stumbleupon.com). Also, providers are starting to offer all sorts of technical components online to integrate information or create new combinations online (RSS readers online that allow you to integrate news feeds, 11
Slide 24: Collaboration in the Cloud Yahoo! Pipes and MS Popfly, thereby combining feeds and processes into new feeds or services). Cloud Formerly Known as SaaS? At this point you might ask: but how does cloud relate to Software as a Service (SaaS)? Both are definitely used in the same space: Software as a Service is the term the IT industry originally used to describe the model where service providers offer a hosted solution for which clients pay based on how much capacity they actually use. Software as a Service is more focused on complete solutions that are accessible over the internet. In a similar vein, there is also the notion of infrastructure as a service, where server or storage capacity is made available. Cloud computing is a broader term, which also comprises Software as a Service, whereas SaaS originally was more narrowly associated with complete solutions from specific Application Service Providers (ASP’s). News Volume ‘Application Service Provider’ News Volume ‘Software as a Service’ News Volume ‘Cloud Computing’ 1996 1998 2000 2002 2004 2006 2008 Figure 1.2: Waves of Terminology Hitting the News3 3 Source: Google news archives, not to scale. 12
Slide 25: 1 Clouds and Collaboration If you go online today, you will find that many solutions can be provisioned “as a service,” not least because it is a very attractive model for software vendors. Vendors offering their products as a service have an easier time dealing with the complexities of versioning and roll-outs, and they can craft very lucrative contracts. The focus of the larger providers is primarily to provide economies of scale: offer commodity services at very competing prices (cheaper than on-premise installations) and earn profit by attracting and locking in large numbers of customers. Large providers will be the only ones that can build for scale, so they are the ones able to offer commodity services (email, document management, messaging etc.). Smaller service providers cannot compete and must provide value with add-on or specialized services. The good thing is that the commoditized services provide a standardized groundwork on which many other services can flourish. For the (potential) consumer of the service, the attraction often lies in the lower up-front cost, better financial structure (fixed versus variable cost), ease of deployment and easy scalability. It is simple to try a new solution and scale up if it proves successful. Provisioning software from the cloud is generally quicker, which comes in very useful in for example a merger scenario. Overall we could say that Software as a Service means that the CIO has fewer worries. The CIO has to worry a lot less about:4 • Upgrading the software and technology stack: with SaaS the provider takes care of most of this (sometimes client software still needs to be updated to be able to consume a service). • Getting stuck using an old version of software for which support has expired: using SaaS you always get the latest services. • Making sure the software needs and infrastructure match: again, something the provider will take care of. • Maintaining multiple staging environments (testing, pre-release, development): switching extra “environments” on or off is easy with SaaS. • Building technical expertise for the software: all you need to know is how to use the service, its contract and interfaces, not its inner workings. • Shelfware running up a bill for unused licenses: unused services may be free of charge or capable of being turned off. 4 http://buildingsaas.typepad.com/blog/2008/06/more-saas-simplicity-additional-things-that-saas-customers-dont-have-to-worry-about.html. 13
Slide 26: Collaboration in the Cloud Major impact of software upgrades: a service change will generally not affect databases, platforms, etc. Performance tuning: in case of SaaS, call the provider if the SLA isn’t met. Vendor attitudes, bad support, bad quality: a service contract depends upon a happy client as opposed to a one-time license sale that is final and finite. User acceptance / adapting to new software versions: fewer big releases and more small steps lead to a kind of continual software/service improvement that users can follow more easily. People act as part of the viral deployment of new features/capabilities. • • • • On the downside, new uncertainties are also part of the reality of SaaS and cloud. Security and confidentiality of data are often cited as a problem (see also Chapter 10), new governance models are needed to manage a multitude of external parties, backups and archiving need to be approached differently, how we test will change etc. Also the question of integration and how to ensure a single user experience will demand some study. Some of these issues are addressed by new standards, some require a new way of thinking and others might simply be the cost of using SaaS. Hardware managed by others Shared applications Elastic Internet resources Provider-dedicated Web applications and Web content Fixed, dedicated resources Off-Premises Cloud Native Web Applications Hosting Web Hosting SaaS Cloud Platform APaaS IaaS AIaaS Infrastructure Utility Hosted dedicated Web applications and Web Content Commodity (industrialized) computing resources Programmable or programmatically accessible resources AIaaS – Shared Application Infrastructure as a Service APaaS – Application platform as a Service IaaS – Integration as a Service Figure 1.3: This diagram from Gartner shows the wide range of terminology used in relation to cloud and SaaS 14
Slide 27: 1 Clouds and Collaboration Whereas SaaS still typically involves complete applications, the options available from cloud seem to be more flexible: offering partial solutions, components, and individual services that can be used to create your own solution. There are many examples where cloud can offer almost anything as a service. Figure 1.3 is an attempt by Gartner to draw some borders around the different clouds. Quick News Highlights from the Cloud To give you some idea of what services are being offered from “the cloud,” the following are some random highlights of recent (end 2008) news announcements involving cloud computing or Software as a Service: Expresso (ExpressoCorp.com) has launced an online real-time collaborative Excel solution as a service that according to their website assists in the trend toward managed on-line business communities. ● Jobscience.com is offering new Recruitment applications as a Service ● Cornerstone.com has launched a new Learning and Talent Management platform that can be used as a Service ● At descarted.com you will find On-Demand fleet and transportation management services that are used by among others Home Depot. ● Etelos.com is offering current application vendors to pick up existing applications and start provisioning in an As A Service model. ● Zoho.com is offering a complete range of online productivity solutions such as email, document creation and spreadsheets. It is now also offering SQL as a service, offering to integrate data from multiple websites ● Sage is offering an Online Cashbook called Sage Live Cash. Having embraced the Software as a Service philosophy, the Sage Live team has gone as far as it can to exploit the opportunities of the Web 2.0 approach: integration with Google Docs and built-in link to PayPal online payment solutions. ● Mortgagedashboard has extended their Loan Origination System that is a SaaS solution ● Themis solutions is offering a complete solution as a service for attorneys to support their practice. ● Demographicsnow has improved their customer and business profiling SaaS offering ● Compliance 360 announced the availability of its claims audit solution that helps organizations manage a wide variety of claims audits and appeals, including those conducted under the CMS Medicare Recovery Audit Contractor (RAC) program. ● Litebi has launched business intelligence delivered via Software as a Service. ● Fi-Tek, LLC and the Northern Trust Company announced the release of TrustPortal that is also available in an ASP model: a fully integrated, straight-through solution for trust management that includes investment management with electronic trade execution, compliance, administration, accounting, operations, automated account review, extensive web-based report engines, and with a host of third party interfaces including complete custody reconciliation. ● Phisme is offering a service to prevent phishing attacks ● Webroot 15
Slide 28: Collaboration in the Cloud announced E-Mail Security SaaS that protects against spam, viruses and data leakage, along with additional compliance, archiving and business continuity features. ● Winscribe has launched a Digital Dictation solution as a service. It will mainly be used by healthcare professionals. Physiotherapists are using Phillips devices to record their dictations, which are then uploaded to a secure site that can be accessed by secretaries who work in another building. ● Elemica is offering a service that supports supply chains. Service as a Service It is important to keep in mind that what’s new is not simply that computing starts to reside in different places, but that for a user, there is less involvement with the software part of the service. The focus is shifting from the technical features of software to the use, functionality and usability of the services. Don’t underestimate the appeal for a business user of being able to set up a portal, website or dashboard without needing to call the IT department. If anything, online services magnify the need for good usability. For a business user, the important part of “anything as a service” is that it really can be “service as a service.” It is no longer about software or technology; it really is about the discovery and the use of a service itself. If, for example, a business user discovers a website offering a simple tool that allows him to keep track of the competition by analyzing their rates or press releases, this same business user can start to use this service and integrate it into his daily processes. If he is then also supported with the knowledge and a simple framework to integrate the service into the other tools he’s using (for example, an existing dashboard or spreadsheet), the role of the IT department will begin to shift to providing an infrastructure instead of providing solutions. There are many vendors playing a part in the current cloud: each offering their own software solution as a service, each providing different models of payment and delivery. Blogger Matias Woloski5 wrote a thesis on the topic of SaaS. In his research he drew a conceptual map of the SaaS space and related topics (see Figure 1.4). Though again using different terminology than, for example, Forrester Research, the elements he recognized are roughly the same. 5 http://blogs.southworks.net/mwoloski/. 16
Slide 29: 1 Clouds and Collaboration Matias Woloski also created a similar taxonomic diagram showing the names and logos of some companies offering services in particular spaces (see Figure 1.5). Since this is an area that is still booming, this diagram was already outdated the moment it was drawn, but it will give you an idea of where different service providers are positioned. Figure 1.4: Woloski Conceptual Map of SaaS Figure 1.5: Woloski Map of Service Providers 17
Slide 30: Collaboration in the Cloud Already from these diagrams and the news announcements above, we see that many of the services offered in the cloud are in some way related to collaboration, either by proving support for web conferencing between groups of people, by creating documents online or by sharing information about clients or enterprise resources with colleagues. So let’s take a closer look at collaboration. 1.3 Organization is Collaboration Business is predominantly carried out by organizations, and an organization is essentially an arrangement of people working together for a common goal. In other words, collaboration is the essence of any organization, and organizations exist to better organize collaboration. Still, businesses have been slow to improve and support this very collaboration as something that could be of importance to the overall success of the firm. Organizations try hard to hire the best people and build teams and departments with the necessary skills. They try to motivate people with bonuses and benefits. But when it comes to actually looking at the interaction between people, and how an organization can best support it, practices are thin. For the most part we have used proven (i.e. old) management models, introduced email and mobile phones, and for the rest, left people to their own devices. An important aspect that also defines an organization is that it is active within an environment from which it is separated by some boundary: there is an “inside” and an “outside” of the organization. Where this boundary is, how large the organization within this boundary is, and how the organization is interacting across this boundary has all changed due to the power of the internet and other market forces. And it will continue to change even more, driven by competitive forces, globalization and, not least, by new technologies. The speed of change is almost real-time. As Ivan Illich once said: “We might already be beyond the age of speed, by moving into the age of real-time.” Now, how can you develop effective organizational strategy in times of change? In times of economic turmoil, there is a tendency to focus on defensive measures by trying to reduce costs and optimize efficiency. Looking at productivity will surely help in that respect. You can make people more effective and efficient; reduce the time spent on meetings, travel or searching information. Help people make better and quicker decisions, create better deliverables or do better knowledge management. 18
Slide 31: 1 Clouds and Collaboration Other companies will use these times for exploring innovation: trying to find a new and future market and developing a commodity that will do well in that market. In times of market fluctuation, it’s just as important to hang onto your part of the future market as it is to survive current circumstances. This too is a driver for looking at collaboration: trying to find new solutions, innovations and opportunities that can be achieved by the people who work for you. And here’s the crux: even people that are not part of the organization can be engaged to work with you, and for you. Thanks to the Web 2.0 tools that are widely available, companies can “tap into the collective intelligence.”6 And when you succeed in engaging these people, they will be your future most loyal customers. On both ends, it pays to examine “collaboration”: to optimize existing processes and to create new opportunities by starting an ongoing dialogue with your customers. Defining Collaboration Before moving on, it will be interesting to look at your own understanding of this concept: What is your definition of “collaboration”? Which other terms do you associate with it? In what context have you used the term in your job recently? In talking to people from different organizations, a lot of definitions of collaboration surface. Some are broadly addressing business-tobusiness activities; others are only using the term to talk about the implementation of specific technology. But even then, some use it to describe their conference-calling partner; others talk about their portals and intranet, and still others talk about their project management approach. To explore your own assumptions and understanding of the concept “collaboration,” here are some thought-provoking questions: • In what context did you last talk about “collaboration”? • Do you or some of your colleagues collaborate with competitors? Perhaps in an area where you don’t compete, or where you provide commodity products or services? • Is sending an email a form of collaboration? Is using the phone? • Do you personally collaborate with some people more than with others? With whom do you collaborate? Who else could you collaborate with more intensively? 6 Don Tapscott, Wikinomics: How Mass Collaboration Changes Everything, 2006. 19
Slide 32: Collaboration in the Cloud How does the culture and management of your organization influence the way you and your colleagues collaborate? Are you personally trained or supported in how to collaborate? Do you or some of your colleagues collaborate across boundaries? With other business units? With people outside your organization? With friends? With anonymous people outside your company? Is using Facebook, LinkedIn, MySpace, instant messaging or Twitter collaboration? Can you collaborate in a virtual world such as Second Life or even World of Warcraft? And what if you contribute to Wikipedia? Does your organization have a strategy for “collaboration”? If so, be honest: was it driven by a business need or a technological capability? Is this a strategy for the short or the long term? Is it even possible to create a collaboration strategy for the long term? What opportunities would better collaboration inside and outside your organization bring? Could you save money or create added value? • • • • • Since collaboration is the essence of being an organization, it is a much wider concept than is traditionally discussed. The word “collaboration” in a business context has somehow shifted towards “how people work together within an organization.” Yet when we interviewed clients about how they would define collaboration, we got a wide range of answers. The one thing everybody does agree upon is that for two or more parties to collaborate, you need a common goal or deliverable. After that, all definitions are possible: it might be two people collaborating, or two companies. People can be part of the same company, or crossing company boundaries. It might be done by using paper and pencil, or it might be a completely automated process where different systems interact to reach one goal. In this book we will discuss the essence of present-day collaboration, the importance of and the new modes of collaborating. For now, we will define collaboration as: • Interaction between multiple parties (two or more); • All parties are doing work; and • With a shared purpose or goal, all parties will get something in return for their efforts; • It can be across boundaries. The shared purpose or goal does not have to be the sole thing motivating the parties to collaborate; they could also have corporate or personal goals that give them the incentive to collaborate. For example, the shared goal for a 20
Slide 33: 1 Clouds and Collaboration team of people working together might be to create the most user-friendly online banking solution, yet the personal goals of those individuals could be to work with a specific guru, to improve the world, to make promotion, to learn about the topic, etc. As long as the personal goals are in line with the shared goal, or the shared goal is part of the personal goals, collaboration can be successful. Perhaps we could say that collaboration needs “a shared goal and/or multiple compatible goals.” (We will discuss this topic more in depth in Chapter 6.) People Working with People, Business with Business Are people collaborating, or are companies collaborating? Depending on your level of abstraction, both could be happening. Ultimately, it is human collaboration that allows companies to work together: people make the connection and set up the relationship that allows two companies to collaborate. Once the connection has been made, and both parties agree on the specifics of their collaboration, the implementation will move into the realm of technology: systems working with systems instead of people working with people. The boundary between collaboration and combination begins to fade once we look at services being combined by a third party. If someone combines an online mapping service with an online statistical information service, are the mapping provider and the agency providing the statistical information now collaborating? The two services are jointly providing a solution in which they may each perform their intended function without any contact between them. Is this “collaboration” or merely “combination”? And what if the person combining the services works for one or both providers? As you see, the introduction of services that may be used from the cloud has a direct impact on how companies “collaborate” and how collaboration evolves. No Such Thing as Collaboration The examples above show that collaboration, like perhaps all relationships, is often a trade: I will do this for you, if you will do this for me. I will provide you with a certain skill if you help me with the skill I am missing. Both parties invest, and both parties get something in return. The more the goal is shared between the parties, the more we would rate their relationship towards the “collaboration” end of the scale (and perhaps no money needs to change hands). The less the goal is shared, the more their relationship tends towards 21
Slide 34: Collaboration in the Cloud the “combination” end of the scale, where one party might charge the other for contributing to the joint solution or both parties might achieve different goals through the combination. The situation is analogous to defining another company as a partner (collaboration, shared goals) or a supplier (combination, different goals). The trigger for initiating collaboration, or partnership, in this case is the realization that together something could be achieved that one party alone cannot achieve: such as providing a specific service, creating a more specialized or complex solution, or greatly improving service quality. We generally accept that in collaboration 1 + 1 = 3: I need you, you need me and together we reach a common goal, a higher goal, generate added value. Basically, within companies collaboration is the natural model (since collaboration is the essence of organization). Inter-company collaboration is a trade for the benefit of all involved. There are many scenarios for collaboration. In a business context, some are recurring situations: people within projects working together, looking outside the company for innovation, two companies creating proposals together, or multiple companies partnering to form a supply chain. Colleagues Collaborating on a Project Multiple people working together under the guidance of an appointed project manager is probably the most traditional form of explicit collaboration within an organization. Teams are formed based upon skills and (ideally) personalities. The project goals are explicit and externally defined, and the roles within the project are usually well defined. Technical support for the collaboration depends upon the deliverables of the project, but mainly email and face-to-face meetings will be used, with possibly some conference calling if the team members are working from different locations. Conferencecalling support is commonly provisioned from the cloud, using “free” conferencecalling providers or providers contracted by the organization. In projects that deliver software or some other jointly composed deliverable there will be a solution that combines the contributions of the individuals, in a format designed for contribution. Software versioning systems fall into this category, and are mostly hosted within an organization itself. Other aspects relating to team function are mostly top-down: the project manager uses task assignment and project reporting tools to assume “control” over the team. In Chapter 5, “The Anatomy of Collaboration,” you will find extensive examples of how collaboration works best when supported by all available tools. 22
Slide 35: 1 Clouds and Collaboration People collaborate because they must, because their job requires them to work with colleagues on projects, or as an ongoing process. People collaborate because they are assigned tasks that they can’t perform alone, so they are driven to collaborate with others. But there are also other reasons to collaborate. In fact, could it also be a matter of habit? Or could it simply be for fun? Think of the newer generations: the GEN-Y-ers, the digital natives, the people who grew up in a world of the internet, mobile phones and TV on demand (TiVo). They are much more collaborative from the outset: the social aspect of people gathering in an organization is becoming more important as a way to attract and bind talented people. And regardless of financial turmoil, attracting and motivating young people will be one of the challenges businesses face in the coming decade. Motivations to collaborate can be anything from personal beliefs to a longing for status to a direct need for the deliverable that is subject of the collaboration. People don’t only collaborate because they need to; they also collaborate just because it’s the natural thing to do and because it’s fun. This social aspect of collaboration is where many organizations find a lot of the value of improved collaboration. Giving people new ways to create social bonds within the organization and allowing ad-hoc collaborations gives people the opportunity to create “friends” within the company. It also potentially creates the most problems: how do we manage this, and how do we stay productive (if there is such a thing as productivity that you can measure and manage). Collaboration and Cloud Come Naturally for Digital Natives Put a team of recent graduates on a project and within five minutes they will be procuring a portal for collaboration, exchanging instant-messaging ID’s and adding one another to their Facebook pages. The team goals are important; the deliverables and communication is important, but the rest of the structure is fairly free and left to the individuals’ discretion. Commitments are deliverable-based and the team members will work whenever they feel like it: at night, early in the morning, or during regular business hours. The new expectations these digital natives bring to the employment market puts pressure on organizations looking to attract the brightest students. When support is not available from inside the company, these digital natives will procure from “the cloud.” When “the cloud” is off-limits, and there is no internal alternative, they are very likely to pack up and leave for a place where they CAN work the way they like. A higher dislike for bureaucracy, the experience of growing up during the internet-era with wonderful stories of how startups treated their employees, and an international orientation make this generation difficult to attract and to motivate. 23
Slide 36: Collaboration in the Cloud Collaboration and networking are natural – having over 200 friends is nothing special. Approaching one of these friends to get some information is the natural thing to do, and vice versa. Responding to the needs of the network is also characteristic of this generation. Free Collaboration? When people have different motivations to collaborate, how is that for companies? People can contribute to projects for many reasons, how is that for commercial organizations? Does it pay to freely collaborate? Perhaps surprisingly, on the internet “free” is often a viable business model. As with individuals, there are many different drivers for companies to offer “free” collaboration; for example, to benefit from the resulting product (e.g. in open source), to gain a marketing position or attract future clients, or to build corporate image by showing you are committed to “improve the world.” Many companies don’t expect immediate returns but act on a kind of “pay it forward”7 principle. The collaborative projects the companies enter into can also be on a wide range of subjects, from the creation of software to solving world problems, from creating books to collaboratively finding innovative solutions to industry problems. Innovation and Creation Creating a concrete deliverable together is straightforward: split up the task, contribute parts and combine them to construct the complete deliverable. Even this will take coordination and skill to accomplish, but at least it is a concrete and often measurable task. Ideation, creating new ideas together or creating “innovation” is a lot less concrete. Ideas are hard to plan, measure or manage. Yet continuous innovation is what makes a company profitable. So how does collaboration help innovation? The answer to this question lies in “crowdsourcing innovation” or “open innovation”: involving a larger than usual group of individuals in company innovation. The idea is that the wider the search for ideas, the greater the chance that good ideas will be found, the greater the chance that good ideas may be prof7 http://en.wikipedia.org/wiki/Pay_it_forward. 24
Slide 37: 1 Clouds and Collaboration itably combined, and the better the ultimate product or service. (In turn, a better product may demand a higher price). If I could enlist everybody in the world to help me solve a problem, or even just everybody on the internet, I am sure that someone out there would be able to give me a solution almost instantly. However, there is a catch: involving many more people would only be manageable if I did not have to handle coordinating and interacting with all of them. If I must personally deal with every idea, I will never find the good ideas among the not-so-good. Crowdsourcing innovation is a unique form of collaboration where anyone with a stake in a product or service can contribute to defining and improving that product or service. Consumers work with producers to create products that best serve the consumers’ needs. Employees can be invited to help improve the inner workings of an organization, but will also be challenged to come up with ways to create better value for the end consumer. Almost any creative process can be crowdsourced to benefit from the creativity of the crowd: logo design, chemical research challenges, architecture design, product development, writing and others. Innovation is not the only thing that can be crowdsourced: the production of deliverables can also be tendered to “the crowd.” The most specific example of this may be in software development where on TopCoder.com “the crowd” can build software to requirements. Collaboration with the Crowd for Innovation In a scenario where a company is looking to crowdsource parts of their research and development, the aim is to allow the best ideas and solutions to surface almost automatically. The company would achieve this by posting their challenge online and inviting people to post suggestions. Usually this is done by providing a very free-format platform where ideas can be posted, commented on by others then cataloged and rated by the people online. The creators and the people who do the rating may not be the same people, but will be part of the same community. Depending on the size of an organization, crowdsourcing can also be initiated strictly within company boundaries: not involving the general public but asking employees to take part. While the principles might be generally the same, the implementation will 25
Slide 38: Collaboration in the Cloud be different. For one thing, internet scale is different than company scale. If 1% of your internet audience responds, that is a large group of people responding. If 1% of your employees respond, it is less likely that the next greatest idea will be born. The most successful crowdsourcing initiatives involve the internet, invite the general public to contribute, and have a clearly defined “challenge.” The reward for contributing to this collaboration might be anything from “eternal fame” (if your suggestion could become the name of the latest Coca-Cola product, that might be enough motivation to take part) to a monetary award or some other incentive. The open source software community teaches us that financial reward is definitely not essential for an open initiative to succeed. An interesting example is Talpa Creative (www.talpaCreative.com) where the community is invited to help create new television formats: coming up with new ideas but also taking existing ideas to higher levels. Voting, pitching ideas and competition are part of the platform. The rewards are financial but small, and a part of the attraction is being the one who came up with the next “Deal or No Deal” or “Big Brother” show. Current crowdsourcing initiatives use fairly basic, text-based tools. User identification and user profiles are important for building credentials, while forums or discussion boards can be used to exchange ideas. At this time the use of features like conferencing, video, and instant messaging for crowdsourcing is rare. This might change over time given the fact that video is gaining ground as a medium of expression over the current text-and-images internet. 1.4 The Cost of Crossing Boundaries The two aspects that define an organization are “collaboration” and the fact that there is a boundary between the company and its environment. Ever since the internet caught on, there has been talk of it sounding “the end of organizations”: The idea is that thanks to the internet, individuals should be able to work together in the same way they could within an organization, but without the need for corporate overhead such as management and legal structures. So far this hasn’t proven true, and it doesn’t look like it will come true anytime soon. It is worthwhile to see what is happening to this external boundary: what is “inside” the company and what is “outside.” What defines you, and what sets you apart from the competition? 26
Slide 39: 1 Clouds and Collaboration In 1937, Ronald Coase wrote a treatise called The Nature of the Firm. In this book, he examines the way markets operate, and focuses specifically on the question whether a certain economic task will be performed by the organization itself, or whether it will be left to the market. For this research and other related topics, Mr. Coase eventually won a Nobel Prize over 50 years later.8 The most important question Mr. Coase tries to answer in his book is why organizations exist. Why is it not always cheaper to let the market fill a need? If an ideal free market will set the benchmark price for a commodity according to competition among suppliers, why would any company choose to hire people instead of bidding their needs to this market? Why can’t we crowdsource every aspect of every enterprise? Why does it pay to hire people and let them work “within” company boundaries instead of letting a collection of “freelancers” do the work? The answer to these questions lies in the concept of transaction costs: even IF a market were “ideal” (and more and more it seems that not all markets reach the “ideal” state), the cost of the pricing mechanism and other costs will make it too costly to tender every task to the market. Pricing costs are the costs expended to find the correct service, to negotiate a price and to buy and control the service. All this takes effort, and it makes the price of the service consumed higher than the market price of the value provided by the service. As an example, repeatedly finding a suitable programmer who will update your website with new business functionality, and reaching a new agreement with that programmer every time, will, in the long run, probably be more expensive than hiring a programmer and doing away with the constant renegotiation. The same principle is valid at all levels: the action of “outsourcing” itself is costly, thus challenging the business case for outsourcing. Ronald Coase also noted that the larger an organization becomes, the higher the “internal” cost of coordination and the risk of mistakes will become, shifting the balance in favor of the market again. He realized that companies will expand until the case for further expansion is no longer favorable. This in turn has led to the formulation of Coase’s inverse law, which states that these days any organization will shrink as long as the cost to do something inside the company is higher than the cost of doing something on the open market. If some specialized company can maintain your website at a lower 8 http://en.wikipedia.org/wiki/Ronald_Coase. 27
Slide 40: Collaboration in the Cloud cost than your own IT department, there will be a push towards moving these activities outside the organization. There is some debate as to what the impact of internet and information technology is on transaction costs. IT could perhaps add to the transaction costs, by overwhelming the buyer with information to sort through or by making it difficult to consume a specific service due to integration issues. Generally IT is believed to decrease transaction cost, making markets more efficient and making the choice to run parts of your business “as a service” more logical. For some markets, technology will bring more transparency, which will decrease transaction costs almost immediately. It will be easier to find the right service or product, find the right price and determine the right contract. In the case of cloud computing, the argument can also be made that the market will start to offer more and more granular services that challenge the assumption that “internal is cheaper than external” on many new levels. With changing transaction costs and new services being offered on the market, any organization that needs to be competitive will be asking, “why are we a company” and “should we do this ourselves.” This is the reason why companies are partnering and collaborating in value chains: to find the right balance between transaction costs (between the parties collaborating) and internal cost. Serving Clients Together A very specific case of collaboration that occurs regularly is when two parties partner to create a joint proposal. The two partners are trying to offer a solution or product that could only respond to the need with the input of both parties. Responding to requests for information or bidding for contracts are situations where, under great pressure, people from multiple companies try to create a winning proposal. The best proposals are created when both parties share a vision of the end result and there is a tight team working to combine the assets of both companies. Tools used are mostly email (a sad reality is that this is probably still the most-used tool in these cases), portals and conference calls. Usually there is a trigger-and-response system to find the best solutions (“Does anyone know of any solution to this problem…”) and a strictly coordinated effort to compose a coherent deliverable (“You are responsible for answering questions 1 and 5”). The process tends to start in a more free-format style (solution visioning) and become more practical towards the deadline. For more complex proposals, a project management tool will be used to track progress and dependencies. 28
Slide 41: 1 Clouds and Collaboration It is interesting to note that the people working together in these joint proposal teams usually work as individuals, all trying hard to create a winning deliverable. Later in the process, the legal department and management will take a more “corporate” role and look at the partnership and contract side of the collaboration: is what we are offering balanced, who gets what, and how will we deliver together. If both parties are equal partners, it raises the question of who will support the collaborative tools. There is a good case to be made for using a third party provider (in the cloud), thereby allowing both parties equal access. Competition in Government? But what if you are working for the government? Are you competing, too? Not surprisingly perhaps, yes. While in any government agency there might be little or no competition at the highest level, at many other levels there is competition. There may be competition between agencies to win execution tasks (and corresponding budget allotment), and there may also be competition with the open market. The responsibility for national defense may rest solely with the state, but supporting the HR for the employees who work in defense could be open for competition on an open market. Providing social security might be the responsibility of the government, but printing and mailing monthly statements could be performed by parties outside the government. (And at any time, if the transaction cost of outsourcing becomes too high, the government may decide to start competing: if we can do it cheaper in-house, we will.) The Reality of Crossing Boundaries Cloud and cross-boundary collaboration are a natural fit: if information is flowing between companies, using a third-party provider will be a logical step. The old marketplaces and business hubs were precursors that led us to realize that whenever we work together, we do it outside the boundaries of both organizations. If we want to involve multiple parties, the trust and identity issues can sometimes be solved more easily in an impartial forum. There are some thorny questions related to the cross-boundary aspects of cloud and collaboration. Most of these have to do with the fact that corporate data may also reside outside the corporate domain, leading to questions about con- 29
Slide 42: Collaboration in the Cloud fidentiality, corporate governance and traceability. Also, as the maintenance and operation is outside your control, reliability and recoverability demand extra attention. Evidently some data is best NOT left to the cloud, and some scenarios are still best run from your own software. This means that organizations will adopt a mixed model where a combination of software and services is used to create the best, and most reliable, support for the end-user. The decisions as to what may go to the cloud and what should remain on-premises are based upon the issues described, but also upon a more strategic question of an entirely different caliber: namely, what is your competitive advantage? 1.5 Conclusion Cloud computing has become one of the scenarios for provisioning IT. It is attractive on many levels, but it also has some intriguing and thorny issues associated with it. Collaboration is the essence of an organization, and has been traditionally under-supported by technology. Cloud computing and collaboration offer a combination where the actual use is paramount, putting the user back in control, and where boundaries are no longer obstacles. In the following chapters, we will examine the trends that shape contemporary business reality and we will see how collaboration on a grand scale has an impact on how organizations evolve. Topics such as technological discoveries, competition versus collaboration, and transparency will be covered, and we will discuss the new nature of the firm. 30
Slide 43: Case Stimmt AG Case: Stimmt’s Jump to SaaS-Powered Collaboration Helps Consultancy to “Practice What it Preaches” Collaborating in the Cloud an Ideal Strategy for Small Consultancy In no sector has collaborative business supported by Software as a Service been embraced more enthusiastically than among small businesses. A look at the SaaScollaboration strategy adopted by Stimmt AG, a 15-person Swiss consulting firm specializing in user interfaces, shows why. The company was struggling with a Lotus Notes platform that had to run on a mix of Windows and Mac laptops, requiring almost constant maintenance. And the fact that Stimmt’s employees often work from their homes or from customer sites, requiring time-consuming replication of Notes data, made supporting the Notes infrastructure a bigger burden than a small firm like Stimmt could shoulder. Moreover, there was little hope of collaborating with customers remotely. When management finally deemed the situation untenable in 2007, it considered two options: a fully managed centralized IT environment hosted by a third party, or a browser-based SaaS approach. Eventually, Stimmt selected the SaaS path for a few reasons. Not only was the pricing more attractive, but Stimmt would benefit from constant, and seamless, updates to whatever tools it selected, and SaaS applications would afford employees the most flexibility in creating their own work environments. Suite of SaaS tools Delivers Flexibility and Simplicity With the decision made to standardize on SaaS applications, Stimmt chose a few strategic tools that have become its de facto computing platform. Google Apps are used for email and calendaring; an on-demand version of Confluence Wiki enables internal and external collaboration, data storage, and the creation of real-time executive dashboards; Genius Enterprise Project supports project management; and Longjump, a lower-cost alternative to Salesforce.com (less than one-sixth the monthly subscription fee per user), serves not only as Stimmt’s CRM system, but also as an on-demand application development platform that allows the company to build its own on-demand apps. All of these tools are accessible to employees wherever they are through a browser, and access to collaboration workspaces is easily provided to customers. If it sounds to security-obsessed technology executives like Stimmt threw caution to the wind, to an extent it did – by its own design. Founding Partner Lukas Karrer was confident that once the data was stored in this array of cloud applications, he could trust the selected vendors to ensure the safety of Stimmt’s data. With employees given a fixed budget to choose their own hardware and establish their own remote 31
Slide 44: Collaboration in the Cloud infrastructures, he didn’t feel there was any need to worry. “All they need is a working browser,” says Karrer. “I don’t care about the rest. I don’t really care about the laptops or desktops our employees use. I don’t care about the backups of the employees’ laptops, because everything is in the cloud.” There were no setup costs for starting the various application subscriptions. It took Karrer and one employee just two weeks last December to complete the whole migration process, extracting the most important data from Notes and importing it into the new tools, then configuring the tools to meet Stimmt’s basic needs. Karrer estimates the company invested about € 5,000 and 20 full days of employee time adjusting and customizing the tools to suit the firm’s business processes. He continues to devote about one day a month to managing those customizations. Elegant Environment Boosts Employee Morale, Impresses Customers The results of Stimmt’s SaaS/collaboration strategy have been transformative. The company’s newfound mobility allows data access from any location. The scalable business environment makes it a snap to add new people, and subscriptions can be added or canceled on the fly. The company is getting more work completed, and it’s doing so more simply and efficiently. And all this added functionality hasn’t forced any additional technology spending. “I didn’t reduce IT costs, but I greatly enhanced functionality, and I greatly enhanced usability for our employees and clients,” says Karrer. Adoption hasn’t been an issue. The staff had grown so frustrated with Notes that team meetings had digressed into a stream of complaints about the company’s technology. Employees have embraced the new suite of tools, and the complaining has ceased, causing an ecstatic Karrer to proclaim, “Morale has skyrocketed.” That’s not to say there haven’t been lessons to learn along the way. Karrer says he’s seen that some SaaS vendors seem reluctant to evolve from the shrink-wrapped software mentality. They need to adjust their approaches to service-level agreements, and be quicker to incorporate customer feedback given the inherent flexibility of their products. But he’s also learned that SaaS enables him to be much more experimental, as correcting mistakes is much simpler. Perhaps the best – and most unexpected – result is the feedback from Stimmt’s customers, who are all in awe of the elegance of the firm’s technology environment. It’s an ideal image-builder for a company that specializes in helping clients design usable interfaces. “They can see that it’s so easy to work with these tools,” says Karrer. “You’ve got to practice what you preach.” 32
Slide 45: 2  The Impact of Technological Revolutions 2.1 Introduction We have seen that there is considerable pressure on companies to improve performance, especially in this economic climate. In this book we are looking at collaboration, the very essence of organizations, and cloud computing, which is a model for provisioning technology. So how does technology help business, and how does business benefit from changes in technology? In this chapter we will show what the effect is of technological revolutions, and we will demonstrate that these are indeed special times that warrant a closer look at collaboration. Management guru Peter Drucker (1909–2005) was originally a writer. In 1943, he was asked by the management of General Motors to report on workfloor practices. However, numerous employees kept a wary eye on Drucker. They greatly mistrusted him. They were especially worried about what he might say to management behind their backs. Surely, this could only have negative consequences? To gain their cooperation, Drucker promised them that all his observations would appear in book form. The tale of the work floor would therefore not be mindlessly filed away in a report. In the end, the publication resulted in his bestseller, The Concept of the Corporation, a book in which Drucker elaborates his far-reaching ideas about decentralized decision-making. Peter Drucker was a visionary, someone who was far ahead of his time and one of the few who had a clear perspective on the future of companies. Many other works have come from his pen over the years. The central concern of his writing remains the manner in which management has to change its decision-making practices by placing progressively greater trust in the observations and decisions emanating from the work floor and streaming up to the organization’s higher layers. Such changes in management thinking are often underpinned by technological innovation. Drucker elaborated on 33
Slide 46: Collaboration in the Cloud these ideas in his 1993 The Post-Capitalist Society,1 encapsulating them in the following statement: Every few hundred years in Western history there occurs a sharp transformation. Within a few short decades, society rearranges itself; its worldview (paradigm), its basic values, its social and political structures, its arts, its key institutions. Fifty years later there is a new world. 2.2 The Delicate Balance Between Technology and Community Technology changes society. This mostly occurs in very small ways, which are nearly imperceptible, but sometimes they are ground-breaking and immense, turning the entire world on its head. Such upheaval occurred with the introductions of the train, car, airplane, steel industry and steam engine. Each had an enormous and revolutionary impact on society. We are now, once again, standing on the verge of a fundamental transformation, a paradigm shift (such as it is elegantly labeled) that will change the world as we know it for good. The internet and its underlying technology are responsible for this radical upheaval. The way in which we search for information and share it with each other has changed; online search engines and Wikipedia have become the accepted instruments for this activity. Listening to music is now a different experience than it has been in the past. No longer do we collect vinyl records or plastic CDs; now we use online stores in order to place our music collection of thousands of songs on our portable mp3 players. Hyves, MySpace, Facebook, Twitter and FriendFeed are the new ways of briefly communicating with each other. These social networks have replaced what has now become traditional email. We no longer buy books in the bookstore but acquire them from Amazon. We set up our own store with the help of eBay. And some time ago we stopped watching television by sitting in front of a colored screen at a scheduled time; instead we individually click on our favorite programs at YouTube, use TiVo, the TV station’s website or download them (often illegally) from peer-to-peer networks. 1 Peter F. Drucker, The Post-Capitalist Society, 1993. 34
Slide 47: 2 The Impact of Technological Revolutions The Convergence of Knowledge Compared to previous technological revolutions, there is one big discernible difference: current technology is causing various areas of knowledge to merge. The exact consequences of this fusion are still unknown, but it is certain that these effects will be felt by people, companies and organizations in general. Our entire society is affected. Computer Science Economics Web Engineering Mathematics Artificial Intelligence Law Psychology Socio-cultural Biology Sociology Media Ecology Figure 2.1: Web Science Research Initiative Map of Fields of Knowledge Figure 2.1 comes from the website of the Web Science Research Initiative,2 set up by World Wide Web founder Tim Berners-Lee. This organization aims to chart the ways in which the internet is changing our society, and it does so by examining how various fields of knowledge are unifying. One of the direct consequences of this evolving merger of knowledge is that we are rediscovering people, members of society with whom we lost touch long ago. Long before the industrial revolution, the farmer and the baker knew precisely what they might expect from each other. The farmer worked the land and the flour from his harvested grain ended up at the baker, who then baked the farmer’s bread. If the farmer were not satisfied with the taste 2 http://webscience.org. 35
Slide 48: Collaboration in the Cloud of the bread, he would complain directly to the baker in order to have him modify the recipe. The interaction was an entirely simple form of collaboration based on direct communication. The industrial revolution’s fascination with maximum efficiency made sure that people only worried about their own tasks and never, or seldom, got together to deal with all the types of problems on the work floor. The balance between technology and community was disturbed so that it tilted to the advantage of technology. As the German thinker Karl Marx astutely states in his book Das Kapital (1867): In handicrafts and manufacture, the workman makes use of a tool, in the factory, the machine makes use of him.3 As a direct consequence of this change, people grew distant from one another. This dissociation undoubtedly presented business operators with an enticing opportunity. In gaining control over the new technologies, they could seize power and inflict their whims and fancies on their customers. Companies could impose their will on consumers by claiming to know what was good for them. The first assembly line, enabling Henry Ford to sell an enormously large number of cars, is a perfect example of this thinking. In a sense, he invented the wheel. Internet technology is shifting the manner in which companies and people communicate and collaborate with each other back to the more even keel that we had previously enjoyed. Consumers are being taken more seriously. Their voices are being heard. Once again, there is a dialogue between both parties, between producer and consumer. The prosumer – a term launched by Alvin Toffler4 to describe consumers who can fill their own needs using technology – is a consumer who counts. Consumers are Demanding Unique Experiences For some time now, consumers have no longer been fixated on mere possessions but have become concerned with total and unique experiences. Consumers are demanding a say in the processes that ultimately yield goods or 3 4 Das Kapital, pt. IV, ch. 13. sect. 4. http://en.wikipedia.org/wiki/Alvin_Toffler. 36
Slide 49: 2 The Impact of Technological Revolutions services. The system is the product.5 Consumers strive to play a part in this process of collective value creation. A product, service or brand must be customized so that it contributes to their personal identity. Call them the “weapons of mass collaboration.” These changes, among others, are ushering us toward a world where knowledge, power and productive capability will be more dispersed than at any time in our history – a world where value creation will be fast, fluid and persistently disruptive. A world where only the connected will survive. A power shift is underway, and a tough new business rule is emerging: harness the new collaboration or perish.6 We are discussing collaboration and technology. In particular, we talk about the ways in which technology can be used to facilitate collaboration, not just among people but also among companies and even applications. As indicated above, technology is causing us to enter a new phase in collective interaction, changing our society for good. To properly understand what this new form of collaboration looks like, we will first examine the past and study the consequences that a new technology has for people, commercial companies or any other kind of organization. 2.3 Technology’s Poisoned Chalice The introduction of new technology always generates resistance. In the beginning, a discovery is only embraced by a small group of people. When more and more people adopt the technology, the “tipping point”7 is ultimately reached and the technology becomes commonplace. For a technology to be widely accepted it must first overcome several hurdles. The introduction of a new technology renders another technology obsolete. The companies that were profitable as a result of this older technology will not easily give up their market share, sticking to old technology and inhibiting innovation. Every innovation also has its advantages and disadvantages, some of which are not always readily foreseeable and only become discern- 5 6 7 http://richardsona.squarespace.com/main/2006/6/15/motorola-q-snatching-defeat-from-the-jaws-ofvictory2.html (see also Chapter 3). Don Tapscott, Wikinomics: How Mass Collaboration Changes Everything, 2006. Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference, Little Brown, 2000. 37
Slide 50: Collaboration in the Cloud ible at a later stage. One of the first people to reflect on the negative consequences of new technologies was the philosopher Socrates. Legend of King Thamus and the God Thoth About 370 years before the Common Era according to the Western calendar, Greek philosopher Plato (427–347 BC) committed to papyrus his account of a dialogue between his teacher, Socrates (470– 399 BC) and a certain Phaedrus. In this dialogue, Socrates discusses the legend of King Thamus and the god Thoth, who was renowned as a great inventor.8 According to the Egyptians, Thoth was the founder of knowledge, religion, philosophy and magic. The Greeks later added an even more impressive list of discoveries. According to them, he alone Figure 2.2: Thoth8 was more or less responsible for the origins of all fields of knowledge, including astronomy, astrology, mathematics, geometry, medicine, theology, reading and writing. All these disciplines were said to have sprouted from Thoth’s brain. Thoth did not want to keep all knowledge to himself. He wanted to share it with humanity. In an audience with King Thamus, he tried to convince the king of the virtue of his latest discoveries. Thoth was especially enthusiastic about writing. According to him, writing would improve both the memory and the wisdom of the Egyptian people. To the god’s dismay, the king showed no interest. In fact, he said to Thoth: Most ingenious Thoth, one man has the ability to beget arts, but the ability to judge of their usefulness or harmfulness to their users belongs to another; and now you, who are the father of letters, have been led by your affection to ascribe to them a power the opposite of that which they really possess. For this invention will produce forgetful8 Source: http://www.philipcoppens.com/thoth_01.jpg. 38
Slide 51: 2 The Impact of Technological Revolutions ness in the minds of those who learn to use it, because they will not practice their memory. Their trust in writing, produced by external characters which are no part of themselves, will discourage the use of their own memory within them. You have invented an elixir not of memory, but of reminding; and you offer your pupils the appearance of wisdom, not true wisdom, for they will read many things without instruction and will therefore seem to know many things, when they are for the most part ignorant and hard to get along with, since they are not wise, but only appear wise.9 The legend of King Thamus and the god Thoth does not just present the positive or negative consequences of writing. It also draws attention to the possible destructive impact of technology on communities and on humanity in general. A new technology can either provide a community with an enormous boost or bring about its immediate destruction. Technology is a Tyranny In recounting this tale, Socrates anticipates the ideas of French sociologist, philosopher and theologian Jacques Ellul (1912–1994), who published a book called La Technique ou l’Enjeu du Siècle in 1954 (the English title is The Technological Society). In this work, Ellul explains how he regards technology as an element that disrupts society. In his eyes, technology is a tyranny for humanity. What we are witnessing at the moment is a rearrangement of the world in an intermediate stage; the change is not in the use of a natural force but in the application of technique to all spheres of life. Technology Leads to Self-Amputation The prophet of our electronic age, Marshall McLuhan (1911–1980),10 made a similar pronouncement in 1964 when he coined the maxim “the medium is the message.”11 According to McLuhan, the content of the message is not very important. Rather, the underlying technology (the medium) has far more Phaedrus 274e-275b in Plato, Plato in Twelve Volumes, Vol. 9 translated by Harold N. Fowler. Cambridge, MA, Harvard University Press; London, William Heinemann Ltd. 1925. 10 Hans Achterhuis labels McLuhan as the “prophet of our electronic era” in his series of lectures Mensbeeld en techniek (“Portrayal of man and technology”), ninth Socrates lecture, 1992. 11 Marshall McLuhan, Understanding Media: The Extensions of Man, McGraw Hill, 1964. 9 39
Slide 52: Collaboration in the Cloud significant consequences for the proximate surroundings: “We shape our tools and thereafter our tools shape us.” In McLuhan’s view, technology is an extension of the human body. For instance, the car has replaced people’s feet. Thanks to the car, we are able to move from A to B much more quickly, while also being sheltered from a heavy downpour. Increased mobility and comfort are certainly two of the most evident advantages of using a car. Unfortunately, technology also has disadvantages. When a technology is used excessively and even to the point of overuse, it results in a form of “selfamputation” that unquestionably has negative effects. In the case of the car, driving has led to less walking, reduced muscle strength in the legs and correspondingly augmented problems in relation to health and obesity. The number of fatal and non-fatal accidents has also consequently risen due to motor-vehicle use. And the air we breathe is contaminated by the large quantities of exhaust spewed out by the internal combustion engine, giving rise to all types of lung disease. Technology does not therefore only affect us as individuals but it has consequences for the community as a whole. 2.4 Six Technological Revolutions Technology has a large impact on people and organizations (commercial or any other kind) and therefore on society at large. An uneasy equilibrium exists between technology and community. In the past, the effects of new technologies on society have been studied by various researchers. One of the first scholars devoted to this field was the Russian economist Nikolai Dmitriyevitch Kondratiev (1892–1938).12 At the beginning of the twentieth century, he investigated the relationship between the price of goods and investment behavior. His research, based on data from the period of 1789 to 1922, revealed a series of four wave movements in the economy, each with its own peak and valley, boom and bust. Strikingly, these trends displayed consistent features, each of the cycles encompassing a period of fifty to sixty years. 12 See http://en.wikipedia.org/wiki/Kondratiev_wave. 40
Slide 53: 2 The Impact of Technological Revolutions Kondratiev announced his findings to the world in The Major Economic Cycles, a book published in 1925.13 His research clearly demonstrated that the waves were based on the accumulation of fundamental innovations, each underlying a corresponding technological revolution. Technological development was not evolutionary but revolutionary, as it occurred in jumps associated with fundamental transformations of industry and the economy, which affected all of society. His insights, which were controversial at the time, did not earn him any gratitude. In 1938, Josef Stalin gave the order for the scholar’s arrest, and he was executed shortly afterwards. P R D E Kondratiev I 1800 P R D E 1850 II 1900 III 1950 IV 1990 V Figure 2.3: Kondratiev Wave14 A fifth wave has since been detected, and there are now five identifiable historical trends:15 • The first boom period approximately encompasses the years from 1780 to 1815, an era that saw basic innovations in the textile industry, the use of water power, and the construction of ports, canals and paved roads. • The second peak more or less coincides with the period from 1845 to 1875 and involves such basic innovations as the railway, gas lighting and the telegraph. • The third upswing roughly covers the years between 1890 and 1916, involving innovations in the electronics and automobile industry, as well as the emergence of chemistry. 13 N.D. Kondratiev, The Works of Nikolai D. Kondratiev, Pickering & Chatto Ltd., 1997. 14 Source: http://upload.wikimedia.org/wikipedia/commons/d/d4/Kondratieff_Wave.gif. 15 Source: “ESB no. 4245,” p. 171; article by Alfred Kleinknecht, professor of innovation at Delft TU. 41
Slide 54: Collaboration in the Cloud The fourth surge corresponds to the postwar period of 1944 to 1985 with its rapid proliferation of long-lasting household consumer goods. The fifth wave, which will likely cover the period from 1995 to 2020, is driven by the innovations involved in numerous IT applications. • • Britain Britain Britain, USA, Germany USA USA USA?, Europe? Both?, Other? 1771 1829 1875 1908 1971 20?? ‘Industrial Revolution’ Age of Steam, Coal, Iron and Railways Age of Steel and Heavy Engineering Age of Automobile, Oil, Petrochemicals and Mass Production Age of Information Technology and Telecommunications Age of Biotech, Bioelectronics, Nanotechnology and New Materials? Each Revolution takes 40 to 60 years to spread across the world and reach maturity. Each begins in a core country. Figure 2.4: Five Technological Revolutions in 240 Years A great more detail about these five technological revolutions is provided by Carlota Perez in her book Technological Revolutions and Financial Capital.16 Her work is strongly influenced by the great economist Joseph Schumpeter,17 who was well known for his theory about Creative Destruction (the fact that the old ways of doing things are endogenously destroyed and replaced by new ways). Perez even adds a sixth revolution: the approaching revolution that will be brought about by bio- and nanotechnology.18 Technology Changes Ways of Collaborating A technological innovation requires time in order to become commonplace in a society. In the beginning, only a limited group of people will use a given technology. Only time will tell whether this technology will or will not be 16 Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, Edward Elgar Pub, 2003. 17 http://en.wikipedia.org/wiki/Joseph_Schumpeter. 18 Source: http://www.slideshare.net/connectedurbandev/2-zz-carlota-perez-cud-lect-defdef. 42
Slide 55: 2 The Impact of Technological Revolutions embraced by everyone. That is why all technologies have their own adoption curves. Product Performance Quality Surplus Unfulfilled Needs Technology ‘Good Enough’ Desired Level of Performance for Average Consumer High Technology Consumer Commodity Time Percentage of Consumers Early Adopters Late Adopters Tipping Point Time Figure 2.5: Adoption of Technology by Consumers19 When a technology catches on, there is a chance that it will transform an entire society. But a technology only has such an impact once every fifty to sixty years. On these rare occasions, it is not only society that is impacted, but the manner in which people are accustomed to working together is also radically transformed. In “Why the Demise of Civilization May Be Inevitable”,20 Deborah Mackenzie gives some thought to the ways in which society is changed by technology. 19 Source: P. Bosker and M. Boreel, Van Horen zeggen naar Willen hebben, VINT 2000. 20 Deborah Mackenzie, “Why the Demise of Civilisation May Be Inevitable,” New Scientist, April 2, 2008. 43
Slide 56: Collaboration in the Cloud Figure 2.6 displays a number of diagrams representing the ways in which collaborations evolve. Hunter-Gatherer Early Civilisations Industrial Revolution Hybrid Networked Figure 2.6: The Changing Shape of Society Figure 2.6 makes it clear that two types of collaboration are dominant. The traditional hierarchical forms, such as those that came into vogue with the industrial revolution, and the network form which is now coming into use as a consequence of the emergence of the World Wide Web. In terms of time, we are currently in a transition phase in which companies are mostly adopting hybrid forms. To understand the manner in which collaboration has evolved over time and the ways in which collaboration is now being re-examined, the following sections will reconsider two important economists who were responsible for the development of the very first corporate structures and the modes of collective work adopted within the walls of these organizations. The Invisible Hand of Adam Smith Traces of an evolutionary theory based on natural selection can already be found in early works on the economy. The magnum opus of economist Adam Smith (1723–1790) entitled An Inquiry into the Nature and Causes of the Wealth of Nations uses something akin to natural selection to explain the workings of the free market. This book was first published in 1776, just after the start of the industrial revolution. 44
Slide 57: 2 The Impact of Technological Revolutions In the view of Adam Smith, the interests of the individual do not come before the interests of the collective. To his mind, collaboration occurs automatically. One person works as a farmer, the other as a baker. Together, they help each other earn their livelihood. Working together comes naturally. It manifests the effects of the “invisible hand.” Taylorism Frederic Winslow Taylor (1856–1915) was the first person who emphatically departed from this manner of collaboration, which people had known for centuries. He let go of Adam Smith’s invisible hand and took up the part of the rigidly organized system in which employees were given little latitude. Money Makes the World Go Around21 Taylor was born in 1856 in Germantown, a part of Philadelphia, Pennsylvania. He grew up in an affluent family and was not surprised about the fact that there were different classes of people in the world. When he reached the age of twelve, his father took the entire family to Europe for a trip lasting three years. Such a European tour was not unusual for wealthy people at the time.22 During this tour, Taylor learned for the first time about Figure 2.8: Frederic the ways in which money can be employed as a means to Winslow Taylor22 influence another person’s behavior. In crossing the high mountains of the Alps, the family was stranded in the village of Finsterminz.23 The local bridge had been largely swept away, preventing access to the pass. Over time, the local population had made a few half-hearted attempts to reach the pass, none of which went very far. The family would have been unable to complete its crossing of the Alps, except that failure was not a part of the vocabulary of Frederic’s father. Pulling out his wallet, he was able to motivate the residents of the village so that the entire family and their baggage was on the other side of the pass the next day. Figure 2.7: Adam Smith 21 Line from the song “Money, Money” in the musical Cabaret. 22 Source: http://en.wikipedia.org/wiki/Image:Frederick_Winslow_Taylor.jpg. 23 Source: http://www.pillowrock.com/ronnie/fwtaylor.htm. 45
Slide 58: Collaboration in the Cloud I have you for your strength and mechanical ability, and we have other men paid for thinking. In 1911, Taylor published his revolutionary ideas about management. In his book The Principles of Scientific Management, he explains how business processes must be managed in a scientific manner in order to promote standardization and efficiency. His theories presented companies with the means of skewing the balance of power in their favor. The manner in which consumers and “producers” had been accustomed to dealing, and working, with each other was consequently brought into question. The Film Modern Times Although Taylor’s original objectives where quite idealistic, a great deal of opposition was mounted against his theories. Putting them into practice required a far-reaching division of labor with little concern for people’s social needs. The result was increasing self-alienation (the top layers of Maslow’s pyramid no longer being attainable) and alienation from the end product.24 One of the best known critical views of such relentless industrialization is undoubtedly the black and white movie Modern Times by Charlie Chaplin. In this movie, Chaplin plays 24 Figure 2.9: Modern Times his trademark character the little tramp, who this time is an assembly-line worker being subjected to the torments of the modern machine. It is interesting to note that the idea for this movie was taken from a journalist who told Chaplin about the depressed assembly line workers in a factory in Detroit. Industrial Revolution The industrial revolution caused the balance (the market equilibrium) in the demand and supply model to shift in favor of producers. The use of machinery enabled organizations to grow in size and scale, allowing them to serve more customers simultaneously. The process caused employees to lose touch with their end customers. Since they were cut off from direct feedback, they 24 Source: http://en.wikipedia.org/wiki/File:Moderntimes.jpg. 46
Slide 59: 2 The Impact of Technological Revolutions had to rely on others who were closer to customers to coordinate the effectiveness of their efforts and to indicate how they might better satisfy customer wants. The previous intimate collaboration between producer and consumer began to fracture and eventually fell apart. Producers no longer had their ears attuned to their customers but took control themselves. From then on, producers of goods and services assumed that they best knew what consumers wanted. Deploying the resources of various mass media (newspapers, radio and television), they imposed their will on consumers and were able to manipulate them into making purchases. After all, producers felt that they knew best. They very well knew (or so they thought) what consumers wanted and how these wants were to be satisfied. Efficiency With the growing size of organizations and resultant division into departments and duties, employees became increasingly further removed from the ultimate end product. The entire business process was directed at the most efficient realization of this good or service. As a result, employees had to specialize in order to take responsibility for just one small task. Employees were seemingly turned into nothing more than cogs in a machine, small replaceable parts to be thrown on the scrap heap when expended. Everything and everyone was placed in service of the end product, while any interests of the individual were subsequently disregarded. This change on the work floor reduced the feeling of responsibility that workers had felt for the quality of the end product. They also became increasingly alienated from co-workers and even from their own sense of self. The overview of the entire business process was more difficult to maintain, making it no longer possible to intervene when calamities occurred. Likely Jacques Ellul, the above-mentioned French sociologist of technology, had this in mind when he coined the term “soulless efficiency.” The inescapable conclusion is that the effort to realize the advantages of scale and efficiency caused workers to lose contact with customers. To put it simply, there was no longer any time for collaboration between producer and 47
Slide 60: Collaboration in the Cloud consumer. The essential input enabling the craftsmen of former times to be (largely) self-directing was missing, and the corresponding expansion of the management class therefore became inevitable. 2.5 Conclusion Throughout history, we encounter various forms of collaboration both inside and outside organizations. Technological innovations often underlie the transition from one form to another, these revolutions disrupting the balance between old and new, between technology and the community. Thanks to the World Wide Web, we have again entered a transitional phase. More and more companies are abandoning centralized, hierarchical organizational forms and are switching to a model that uses decentralized network structures even extending beyond company walls. Another catalyst for this change is the fact that, in contrast with previous transformations, diverse fields of knowledge are now undergoing a process of convergence. For the first time in human history, everyone has nearly unimpeded access to all information. The resulting impact of the internet on society is therefore larger than anything previously experienced and consequently distinguishes the present from all previous phases (i.e. technological revolutions). The following chapter will further explore the effects that the new technology is having on society, companies and humanity in general. A distinctive feature is that all parties are virtually unable to hide anything anymore – NO MORE SECRETS! We are entering an age in which transparency, openness and cross-boundary collaboration will be crucial for the continued existence of companies. 48
Slide 61: Case REAAL Verzekeringen Case: REAAL Verzekeringen Turns to Collaboration as It Contends with Seismic Changes in Its Business Wholesale Evolution of Channels Pushes Company to Work Differently After nearly 120 years in business, REAAL Verzekeringen, the €4 billion-a-year insurance arm of Dutch financial services group SNS REAAL, has seen a profound shift in the way insurance is delivered. The traditional approach of relying on brokers as the main distribution channel is giving way more and more to web-based self-service, sales through larger partners who offer complementary services, and growing opportunities as a value added service sold by SNS REAAL’s banking unit. The face-to-face relationship between brokers and consumers is being replaced by electronic channels, and that means the services that are so crucial to an insurance company – such as providing quotes and processing claims – are increasingly reliant on technology for their delivery. Because REAAL acquires Insurance companies to spur growth, it also needs to speed up the process of integrating acquired companies into its infrastructure. That means the technology has to enable the collaborative processes that support such key business activities. Throw in the fact that growing numbers of employees are working from home, and all these processes have to be extended to support coordination among multiple locations. This fundamental transition has highlighted the need for REAAL Verzekeringen to look for new, more efficient ways to get things done. Specifically, it is injecting collaborative technologies into its business processes. The company needs its employees to be able to more effectively brainstorm new products, coordinate cross-selling efforts and process claims, so the company is supporting its employees in these efforts by making it easy for them to share information and knowledge across organizational and geographic boundaries. It also wants to provide an external collaborative environment where it can work with partners to efficiently pair products and services. Enabling a “New Way to Work” To accomplish this, REAAL has initiated a broad initiative to achieve the “New Way to Work.” In this initiative, there are many projects that will change and improve the way REAAL works. It will change the way in which people work together, and how the company will innovate. The program addresses anything from the physical environment (buildings, physical workspace, etc.) to the social and HR aspects. A relatively small but important part of this broad initiative addresses the technology used to collaborate. For this part, REAAL turned to Microsoft technologies (SharePoint/ Office Communications Server). It embarked on this three-year effort to establish a 49
Slide 62: Collaboration in the Cloud collaboration infrastructure six months ago, when it made an early incarnation of its SharePoint environment available to a strategic project group of 250 employees. The company has 10-15 people working on a daily basis, in conjunction with consultants and experts from Microsoft, to flesh out the design of an environment that will support all of SNS REAAL’s 7,000 employees. Plans call for the first full implementations to start rolling out in the first half of 2009 with pilots centered on departmental groups of 80-100 people. Barring unforeseen problems, REAAL intends to proceed with a larger-scale rollout later in 2009 and into 2010–2011. Potential Internal and External Benefits Becoming Apparent Early indications of the impact of this technology haven’t done anything to slow the effort, says Kees Tuijnman, enterprise architect at REAAL. One of the benefits Tuijnman sees is that the technology is already enabling improvements in the information flows. The resulting benefits have fueled optimism for what the results of the overall program will do for the company. The IT department, which was an early adopter of some of the elements of this “New Way of Work,” was also among the first to see what can change. For instance, IT relies upon a structure in which employees with similar skill sets – such as software development or design – are grouped together. That makes it difficult to transfer those skills between groups. The new technology and new focus on collaboration helps IT to work in virtual teams in which the various skills are clustered together, making IT projects a more collaborative pursuit. As the program is introduced throughout the company, the effects are expected to become visible, including cost reduction, productivity improvements, more effective talent acquisition, more efficient knowledge sharing, and a boost in employee satisfaction. The company is not only looking to improve the internal workings of the organization but is also extending their vision to external collaborators. “We have a number of large distribution partners with whom we connect selling processes and work on innovation,” says Tuijnman. “We want a better exchange of ideas, and a way to implement those ideas into new products.” 50
Slide 63: 3  The New Nature of the Firm 3.1 Introduction In the previous chapter, the ambiguous role of technology was discussed in light of several converging trends. We saw that these trends spell great changes that only happen every fifty or sixty years. In this chapter, we will bring the discussion closer to the organization and explore what competition and collaboration look like, and how they could change. We will see how collaboration might in some cases even take the place of competition, changing the essentials of survival and competition forever. Life is one long struggle, wherever you look. Elements of competition are to be found everywhere. The survival drive is not only deeply rooted in the animal kingdom around us but it also permeates our own society. Of course, it is most evident in the area of sport, but we also find it in politics, religion, education, the business community and language (good-better-best). And even in art! Why is one painter a great master and another one not? In this environment there is always the urge to score or to exhibit that you are better than others, often at the cost of others. There are good reasons behind the impulse to kill or be killed! One of the first persons to study this phenomenon in detail was the biologist and naturalist Charles Darwin (1809– 1882). The Voyage of Discovery on Board HMS Beagle Charles Robert Darwin first became interested in science during his medical studies in the Scottish city of Edinburgh, which he discontinued after two years. His father then sent him to Cambridge to pursue religious studies. While in Edinburgh Darwin had developed an interest in animal life. One of his great passions was to collect and categorize all types of beetles. At Cambridge, he was given the chance to pursue his passion by taking courses in botany and geology, in addition to studying theology. 51
Slide 64: Collaboration in the Cloud At the end of 1831, Charles Darwin obtained a position as a naturalist on the British naval ship HMS Beagle. His task would be conducting geological research on South-American coastal regions. After convincing his father about this unique opportunity, he was given permission to interrupt his study, enabling him to depart on the Beagle from Plymouth harbor on December 27, 1831. The boat was commanded by Captain Robert Fitzroy (1805–1865), who had been given the task of surveying the southern point of South America in more detail. The commission was expected to take two years. However, the trip lasted longer than expected. The voyage included visits to New Zealand, Australia and South Africa, in addition to South America. The ship didn’t return to England until 1836, five years after its departure. When he departed, Charles Darwin was only 22 years old. No one could have suspected what an enormous impact he would have on the history of humanity. It was on board the Beagle that Darwin was inspired to formulate his theory of how evolution works via natural selection, which is still considered one of the most important scientific works ever written. Figure 3.1: Charles Darwin1 How a Finch Explains Human Evolution The Galapagos Islands, an archipelago off the west coast of South America, played a crucial role in the creation of Darwin’s theory. To Darwin’s surprise, different species of finches were living on the various islands. How was it possible that such great diversity could have arisen among these finches when the islands lay so close together? Since it could be assumed that the birds flew from island to island in their search for food, distinctions among the birds should not occur. Yet, observa1 Source: http://flickr.com/photos/cpurrin1/sets/72157594332798029/. 52
Slide 65: 3 The New Nature of the Firm tion proved otherwise. The birds on each individual island had distinctive beaks. Darwin’s research demonstrated that the different food consumed by the birds on each island was responsible for the different beak forms. A Finch Eats What Its Beak Can Fetch Each different type of beak had developed into a unique instrument designed to consume the available food in the easiest manner. One finch had a sharp, pointed beak in order to pick seeds out of pinecones; another had a short beak to facilitate the plucking of insects from branches. The finches had adapted to the conditions in which they were living. Over time, they had evolved. The Origin of Species Three years after the Beagle’s return, the first edition of Charles Darwin’s On the Origin of Species by Means of Natural Selection appeared bearing the subtitle or the Preservation of Favoured Races in the Struggle for Life.2 Darwin first committed his theory of evolution to paper in this book. He explains how natural selection is responsible for the fact that life on earth is divided into various species. In the struggle for survival, the individuals best adapted to conditions around them will survive and reproduce. The publication of this book exposed Darwin to attacks from all angles. In particular, the Catholic Church took steady aim at his ideas, regarding his book as a specific challenge to the existence of God. After all, Darwin was arguing that humans were not the offspring of Adam and Eve but the descendants of apes. Only after his death in 1882 was the value of his views permanently recognized. His fellow scientists made sure that Darwin received a state funeral in Westminster Abbey. Eight years after his demise, the Royal Society of London even established the prize for scientific work that bears his name (Darwin Medal) and is still being awarded annually. (Incidentally, another award that bears his name, the Darwin Awards,3 are much more frivolous and are posthumously “awarded” to people who died doing stupid things, thereby proving themselves “unfit for reproduction” and removing their genes from the gene pool at the same time.) 2 3 Beginning with this sixth reprinting, the book’s title was shortened to simply The Origin of Species. http://www.darwinawards.com/. 53
Slide 66: Collaboration in the Cloud Darwin’s theory of evolution has radically transformed our worldview, portraying a world with which not everyone could identify. Captain Robert Fitzroy was literally ruined by Darwin’s ideas, which contradicted his strong religious devotion. The idea that he had played an important role in Darwin’s life and, accordingly, in the development of his theory of evolution drove him mad, and ultimately to suicide. The Right of Might Darwin’s book popularized the notion of “survival of the fittest.”4 In fact, the term was originally coined by the economist Herbert Spencer. In his 1851 book Social Statics, Spencer states that, as long as the government does not intervene, the best qualified (read: richest) people will ultimately survive, and a super civilization will be created from which the weaker groups have been eliminated. Darwin adopted this economic “survival of the fittest” theory in explaining how natural selection functioned. He always meant that species adapt to (i.e. fit better with) conditions in order to survive. If they are unable to adapt, then they simply become extinct. It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change. However, the notion “survival of the fittest” took on its own life after publication of his book. Increasingly often, the emphasis was placed on the fact that survival was only a question of winning a struggle between one individual and another. Might is right, so to speak. Darwin did not, however, have this meaning in mind. In fact, his work demonstrates that evolution does not only operate through survival by fighting, but (and perhaps predominantly) by mutual collaboration among various species. In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed. 4 Source: http://nl.wikipedia.org/wiki/Survival_of_the_fittest. 54
Slide 67: 3 The New Nature of the Firm Not Fighting but Collaborating The biologist Lynn Margulis also disputes the notion that a given species can only evolve at the cost of others. Evolution does not just involve competition; it also involves collaboration, interaction and interdependence of organisms. She reflected on forms of collaboration in nature as long ago as 1966, discussing them in her paper, “The Origin of Mitosing Eukaryotic Cells.” In it, she demonstrates, among other things, how cells can be created from the symbiosis of various species of bacteria. Since then other theories have emerged as to how multicellular organisms started as complex collaboration between single-celled organisms.5 Lynn Margulis subsequently married the world-renowned astronomer Carl Sagan. From this marriage she gave birth to two sons, one of them being the science-fiction author Dorion Sagan. The two of them co-published her 2001 book Marvellous Microbes, a work in which she refocuses on the fact that evolution is not driven by competition but by cooperation: Life did not take over the globe by combat, but by networking. On Bullthorn Acacias Living networks not only occur at the cellular level but also at higher levels of complexity among various species. A good example is the story of the bullthorn acacia (Acacia cornigera), a plant that grows in the tropical rainforests of South America. The species is named for the large hollow thorns on its branches, but is best known for the symbiotic relationship that it shares with creatures in its proximate environment. In particular, the hollow thorns provide ideal shelter for a species of ant (Pseudomyrmex ferruginea), and the material that the plant discharges is an excellent food source for these ants. In exchange for this food, the ants protect their host against attacks from outside. As soon as other animals attempt to feast on this plant, the ants alert each other by dispersing a pheromone and join in the struggle against the outsider en masse. Possessing a long and hard tongue, the insects are even able to frighten off larger animals by giving them venomous bites. 5 http://scienceblogs.com/pharyngula/2008/03/the_choanoflagellate_genome_an.php. 55
Slide 68: Collaboration in the Cloud Fittest Through Collaboration There is a lot of collaboration in nature, and in some instances species that collaborate with (sometimes unlikely) partners stand a better chance of survival. Ants and the bullthorn tree have created an intricate interdependency for the benefit of both. Fierce lions hunt together with other lions. They are partnering to catch bigger game than they ever could alone, but in return they will have to share the prey and obey group etiquette. Zebra like to flock together with giraffes to make use of the giraffes’ long necks: if the giraffes run, so will the zebra. They have outsourced the lookout function, so to speak (for free, even). Whatever the nature of collaboration or cooperation between one or multiple species, there is always a benefit to the survival or reproduction of at least one of the species. Species that collaborate do so to survive a harsh world; or they collaborate to compete for scarce resources. Whenever the environmental pressures are high, when there is great scarcity or a lot of competition, collaboration is a winning approach in the game of life. It all comes together in the term ecosystems, where togetherness and interrelatedness are much more important than the element of competition. Could this also be true for the market as an ecosystem of companies, consumers and suppliers? 3.2 A Society of Conversations The previous chapter suggests that the industrial revolution put an end to the ways that humans had been working together for centuries. The vitality was taken out of work. The individual became only a small cog in the machinery of the assembly line. Everyone had a job to do without having to think too much about their surroundings. With the introduction of the internet, this type of thinking has slowly begun to change. Thanks to this new technology, people (or consumers) have obtained a platform by means of which they can compel companies to take their wishes into account. Companies must collaborate with consumers if they want to continue in business at all. In April 1999, four internet pioneers (Rick Levine, Christopher Locke, Doc Searls and David Weinberger) foresaw this turn of events. They formulated their vision into a manifesto containing 95 avant garde propositions in which 56
Slide 69: 3 The New Nature of the Firm they predicted how the business world would be irreversibly transformed in the near future. The manifesto was published on a website named for the manifesto: http://www.cluetrain.com. A transcript was quickly published as a book in 2000 under the title The Cluetrain Manifesto: The End of Business as Usual. A Self-Evident Truth The very first statement reads, “Markets are conversations.” This truism should almost go without saying. After all, everyone has long known that discussion and dialogue underlie all markets. Still, they often forget about this basic fact over the course of time. When we look back on the last century, we immediately see that the twentieth century was dominated by only a handful of men, companies and countries. These were the elite, so to speak. This elite was responsible for transforming markets into mere monologues. They determined the message that people were allowed to hear, acting like a corporate dictatorship. At the dawn of the twenty-first century, the above-mentioned manifesto made it apparent that a fundamental leap forward was about to occur. The book was the first to proclaim the enormous potential of the World Wide Web. A new world was dawning. And this world would no longer allow itself to be dominated by a small group of people using outdated techniques and strategies. This new world demands a new approach, a new form of management, a new way of doing business, a new manner of collaborating. Markets Are Conversations Markets have always been conversations. They are places where demand and supply come together in order to determine the prices of goods or services. In an ideal market, producers and consumers have equal power to affect the interplay of supply and demand. In an ideal market, producers and consumers collaborate. That is the utopian ideal, which is not always what happens in practice. Traditionally, the interaction of supply and demand is the cornerstone of the value-creation process. In the pre-industrial age, this process of value determination functioned well because producers and consumers had access to 57
Slide 70: Collaboration in the Cloud the same information. To put it more strongly, because they mostly lived in small communities (villages), producers and consumers could meet every day for discussion and negotiation. Consumers were able to provide direct and immediate commentary, and the producer could take immediate action. Producers and consumers had an especially intimate relationship, which ultimately meant that they worked together to determine the value of a good or service. A simple handshake was then sufficient to indicate that both parties were satisfied. Demand Price Supply Market Equilibrium Quantity Figure 3.2: Market Equilibrium Naked Conversations Consumers are in the midst of a conversation that isn’t ours. The race is on to grow ears to learn what they are saying. – John Hayes, CMO, American Express With the dawning of the information age, a transition is underway. Information technology gives consumers their voices back. Using all types of communication (blogs, microblogs, forums, wikis, social networks, chatting, etc.), they are again able to express their (dis)satisfaction. In his book Naked Conversations, Robert Scoble shows how businesses are being dragged into these conversations, almost against their will.6 After all, 6 Robert Scoble and Shel Israel, Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers. 58
Slide 71: 3 The New Nature of the Firm companies cannot afford to ignore a discussion when it involves their brand(s). Before they know it, the viral effect of the web can create an enormous thunder of negative voices against which the company’s soothing words go unheard. Robert Scoble focuses his book specifically on the impact of weblogs on organizations. The internet will not stand still and is, in fact, gaining momentum. With the boost of “Web 2.0” technologies a tremendous array of new communication and collaboration options became available for companies, all becoming part of one continuous conversation online. Figure 3.3 of the Conversation Prism, by Brian Solis and Jesse Thomas, shows what the current landscape of communication channels looks like.7 (For a full-size version of the diagram, refer to Figure 5.5.) Comment & Social Bookmarks ReputationCrowdsourced Content Blog Platforms Blogs/Conversations Pictures LiveCasting – Video & Audio Wiki Music Blog Communities Events Conversations The Art of Listening, Learning & Sharing Micromedia Lifestreams Documents Specific to Twitter Video Aggregation Video Location Customers Service Networks SMS/Voice Social Networks Niche Networks Figure 3.3: The Conversation Prism It is striking that conversations are now discernibly shifting toward the lifestreaming phenomenon.8 More and more users are employing communication tools to share (“stream”) their lives with family, friends and acquaintances. This burgeoning popularity further increases the complexity facing companies that are trying to participate in these discussions. How can cor- 7 8 http://www.briansolis.com/2008/08/introducing-conversation-prism.html. Jaap Bloem, Menno van Doorn and Sander Duivestein, Me the Media: Past, Present and Future of the Third Media Revolution. 59
Slide 72: Collaboration in the Cloud porations keep up with this type of fast talk? How can organizations make the transition from “the mechanical age of speed to the digital age of real time”?9 Companies are now being forced to play with all their cards on the table. Transparency and truthiness10 have become the key terms for companies making contact with their customers. No more secrets! Early warning about the places where web discussions concerning a company’s brand are occurring is now essential. Such advanced detection enables companies to participate in this discussion right from the start. The discussions then make their way inside company walls, and collaborations are struck with outsiders, especially those who are most critical of the company. We are moving from a conversation economy into a conversation society. Nicholas Carr comments on these “naked conversations” in his book The Big Switch.11 He notes that, “By shifting power from institutions to individuals, information processing machines can dilute and disturb control as well as reinforce it.” It is therefore very possible that when companies get involved in the new “social” game, they do so in order to recover power once again. Perhaps this even occurs surreptitiously, without consumers catching on. From Speed to Real Time We might already be beyond the age of speed, by moving into the age of real-time. – Ivan Illich (1996) The fact that the relationships between consumers and companies are fundamentally changing as a result of information technology means that companies have to approach their business processes differently. The struggle for efficiency is no longer as important, while real time is playing an everlarger role. Organizations must change from unwieldy, rigid, bureaucratic monsters into flexible and adaptive organisms. Change is the process by which the future invades our lives. – Alvin Toffler 9 Partial quote by Teemu Arina. 10 http://en.wikipedia.org/wiki/Truthiness. 11 Nicholas Carr, The Big Switch: Rewiring the World, From Edison to Google, London: W.W. Norton & Company Ltd., 2008. 60
Slide 73: 3 The New Nature of the Firm What distinguishes our age from all those that have preceded it is the exponentially increasing rate of change. Companies can no longer be complacent. They must respond directly to the changes in their environment. The resulting complexity means that no company can operate on its own any longer. It is impossible to take on this new world alone. The various members of the business community must learn to think differently; they must join hands and work together. This collaboration can only succeed if each company makes the best possible effort. Every company needs to concentrate on its own qualities and skills – on its own core competencies. When each company is prepared to change its thinking, as described above, then the sum of the parts will exceed the whole. In the mechanical age now receding, many actions could be taken without too much concern. Slow movement insured that the reactions were delayed for considerable periods of time. Today the action and the reaction occur almost at the same time […] The restructuring of human work and association was shaped by the technique of fragmentation that is the essence of machine technology. The essence of automation technology is the opposite. It is integral and decentralist in depth, just as the machine was fragmentary, centralist, and superficial in its patterning of human relationships. — Marshall McLuhan 3.3 Management 2.0 The Future of Management The emergence of information technology means that companies no longer have to operate in a landscape of continuous change on their own. Collaborating with others makes it easier for them to respond to the continuous changes occurring in the world around them. This world no longer stands still for any length of time. A new market has been created which is open twenty-four hours a day and seven days a week. Company management must therefore adjust their strategies to suit this contemporary around-the-clock time. 61
Slide 74: Collaboration in the Cloud In The Future of Management, Gary Hamel examines the ways in which managers function inside organizations.12 He says the following on the subject: Managers focus on the value chain, the flow of producs and services through the activities the company controls or influences. … Managers should focus on the quality and the experience of co-creation, not just on the quality of the products and services of the company. Hamel also examines the ways in which management has been keeping pace with change in recent decades: Compared to the the enormous changes in technology, lifestyle and geopolitics of the last fifty years, management seems to have developed at a snail’s pace. New Age of Innovation The most recent book by C.K. Prahalad and M.S. Krishnan, The New Age of Innovation, provides a detailed description of the reforms required of management. Prahalad formulates the new ways in which companies will have to operate in the near future as follows: 1. Value is based on unique, personalized experiences of consumers. Firms have to learn to focus on one consumer and her experience at a time, even if they serve 100 million consumers. The focus is on the centrality of the individual (N=1). 2. No firm is big enough in scope and size to satisfy the experiences of one consumer at a time. All firms will access resources from a wide variety of other big and small firms – a global ecosystem. The focus is on access to resources, not ownership of resources (R=G). Customers are now demanding that goods or services they purchase should be customized to their needs. The individual has become the demanding key figure in the transaction. No single company can service every individual customer on its own. Collaborations must therefore be established around the world in order to satisfy this multitude of needs. 12 Gary Hamel and Bill Breen, The Future of Management, Harvard Business School Press, 2007. 62
Slide 75: 3 The New Nature of the Firm The economy of the industrial revolution was characterized by shortages. Due to the “Long Tail,”13 such scarcity no longer exists. Instead, there is abundance!14 The consequence for consumption is that the focus is no longer on possession but has increasingly shifted to experience;15 the focus is on the perceptions and emotions that a product evokes. The modern smart phones are outstanding examples of this way of thinking. Ultimately, a product or service has to contribute to a definition of self-identity. In the hypercapitalist economy – characterized by continuous innovation and dizzying speed of change – buying things in markets and owning property becomes an outdated idea, while “just in time” access to virtually every kind of service, through vast commercial networks operating in cyberspace, becomes the norm. We increasingly pay for the experience of using things – in the form of subscriptions, memberships and leases – rather than pay for the things themselves. The bottom line: we are spending more and owning less. – Jeremy Rifkin16 Unbundling Value Chains One of the immediate consequences of the new ways of thinking described above is the unbundling of value chains, a process that is now underway. The bundling of the world’s computers into a single network is ushering in what may be called the unbundled age. – Daniel Akst Phenomena such as mashups and the cloud are the very first signs of this change. As Michael Porter has taught us, the concept of the value chain must be given free reign. It is no longer sufficient to examine how an organization has structured its internal business processes. A much stronger focus must be placed on the collaborations among partners in the chain – not only locally, but certainly globally as well. 13 The Long Tail theory, introduced by Chris Anderson, describes how the internet creates a market for niche products, that start to compete with mainstream products. See http://en.wikipedia.org/wiki/ The_Long_Tail. 14 ”But we are shifting, too, from a culture of scarcity to one of abundance”: see http://www.buzzmachine. com/2008/08/07/the-myth-of-the-creative-class. 15 B. Joseph Pine and James H. Gilmore, The Experience Economy, Harvard Business School Press, 1999. 16 Jeremy Rifkin, The Age of Access: The New Culture of Hypercapitalism, Where all of Life is a Paid-For Experience, Tarcher, 2001. 63
Slide 76: Collaboration in the Cloud The mutual needs of consumers must also be clearly examined. How can the consumer be best involved in the development process in order to customize the experience for this consumer? And how should a company deal with large user groups, with communities? How can companies work together with their customers? Crowdsourcing,17 involving customers in the innovation process, is a tool used increasingly frequently by companies seeking to generate innovation. Porter’s Value Chains Each company is a collection of activities developed to bring a product or service to market. Michael Porter identifies this series of activities as an organization’s value chain. He first described this model in his 1985 book Competitive Advantage.18 Firm Infrastructure Human Resource Management Technology Development Procurement Outbound Logistics Marketing & Sales Inbound Logistics Figure 3.4: The Value Chain19 17 Jeff Howe, Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business, Crown Business, 2008. 18 Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance, 1985. 19 Source: http://upload.wikimedia.org/wikipedia/commons/a/ac/Value_Chain.png. Operations Service Gross Sales Support Activities Primary Activities 64
Slide 77: 3 The New Nature of the Firm Value is, in fact, the contribution that businesses make to customers and for which customers are then willing to pay. The aim is to create value for customers that is higher than what it costs to create. From this perspective, costs are not always as important in determining competitive position as value is. Technology has made possible the fragmentation of the value chain. – Suzanne Berger, Professor at MIT Value Chain 2.0 In an article entitled “Value Chain,” Xavier L. Comtesse and Jeffrey Huang clearly update Porter’s value chain to make it more applicable to the present.20 These chains unquestionably now involve consumers along with the other companies implicated in a given company’s business processes. The production of a good or service is to be seen as a collective initiative bent on the creation of a unique value (= experience) for a unique consumer. The fact that the creation of value is an activity not just reserved for companies but entangled in the interplay between producer and consumer means that Porter’s original notion of the value chain is no longer sufficient. This collaboration with consumers, identified by Comtesse and Huang as the Value Chain 2.0, is illustrated in Figure 3.5. An extra dimension has been added to each manner of value creation within an organization. These additions reflect the consumer’s involvement in the business process. As a result, collaboration with end users and other companies is a requirement for continued survival in the new age. 20 X.L. Comtesse and J. Huang, “Value Chain 2.0,” http://www.lunchoverip.com/valuechain20/valuechain20.pdf. 65
Slide 78: Collaboration in the Cloud World Wide Infrastructure Human Resource Self Management Technology Co-Development Open Procurement & Crowdsourcing Open Outbound Logistics Community Self-Service Open Inbound Logistics cc gin ar M Me-Media Marketing Figure 3.5: The Value Chain 2.0 The System is the Product On June 17, 2006, Adam Richardson expressed his frustrations concerning the new Motorola cell phone on his weblog.21 In his blog posting, he uttered his new mantra “The System is the Product.” “For a product to feel harmonious with the user, the system that surrounds it must be harmonious. No product is outside of a system, though not all products are systems.” Likely, it is the iPod and its associated system (iTunes) that is among the first examples of his philosophy. Apple introduced its newest product on October 23, 2001. With this mp3 player, Apple promised consumers complete and continuous access to their music collection: “All your music, always with you.” The success behind this mp3 player was not due to the device but to the underlying software. Specifically, the iTunes program makes it possible for the bulk of functionality to be left off the iPod and run on the PC. The launching of iTunes Music Software was tantamount to a fully fleshedout implementation of Richardson’s mantra. It enabled consumers to stream 21 http://richardsona.squarespace.com/main/2006/6/15/motorola-q-snatching-defeat-from-the-jaws-ofvictory2.html. Co-Production M ar gin Gross Sales Support Activities Primary Activities 66
Slide 79: 3 The New Nature of the Firm all types of media (video as well as audio) to their iPods. The iPod became, as it were, the interface for the entire underlying system. It provided an entirely different manner of enhancing and personalizing the consumer’s experience. This type of thinking is now being applied more frequently. All kinds of social web applications are currently being offered through APIs, allowing users to outfit their products with their own chosen content. Consider, for example, Microsoft Virtual Earth or Google Maps in which various types of extra information can be added, augmenting the program with almost any new type of visual data. Mashup and the Cloud The Gartner Hype Cycle in Figure 3.6 shows the various elements of cloud and Web 2.0 in their different stages of adoption, including the term Web 2.0 itself. The complete Web 2.0 movement has caused all kinds of new social applications to spring to life. Wikipedia, Flickr, Blogger, Digg, YouTube and Facebook are probably the most important examples of this phenomenon. They all rely on the consumer’s input and therefore offer a full range of APIs in order to provide the greatest possible means of incorporating the needs of their end users. To help web consumers negotiate this jungle of social networks, large companies are offering platforms in order to make it easier to create mashups: link networks and programs together. Examples of such online infrastructure are Amazon Web Service, Yahoo! Pipes, Microsoft Popfly and Microsoft Live Mesh, Google App Engine and the IBM Cloud. Companies are also using these platforms. They are placing increasingly more of their core business in the cloud and linking to the core activities of other companies. In this way, completely new business processes have been created (along with corresponding new forms of collaboration), outside the walls of any one company. 67
Slide 80: Collaboration in the Cloud Green IT Microblogging 3-D Printing Cloud Computing Surface Comp. Augmented Reality Mobile Roots Behavioral Economics Visibility Social Computing Platforms Video Telepresence Solid-State Drives Public Virtual Worlds Web2.0 RFID (Case/Pallet) Corporate Blogging Basic Web Services SOA Location Aware Applications Service-Oriented Business Applications Context Virtual Delivery Assistants Architecture Erasable Paper Printing Systems Tablet PC Electronic Paper Wikis Social Network Analysis Idea Management Plateau reached in: <2 years 2-5 years 5-10 years >10 years Maturity Figure 3.6: Hype Cycle for Emerging Technologies 22 3.4 Conclusion The world is verging on a fundamental transformation the likes of which we have never seen. The ways in which companies are accustomed to doing business will change for good. How can this be possible? Companies have stood alone on the bridge of commercial enterprise for decades. They have laid the course along which the consumer economy has had to sail. They have dictated the products that consumers would like to possess. They have greatly benefited from the absolute power that is now crumbling away at a furious rate. The emergence of new technologies has undermined this corporate regime by completely altering the product paradigm. Technology has made globalization possible. No longer is there any distinction between here and there. Neither is there any distinction between sooner and later; transactions are now occurring in real time. The technology has also come into the hands of consumers, enabling them to have immediate input into the production proc22 Source: http://www.gartner.com/DisplayDocument?doc_cd=159496&ref=g_homelink. 68
Slide 81: 3 The New Nature of the Firm ess. Using the technology to assert a newly acquired advantage, consumers can make their own wishes known and demand customized products or experiences from companies. Companies must provide specific concrete responses to the unique needs of each individual consumer. But how can companies achieve this? No single company is capable of satisfying these unique needs all by itself. Any company must therefore collaborate and enter into dialogues with other companies and with its consumers as well. This will have a great effect on the position of the company in the market, and will also have effects inside organizations. And not least, it will have an effect on the role of the IT department within the organization. In the next chapters we will go into these topics and we will also talk about the workings of collaboration and its tools. 69
Slide 83: Case Holland Casino Case: Holland Casino Turns to Combination of Collaboration and Organizational Change as Strategy for the Future Technology with Insufficient Functionality Was Hampering Recruitment, Fueling Travel Costs It wouldn’t be a stretch to say that Holland Casino has been an ideal candidate to benefit from collaboration technologies. Since its founding in 1975, the governmentowned company had grown into a €750 million-a-year network of 14 casinos serving gaming and entertainment devotees throughout the Netherlands. That footprint, and possible expansion, left the company little choice but to acknowledge in 2007 that new technologies needed to be introduced. For instance, on the recruitment front, the lack of real-time collaboration tools, such as instant messaging, video conferencing and mobile document sharing, is now and certainly in the near future is going to be a handicap in Holland Casino’s efforts to hire promising young talent. They prefer to work where cutting-edge technologies are at their fingertips. “Young people coming in are very well aware of all the new technologies,” says Ruud de Haas, director of information and communication technology. “They use them at home, and they want to use them at work as well.” Among current employees, the lack of access to those same tools meant that efforts to coordinate on projects or simply to communicate with each other were relegated to email, sending around documents and phone calls. These are seen as increasingly inefficient tools for evolving real-time business environments. Moreover, the company’s network of casinos had employees driving from one property to the next when working closely with co-workers in multiple locations, whereas a web-based collaboration platform would render many such trips unnecessary. Big Bet on Collaboration Tied to Organizational, Network Efforts While Holland Casino was trying to address its collaboration deficit, it was also beginning to restructure around a new organizational model that reflected the changing business. The company’s management agreed that implementing a platform for collaboration would help that new model succeed. It proceeded to deploy Microsoft’s SharePoint 2007 online collaboration software, as well as its video conferencing technology, in conjunction with a rollout of Office 2007. In the fall of 2008, it launched a proof-of-concept rollout of SharePoint, which was to run for three months to a cross-section of employees. At this time, the company’s advisory board planned to assess its impact based on user experience reports, business process results, and whatever necessary organizational changes become apparent. Full rollout of SharePoint to the company’s 2,000 information workers (the company employs around 4,700 people in all) is 71
Slide 84: Collaboration in the Cloud expected to occur during 2010. The effort, dubbed “InfraNext,” will combine the wider SharePoint and Microsoft Office rollout with the establishment of a unified communications platform for ensuring that employees are able to keep in the loop at all times. About a dozen IT staffers will be working on the project, with help from Microsoft. Workspace management consultancy Getronics NV already prepared the foundations for this project. Despite the substantial resources behind it, de Haas sees the success of the collaboration effort as being tied to the fate of the company’s network capabilities, for which an upgrade strategy was being laid out. The strategy was approved by the board to ensure the level of performance needed to support dynamic, real-time applications. The success also depends on the cultural change needed to really use collaboration tools, according to de Haas. New Strategy Brings High Hopes – and Cultural Change The kind of widespread change brought about by an effort like InfraNext isn’t easy to institute. In a company where face-to-face meetings in specific locations have been the cultural norm, moving to a technology-enabled collaboration strategy is a delicate operation. Even exhaustive training of employees on using the new technology won’t ensure the success of Holland Casino’s evolving strategy. That’s why de Haas believes the success of the parallel organizational change effort is so important. “This can’t be a technology issue,” he says. “It has to come from the top, not from IT.” Assuming it all comes together as planned, de Haas has high hopes for what the changes will bring in terms of business value. He expects substantial project management efficiency gains as the automated workflows inherent in SharePoint workspaces move Holland Casino’s projects along more quickly than ever before. SharePoint’s messaging and document sharing capabilities will enable employees to communicate more easily in real-time, preventing important details from sitting in email and voice mail inboxes waiting to be addressed. And at those times when a phone call is necessary, SharePoint’s presence capabilities will enable employees to see who’s actually at their desks, further reducing the number of calls that go into voice mail. In addition to such hard-to-measure efficiency gains, the new technology will help Holland Casino slash travel costs as employees adopt the tools to coordinate with colleagues at the various casinos. According to de Haas, those savings alone could save the company a substantial amount of money each year. 72
Slide 85: 4  On Productivity 4.1 Introduction The world around the organization is changing. Value chains have opened up and there are new pressures on businesses. But what does it look like inside the organization? How do these changes impact the inner workings of the company? In this chapter we will look at developments and what is happening to the organization, then look deeper into what is happening inside company boundaries. Furthermore, this chapter will also spell out some directions for corporate IT on its journey to become the enabler that it always aspired to be. Imagine the best-run organization that could be: an organization where you can benefit from the creativity, support and initiatives of all your colleagues; where autonomous units within the organization are responding properly to every business challenge and opportunity. Where there is a structure for knowledge management that makes the company more mature every day, leading to better decisions and ever-greater efficiency. Such an organization will have a culture where people are valued for who they are, and where people are free to express themselves. People in management roles function as facilitators and are open to feedback and suggestions for improvement from anyone with whom they are in touch. We all seem to have an idea what such a great company could be like – how much fun it would be to work for one, and how easily such an organization would respond to change and even benefit from changes in the market. Still, most organizations continue to function in the “old” way. Since the early twentieth century, management practice has become increasingly professional. Research has been done in the fields of metrics and incentives. We have looked into subdividing tasks and assigning roles. We have gained some insight into how to evaluate and motivate people. Yet when examining the progress in this area, we must conclude that management structures are largely unaffected. The way we manage people is still the same as it was forty years ago, while the markets around us have been changing. While management has been practicing and honing a command-and- 73
Slide 86: Collaboration in the Cloud control management style, the job market and the regular market of consumers have changed dramatically over the years. 4.2 Changing Markets In the previous chapters we discussed Michael Porter’s work on value chains. Another topic Porter is famous for is the “five forces” model with which you are probably familiar. Michael Porter introduced the model in 1979 to describe markets, and specifically the competitiveness of a market. It has become a tool companies may use to analyze their market position, their threats and opportunities. In short, the Porter model looks at the choices that are available to every player in a specific market and how they impact the role of a producer: new and existing competitors, buyers, suppliers. In the model, the job market, which has its own dynamics, is not explicitly mentioned, but it could be viewed as a supplier’s market supplying companies with the human capital essential for “production.” The five forces model, though 30 years old, is still a valid way of examining markets. Still, when we look at the model we immediately see that for many markets the present use of the internet has greatly increased the competitiveness of these markets. This is especially true for markets where no physical goods are produced are impacted. For example, it has become easier for buyers and suppliers to find each other and to organize bargaining power. It has become cheaper for new players to enter certain markets (this is possible in large part because a lot of IT support is readily available in the cloud.) The power companies used to have over their brand and marketing is slowly eroding thanks to different kinds of media: YouTube and the blogosphere are much more difficult to direct than radio, television and newspapers. Ongoing Conversations Change the Pace of Business A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter – and getting smarter faster than most companies. – www.cluetrain.com 74
Slide 87: 4 On Productivity Potential Entrants Threat of New Entrants Bargaining Power of Suppliers Industry Competitors Rivalry Among Existing Firms Bargaining Power of Buyers Suppliers Buyers Threat of Substitute Products or Services Substitutes Figure 4.1: The Five Forces1 We have discussed the Cluetrain Manifesto and Naked Conversations in previous chapters. Since the Cluetrain Manifesto was published online in 1999 (and on paper in 2000), we have been talking about markets as ongoing conversations between consumers, producers, suppliers and partners. A peopleto-people market, very different from the business-to-business world we were used to. The Cluetrain Manifesto serves as a call to action for companies in a market where individual consumers are asking to be treated as individuals, with personal service and attention. Since the publication of the Cluetrain Manifesto in 1999 there has been a lot of change in the internet and business world, and most of it is in line with what the manifesto proposed. The impact of these new market dynamics is in two main areas: the many different consumers and the incredible speed of change. To reach the consumers there is a drive towards extreme personalization. The social nature of people leads to changes in consumer behavior, which are happening at a faster pace than many organizations can handle. And another characteristic of any conversation is that it is ongoing and incremental: getting and staying in touch with consumers continuously. Respond to changes in demand quickly. Leverage the better insights by creating bet1 http://www.libraries.psu.edu/business/images/industry/fiveforces.jpg. 75
Slide 88: Collaboration in the Cloud ter services and solutions. Leave the one-product-fits-all and offer more specialized solutions for specific groups, or even individuals. In Naked Conversations (2006), Robert Scoble and Shel Israel put a more practical spin on the Cluetrain Manifesto, giving the business world insight into how blogs are becoming an essential part of this conversational market as described in the manifesto. Blogs fit the bill due to their interactive nature, immediacy of communication and reversal of power. Any individual could start a blog within minutes, be discovered and thrust into the limelight thanks to social bookmarking and simple syndication of content. If an idea or bit of information is worth spreading, it will gain an audience in a matter of hours. Where Value Comes From Any organization looking to thrive in a competitive market will analyze its competitive advantage. Strategists will think about how to increase the competitive advantage of the company by partitioning those parts of the company that represent its key products or commodities and which make it unique, from others. This might be very visible, as in cases where part of an organization is outsourced. It might also be an implicit way of controlling the flow of money and investments: we’re no longer investing in the “old” products, but spending time and money on developing new products and services. This also has an impact on IT strategy. The fact that just maintaining existing IT systems costs money, while not creating new profits, puts pressure on IT. As a direct consequence, there is a need to, on the one hand, become more efficient and operationally optimized, while, on the other hand, becoming more agile and responsive to business needs. Therefore, value is created in those parts or activities of the organization that are not a commodity. Yet the parts or activities that are not a commodity are also the parts that are hardest to optimize. This is a major problem for organizations: the need to change, innovate or even just respond to changing circumstances is enormous, yet the parts of the organization that are involved in this change, innovation or response are impossible to optimize. We need a good way to improve the productivity of this sector of the organization. 76
Slide 89: 4 On Productivity The Rise of the Consumployee as Source of Innovations Who initiates technological innovation within an organization? We like to think it’s the CIO or CTO, basing his initiatives on research and business needs. This is increasingly not true. In reality, often the individual employees are the ones driving the demand for new technology. Consumers try out the new technologies in their private lives, then they bring these technologies and expectations to work. The first smartphones were brought in by the people who liked this cool new thing. The first websites were built by creative technology people playing around with the new technology. Instant messaging was brought into organizations by people using it in the personal sphere. MSN, Facebook, LinkedIn, online video and many other examples started purely in the consumer sphere, then found their way into organizations, creating new opportunities for networking, sharing of information, etc. First these innovations were primarily driven by technical people, now they are occurring enterprise-wide. When it comes to Web 2.0 tools, in the private sphere there are little restraints and the tools are freely and quickly available so the pressure on corporate IT to adopt them is large. In most organizations, the IT department is ill suited to respond to these kinds of innovations. They either expressly forbid the use of any non-authorized tools, or simply ignore the problem. Autonomy and Responding to Changes Whenever an organization gets to a certain size, the management and coordination of the whole starts to become more difficult. That is probably the main reason why many companies never grow beyond a few hundred people: it becomes a different game to manage anything beyond that size. In particular, responding to change takes a lot of extra time and effort in the larger companies. How do we change that, and remain nimble regardless of the company size? In a book by Ori Brafman and Rod A. Beckstrom called The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations, a possible solution is presented. They use the analogy in the book title: try to create organizations where every unit or sub-entity is an autonomous, viable part that could in theory be its own company (like species of starfish, which can regenerate limbs or grow new starfish from a single tentacle), instead of a centrally 77
Slide 90: Collaboration in the Cloud controlled organization where everything depends upon the central core (like spiders who will die from losing their legs – excuse the cruelty of the metaphor). They go ahead and explore the characteristics of “starfish” organizations, taking cues from AA (Alcoholics Anonymous), but also Al-Qaeda, among others. The book focuses on themes of cultural change and catalysts – the people who can help bring change and manage the delicate balance between centralized and decentralized. There is a bigger trend that indicates that successful organizations are flatter (due to continuous focus on decreasing the number of layers of management) and try to delegate authority down the chain of command. This also gives rise to practices such as 360-degree feedback and self-steering teams. IT support in the kind of organization that consists of numerous fairly autonomous units is also different from IT support in centrally coordinated, topdown organizations. Instead of one “client” for IT, there are many. Instead of one solution, there may be a need for many different solutions based upon slightly different needs and strategies. The game of finding and supporting the commonality between different units, and embedding these in an enterprise architecture, becomes all the more important. Worker Productivity Needs to Improve Dramatically Increasing productivity is ultimately what determines the living standards of people, the competitive advantage of organizations and the wealth of nations. – Erik Brynjolfsson, Director of the Center for eBusiness, MIT2 How we motivate people in a business context and how we provide them with the right incentives to reach their highest productivity is a continuous challenge to organizations. Changes in culture and tools bring new challenges in the effort to make people productive. The introduction of new tools and channels of communication also brings challenges on a very personal level: people struggle to avoid being distracted from “work” by email, internet, messaging, twitter and numerous other interruptions. 2 http://productivity.mit.edu/. 78
Slide 91: 4 On Productivity Productivity in a business context is not measured as the sum of the productivity of all individuals. It is really only the productivity of the collective. Only if all people work well together can an organizational unit be really productive. If everybody is busy creating papers and emails, that might be perceived as a high personal productivity, but it might not be the greatest collective productivity. Evidently, any group of people working together needs to have a continuous process that examines the productivity of the group. This process must be continuously open, to improve how people work together. When we’re talking about collaborative culture, this is what we mean: everybody is responsible for maximizing the productivity of ALL collaborative groups they are a part of (and perhaps even of groups they are NOT part of). This is very much a bottom-up culture. The classic example is that it was only when car-manufacturer Toyota started taking the ideas and insights of factory workers seriously that they could improve the quality and productivity of the whole production process of their cars. In the process, they changed their entire way of managing production and quality. Similarly, when we want to improve administrative organizations, we need to have a way to structurally involve all “information workers” in optimizing the whole process. Productivity is an interesting metric. We like to think of productivity as a very concrete number that can easily be quantified, but in reality productivity of an employee or company as a whole is hard to determine. Yet we do realize that “productivity” is directly related to the revenues and ultimately the profit of the company: if we can do more work with fewer people, we are bound to earn more and spend less. The first major steps in improving productivity were made in manufacturing: optimizing the environment, processes and necessary skills to maximize the output of the factory while minimizing the number of people involved. This is also the base for Six Sigma, Lean and the CMM methodologies. Later attempts to apply these to the “office” side of organizations, or to entire administrative organizations, turned out to be more difficult. Some parts (e.g., claims processing or data entry) were fairly similar to manufacturing, so the same lessons could be applied. There are great examples of how groups of typists were trained and optimized to be highly productive. However, some parts were harder to optimize: one-off projects, creative processes, 79
Slide 92: Collaboration in the Cloud ad-hoc responses to new situations. How to optimize the productivity of a team that develops new products and services? Collaborative Knowledge Management One of the elements that will improve productivity of those parts of an organization that are unlike “production” is knowledge management: build corporate knowledge and use it to provide people with guidance and support. A lot has been written about knowledge management, and it is a bit of a holy grail: a lot of promise but ever-so-hard to achieve. The newer tools that support collaboration seem to help a lot in embedding knowledge management into everyday processes. One of the challenges has always been that people are willing to USE information once it’s there, but they are NOT willing to create or add information if it is not in their immediate best interest. A special situation arises when we use the right tools to support people in their everyday processes: just by using the tools, they will add information to the whole. By categorizing information for their own purposes, that cataloged information may be shared with others. By prioritizing tasks or bits of information for your own use, you can share this evaluation with others. By selecting certain links or words over others, statistical information is created that ranks relevance. Figure 4.2: Tag-cloud of this chapter, generated at Wordle.net Once we take information and processes out of the email tool and start using other tools that are focused on retaining information in a structured way 80
Slide 93: 4 On Productivity (portals, wikis), we can improve the way we collect and create information. Improving access and lowering barriers to adding even more information will create even more and better “knowledge.” A lot of the tools would also provide the support to enable structure and meaning to emerge automatically. For example, tag-clouds that show the contextual use of words could give a quick idea of the topics discussed in certain passages, or “most visited” links could give insight into which pages are most likely relevant on an intranet, especially if we could see “most visited by your peers” (i.e. “social bookmarking”). Digital Natives Accelerate the Change The digital natives, the newer generations, will bring some extra impetus to all the initiatives mentioned above. Once they start thinking about business, sales, marketing and optimizing organizations, expect to see extra pressure on new-style productivity, flat and autonomous organizations, and a different view of work and commitments. The changes we can expect are rooted in the beliefs and characteristics of the digital natives: • The world is flat. They live with an international view of the world. While they have some geographic “home,” it’s easy for them to connect to people and business across the globe. • There is a greater dislike of bureaucracy, and some disrespect for authority. Motivation is not accomplished through exercising power but through inspiration. • Social in nature. Having many friends and connections, they actively use this network in personal and business life. • Their commitment is based on deliverables rather than on a span of time. Ideally they work whenever they like, as long as they deliver on time. • Technology is not seen as technology, it’s simply there to be used. When you are born in a world full of computers and websites, the technology behind it is a lot less interesting than the possibilities in practice. This will also mean they will have higher expectations of “what should be possible” using technology, since they are less interested in the complexities of implementation. (“If this website has it, why can’t we?”). For the digital immigrants, it’s hard to imagine what it means to live with the assumptions and expectations of a digital native. There are a lot of great examples of generational differences between natives and immigrants: from the father who could not explain why at the vacation address television 81
Slide 94: Collaboration in the Cloud shows were not available on demand (there was no TiVo, like at home) to the mother who can’t grasp that her daughter has over 300 friends online, most of whom she has never met. Or even the older brother who can’t see why (or how) his younger sister only uses email to communicate with “older people” like him. The new generations want to be productive and use the tools available. They want to work in autonomous teams that are free to control their own structure and dynamics. They want to think and work across organizational boundaries. They will bring a new wave of technologies and expectations to the corporate world. 4.3 Consequences for IT We started with the insight that many innovations in technology were not instigated by the CIO or the IT department. So what is the role of an IT department in supporting all these developments? What does an IT department need to do to enable all these new ideas and initiatives? IT’s first instinctive reflex will be to try and stay in control: create strict rules that everybody has to abide by, and create a governance structure that checks if the rules are not broken. This will give the organization great control over the technology portfolio, but it will stifle innovation and business dynamics. Business doesn’t simply want to introduce IT complexity for complexity’s sake; it is usually in pursuit of business goals or ideas. A more flexible and dynamic view on IT is needed to find the right balance between control and freedom. Responding to business change means supporting a more flexible IT. This is where enterprise architecture, IT architecture and specifically service-oriented architecture are positioned: trying to use an architectural style that is aimed at reuse and supporting agility. The IT department will look for ways to optimize the IT portfolio and create the best set of IT assets. The focus shifts to a portfolio view that is focused on “today and tomorrow” and not just on “delivering projects.” The IT portfolio is the set of tools that are offered to the business users to let them create or configure their own solutions (instead of only offering IT-crafted, specific solutions). 82
Slide 95: 4 On Productivity This fits neatly with the organization that is comprised of autonomous business units. If the tools are part of a portfolio that business units can select from as they like, they are free to create solutions that fit their specific needs. If there is also a way to include external services, offered from the cloud, it means the organization has the flexibility to leave parts of its business to the market if the market has started to offer a specific business task at a better price and/or quality. Think of the business as a portfolio of business services, created and managed by autonomous business units, supported by IT services that are internal and external, depending on the market. The digital natives will expect these tools and platforms to be available once they start entering the workplace. They will introduce new technologies and expectations themselves. The IT department needs to get ready to support this drive for innovation. Denying its existence (or its value) will not work, nor will strict guidelines that forbid innovation: the digital natives are likely to “vote with their feet” and try to find employment elsewhere – with your competition, perhaps? One thing that the IT solutions should allow, regardless of the fractured nature of the business or the complexity of the IT portfolio, is building corporate knowledge. The reason for doing certain business tasks in the context of an enterprise is to be able to create efficiency and lower the cost of transactions needed to complete the tasks. One important way of creating efficiency and lowering the cost is to build corporate knowledge: learn from experiences and let people share knowledge across the network. In practical terms, this means that knowledge-building should be ingrained in the platforms: • Tagging (adding classification information to assets); • Bookmarking (categorizing and selection); • Rating (evaluating value); • Groups (help people find peers to exchange information that fits their needs); • Trends (give insight into popularity and the way the wind is blowing, making for better business decisions); and • Collaborative sense-making (create an open dialogue that interprets information and tries to uncover hidden meanings, allowing better insights and better decisions). 83
Slide 96: Collaboration in the Cloud The tools for collaboration illustrate exactly the role IT should be playing in modern business. IT doesn’t create or DO the actual collaboration, it simply provides the tools. IT doesn’t determine HOW people use the tools, it simply makes sure they are flexible and available. IT doesn’t have to be involved to create new collaboration initiatives, all it has to do is respond to new channels and tools that are entering the industry. The business users will find out what they want, what will work. IT gives them the pen, typewriter and brush and lets business discover what works for its needs. Real Change is Business Change IT will need to respond and provide the right tools for business, but it is up to the business side of the organization to find the best new structure. As Gary Hamel argues in his book The Future of Management, the only sustainable innovation is the innovation of management. Only when we examine the workings of the organization itself and optimize the way people manage and work, can we hope to increase business productivity and business innovation. As Hamel wrote, the exact design of what such an organization looks like will be different for each company, but the themes of “flat organizations,” increased autonomy, bottom-up initiatives and better collaboration will be present in any organization. But here lies a challenge, since the structure of management is also the hardest to change. The people that have to initiate change will also be the people mostly impacted by it. 84
Slide 97: Case Sydved AB Case: Sydved Transforms Complexity into Simplicity Integrated Interface Shifts Focus from Administration to Timber Procurement When you’re in a business like wood procurement, the last thing you want is to have folks stranded at their computers, drowning in repetitive business processes. But that used to be the situation at Swedish timber-purchasing firm Sydved AB, which made the decision several years ago to move much of its administrative staff to other functions. This left employees in the field to manage the myriad of details involved in coordinating with forest owners, wood harvesters, transport companies, customers and colleagues. At the time, those field workers had to swap between some 25-30 applications used for tracking harvest information, managing contracts, generating reports and handling the countless other processes comprising a single contract. Worse yet, they had to toggle between the various contracts, creating an inefficient combination of wasted time, excessive processing demands, and operational complexity, when what they really needed to be doing was visiting harvest sites, negotiating purchase agreements and executing contracts. And as difficult as it was to enter and manage the information, it was equally challenging to view it, what with all the switching back and forth from this contract to that, and from one menu to another. The drain on the company went even further, because the complexity of the system required that Sydved provide heavy support for its field staff, whose normal job functions are related to purchase of wood and managing the harvesting of forests, not performing administrative tasks. The result was a whole lot of questions. “Before, they were never taught how to navigate the system environment, so they didn’t know what to do,” says CIO Roland Persson. PEA: Collaborative Business Process Management at Its Simplest That all changed when Sydved tapped its IT team’s .Net and C++ programming skills to build a new system that greatly simplifies the coordination of so many moving parts. The resulting system, called PEA, is an achievement in collaborative simplicity. It combines more than two dozen applications into a single row-and-column interface that allows field staff, as well as other staff throughout the company, to access all the contracts they’re working on, along with the status of each project, all in one view. PEA enables real-time collaboration, and its ability to keep employees up-todate on their joint efforts with colleagues delivers truly collaborative business processes. And field staff have no idea what application they’re working in at a given moment – nor do they need to – as PEA leads them through the process, step by step, without ever leaving the main interface. 85
Slide 98: Collaboration in the Cloud Not that development of PEA occurred without hiccups. For instance, initially the system was designed to update interactively, in real time, but the added drain on computing resources was more than Sydved’s IT environment could accommodate. And that meant unacceptable latency caused staff to wait inordinate amounts of time for requested information. “Response time is important because users are impatient all of the time,” says Persson. “Even if you’ve got a lot of information, they don’t want to wait even 20 or 30 seconds.” To solve that problem, Persson’s team tweaked the system to update in batch mode each night, easing the drain on IT systems during business hours. Also, if the user needs to, he can choose to refresh the interface, wait these seconds and get the most current data: it is up to the user. Now, Sydved employees not only can use a single view to see the status of all current contracts, they also get visual clues as to the status of each process as well as reminders of specific tasks that await their individual contributions. Employees on the Same Page = Competitive Advantage Persson estimates that PEA, which runs on IBM iSeries servers calling an Oracle database, has enabled field staff to reduce their administrative workloads by as much as 20%, and has prevented Sydved from having to increase its administrative staff by at least 10% to keep up with the company’s growth. It has also yielded a more efficient staff by enabling employees to quickly view the status of everything from timber availability to harvesting difficulties to costs. With a turnover of people of 40% in the last 3 to 4 years, PEA has been very valuable in quickly getting new staff on track – they can immediately see what they have to do. Combine that with the benefits of streamlined administration and improved information accuracy, and Persson believes PEA is twice as effective as the mish-mash of applications it replaced. Additionally, PEA was designed with sufficient flexibility to add processes or contracts easily on the fly, an important consideration given the difficulty of predicting every task field that might eventually be needed to support a contract. Any way you look at it, Sydved’s investment in PEA is money well spent. The new system has reduced the volume of questions and issues that arise during the fulfillment of a contract, and it has created a new level of collaborative business process management. That translates to faster decisions, which constitutes a competitive advantage. Where confusion and misinformation reigned before, says Persson, “Now we have different people talking about the same things.” 86
Slide 99: 5  The Anatomy of Collaboration 5.1 Introduction “Collaboration” and “communication” are different themes on the same spectrum; only when we communicate can we collaborate, and the part of collaboration that involves working with others is some form of communication. Lessons in communicating teach us to consider the partner’s viewpoint and to create a connection to exchange information. This is hard enough in faceto-face communications, and it doesn’t get any easier when collaborating across a distance. The many tools available are striving to approach or even improve upon the face-to-face communication we are all used to. In this chapter we will discuss the ingredients of collaboration, and some of the tools that are available to support it. As Marshall McLuhan eloquently put it: “We become what we behold. We shape our tools and then our tools shape us.”1 The first tools available mimicked the tools we used in real life collaboration, people meeting people face-to-face. Over time, the tools have improved and are now using the new capabilities that come with the medium. Regardless of the medium we’re using or the tools we have to help us, we can talk about the capabilities we need to collaborate effectively. We have the need to: • Have a place to store and add information, to create deliverables and build knowledge. Write it down on paper, record it on tape or store it “in the cloud.” • Interact, communicate: exchange information between people, the main difference from doing something alone. • Know and share “status”: is someone available? Can I approach you with a question? • Know more about with whom we are communicating: know the identity, role and position of someone we are working with. Know the social networks. • Discover information: search and find. Have a way to structure information. 1 http://en.wikiquote.org/wiki/Marshall_McLuhan. 87
Slide 100: Collaboration in the Cloud Be notified: we don’t only want to search, we also want to be notified of important events and information. Integrate: we want all these elements to be seamlessly connected and integrated. • • To take collaboration and communication to the next level within the company and within the value chain, it helps to understand the types of collaboration that take place, and know how the available platforms support, enable and enrich these collaborations. There are a fair number of tools and websites available to support some kind of collaborative work. But, do they offer what businesses need? Do they have the feature sets to automate and to support the information worker? Do they offer the collaborative environment that business needs, an environment where everybody works together in a seamless collaborative way and is able to work from any place in the world, unleashing the creativity and innovation of the individual and the crowd (collective intelligence)? 3000BC 0 1000 2000 Papyrus Communication drums, Horn Couriers, Postal systems Heliograph Newspaper Paper Pen European Printing press Pencil Maritime flags Tools Categories Text editing & storage Optical signals Audio signals Optical & audio signals Semaphore lines Typewriter Telegraph Telephone Radio Computer Signal lamp Television Computer/Text editor Computer networking Internet Mobile/1G networks Mobile/1G networks Mobile/2&2.5G networks Mobile/3G networks Mobile/4G networks Figure 5.1: Timeline of Communication Tools 88
Slide 101: 5 The Anatomy of Collaboration 5.2 Electronic Communication The most widely used collaboration tool is, of course, email. It was preceded by other electronic communication tools invented years ago: first the telegraph, then the telephone, and later the fax. Samuel F.B. Morse invented the practical use of the telegraph, on May 24, 1844. The first official message in Morse code, “What hath God wrought?” was sent from the old Supreme Court chamber in the United States Capitol to Morse’s partner in Baltimore.2 The word “telegraph” was derived from Greek and means “to write far,” which is exactly what the telegraph does and what it was meant for: to communicate over a long distance. It’s hard to grasp how the telegraph changed the perception of distance. In those times, the only ways to send information to another place was to physically bring it there or use a complex system of watch posts and signals (or smoke). To send a message across America would take 10 days (one way), using the Pony Express.3 And there was no guarantee that the message would even arrive. Figure 5.2: Pony Express Poster Around 1870, Alexander Graham Bell’s telephone added an extra dimension to the limited electronic communication tooling of the time. Different from the telegraph, it enabled synchronous communication with speech. Not everybody was convinced of the value of this innovation. In England, the most prominent man of the time in the field of communication, the Head Postmaster, was quoted saying “No, sir. The Americans have need of the telephone – but we do not. We have plenty of messenger boys.” Admittedly, it must have been hard to imagine that the telephone would evolve into something every person could own and that might be used by teenagers to call each other and ask, “where are you?” 2 3 http://inventors.about.com/od/tstartinventions/a/telegraph.htm. http://en.wikipedia.org/wiki/Pony_Express. 89
Slide 102: Collaboration in the Cloud Communications support grew from physical delivery to remote communication, to synchronous communication, and then to synchronous communication by everyone, all in only a hundred years or so. In the 1930s we had the telex (basically a long-distance typewriter), and in 1950, a century after the introduction of the telegraph, Bell Laboratories came up with the first “DataTelephone.” It was the first implementation of a “modern” modem with a speed of 50 kilobytes per second. From there it took another twelve years before Ray Tomlinson developed a system for sending messages between computers that used the @ symbol to identify addresses. The internet was in sight, and in 1988 email became more widely adopted through the development of the email client Eudora by Steve Dorner. The basics of email, and its use, have been the same ever since, and evolution has been almost idle for 35 years. Figure 5.3: Ray Tomlinson Originally email was a communication tool, intended to send and receive information. As it became widely adopted, it also became people’s preferred way to work together. It has taken over the telephone as the most important facility any business must have, and it has become part of many business processes. Just think of what would be worse for business: the phone system down for a day, or email? The Problems with Email Email wasn’t invented with a wide spectrum of collaborative work in mind. It was invented for sending letters in the standard format of the pre-electronic era. (A telling sign is that the CC refers to “carbon copy” from the time when letters were duplicated with carbon paper placed between multiple sheets of paper in a typewriter.) In the time of the Pony Express, people knew better than to send multiple copies to their peers asking them to change something and return the revision by Pony Express. They knew then that it would end up in a complete mess. Multiple copies, multiple versions and multiple people who can change 90
Slide 103: 5 The Anatomy of Collaboration the data leads inevitably to a nightmare. With email, colleagues who receive and modify a document are going to be calling each other, arguing about who has the most recent version and whether all the changes the others made are also present in that version. It often ends badly. The problem with email is its versatility, which results in an email overload problem. Or as Chris Rasmussen put it, “Email is not bad, it’s simply overused. It’s a ‘when you only know how to use a hammer, all problems are nail type things.”4 Email Collaboration Edit Send eiv e Wiki Collaboration View Save Re c eiv e Re c Edit Edit View View Edit View Save Send Edit Send Save View Figure 5.4: Email vs. Wiki Collaboration Many organizations did research into to the email overload problem in the last decade. They all reached the same conclusion: people will get “email paralysis” if we keep sending mails as we are. We need to reexamine our use of email, since it is costing us productivity and performance. An article in the New York Times with the title “Struggling to Evade the E-Mail Tsunami” warns that email has become “the bane of some people’s professional lives.”5 Email administrators are asked to allow for bigger attachments and more storage capacity. Some email providers have started providing email boxes that span many gigabytes. This might sound very handy, but keep in mind 4 5 http://www.wikinomics.com/blog/index.php/2008/03/29/wiki-collaboration-leads-to-happinessupdated-and-revisited/. http://www.nytimes.com/2008/04/20/technology/20digi.html?_r=3&oref=slogin&oref=slogin&oref =slogin. Re c eiv e Re c eiv e Save View Edit View Edit View Send Edit 91
Slide 104: Collaboration in the Cloud that most email is unstructured, it is often redundant, and the information in the archive is not shared with anyone(!). There are now even special courses for managers that teach them how to handle email: a tool has become a task in itself? The courses arm the manager with simple advice such as, “don’t keep your email program open the whole day; only answer mail at beginning or end of your work days.” With advice like that, we are taking a step back in the direction of the Pony Express era: send a letter and wait a few days, not knowing when the receiver will answer it. Steve Whittaker from the University of Sheffield conducted research into how email could more effectively be used for task management. He summarized the problems people have with using email for working together, under the title, “Why Email is Not Enough”.6 He noted that there are numerous problems with using email for task management. Users relying on email complain about: • Forgetting commitments to themselves and others (tasks that they “owe” or are “owed”); • Tracking global task status (it’s hard to abstract from multiple messages to determine where a project currently stands); • Determining who’s involved in a complex task; • Integrating information across different technologies (people may communicate about a task in email, voicemail or using IM – and it’s often hard to combine information); and • Managing attachments. How many times have you had an email exchange with someone that took many more emails and a lot more time than expected, when picking up the phone would have made the conversation much quicker and more efficient? 5.3 Other Tools, Other Activities There are limitless options these days. There are so many new tools available to communicate and collaborate with others that for any situation there is a tool that will fit. Email platforms will lose the battle, even though they have expanded over time. Most professional email platforms have facilities for assigning tasks, tracking and reporting progress on these tasks, automation, and even scheduling and archiving functions, but the use of these functions is 6 http://www.daimi.au.dk/~bardram/ecscw2005/papers/whittaker.pdf. 92
Slide 105: 5 The Anatomy of Collaboration limited. Email is competing with many new tools that are better at collaboration, task management, instant communication, sharing persistent data, etc. Many new tools also belong to the “Web 2.0” world. The online places where we can talk and converse with others are all part of the global conversation, as we discussed in Chapter 3. When we collaborate with others, we can do so in many places. We can use online conference calls that record our meetings, we can use online whiteboard to collectively draw diagrams or we can jointly edit Excel spreadsheets. We can post our findings on our blog, use Twitter to communicate about minor updates or use MSN Messenger to ask questions directly. Figure 5.5, from The Conversation Prism by Brian Solis and Jesse Thomas, shows what the current landscape of communication channels looks like, and the options we have when choosing our tools.7 Comment & Social Bookmarks ReputationCrowdsourced Content Blog Platforms Blogs/Conversations Pictures LiveCasting – Video & Audio Wiki Music Blog Communities Events Conversations The Art of Listening, Learning & Sharing Micromedia Lifestreams Documents Specific to Twitter Video Aggregation Video Location Source: Brian Solis & Jesse Thomas Customers Service Networks SMS/Voice Social Networks Niche Networks Figure 5.5: The Conversation Prism 7 http://www.briansolis.com/2008/08/introducing-conversation-prism.html. 93
Slide 106: Collaboration in the Cloud Ultimately, the different tools will enable different behavior. Deliverables and information that is meant to be longer lasting will find a more persistent medium than email. Reference materials find a resting place where people know how to find them. Fleeting information will fade to the background if it is sent using the right channels instead of being mixed with the persistent information. The activities of people will focus again on the value they can add to a conversation, a deliverable or a process. We are no longer managing our email but managing value, deliverables, performance and innovation. So let’s take a closer look at the capabilities that make up collaboration. What are the things we can use tools for? We will discuss: • Build deliverables, build knowledge; • Interaction; • Presence and status; • Relations and social structure; • Discovery, search and find, create structure; • Notifications; • Integration. In the rest of this chapter we will elaborate on these elements, and give examples of tools that can be used to address them. Build Deliverables, Build Knowledge Collaboration is about working together and creating deliverables. People may work as a team to write a document, come to a decision or evaluate a product (i.e. produce an evaluation). The most basic level of support will help us build something together, combine our efforts into one, and find a way to store our efforts and make them available to us and others. Early on, people realized that “collaboratively building a deliverable” could be used to improve knowledge management. Knowledge management is like a holy grail for organizations. To learn from experiences and to build a dataset that can be used to respond to any circumstance is a highly desirable goal. If we can entice people to contribute to a “corporate knowledge” deliverable, did we find the grail? (yes, of course! The crux being in “if we can entice…”). 94
Slide 107: 5 The Anatomy of Collaboration There are many tools to support the creation of deliverables and build knowledge, and perhaps not surprisingly the simplest is the most popular. A wiki supports both creation (editing in a browser) and storage online: A wiki is a page or collection of Web pages designed to enable anyone who accesses it to contribute or modify content, using a simplified markup language. Wikis are often used to create collaborative websites and to power community websites. The collaborative encyclopedia Wikipedia is one of the best-known wikis. Wikis are used in business to provide intranets and Knowledge Management systems. Ward Cunningham, developer of the first wiki software, WikiWikiWeb, originally described it as “the simplest online database that could possibly work. – from http://en.wikipedia.org/wiki/Wiki Wikis have certain advantages over email, such as the option of versioning, maintaining one central point of storage where data can always be accessed (instead of being hidden on someone’s computer, see also Figure 5.4). Mostly, wikis allow the users a lot of freedom to continually interact and improve the information. Wikis, but especially the more advanced tools (such as SharePoint) that enable the collaborative building of deliverables, offer extra features that support reliable collaboration such as versioning and security. Also there are collaborative tools that use peer-to-peer models to store and share information. While the term still has an ambiguous ring to it due to illegal downloads that use the same models, P2P is actually a valuable way to share information without the need for centralized servers, storage and control. Using Groove, clients will attempt peer-to-peer connectivity. Failing that (due to firewalls, offline clients, etc.) Groove will use a Groove Relay Server to queue the deltas untill the clients can be contacted. Figure 5.6: Peer-to-Peer Architecture 95
Slide 108: Collaboration in the Cloud Microsoft Groove is a peer-to-peer solution that has the ability to share information so that people inside and outside the company can work together on the same documents. It is simple to use and doesn’t need central servers to store data (though it can be connected to SharePoint). Instead, documents are spread out among all the collaborators. Office Groove 2007 is a collaboration software program that helps teams work together dynamically and effectively, even if team members work for different organizations, work remotely, or work offline.8 Windows Live Mesh is a Microsoft product, currently in beta version only, that is a more infrastructural approach to sharing information – something like sharing a folder on a network. Live Mesh has the ability to share folders between different kind of devices, so you can share any kind of file type with friends, family and colleagues, so long as they are in your so-called “Mesh.” It can also be used to synchronize the data on multiple computers. Figure 5.7: Live Mesh 8 http://office.microsoft.com/en-us/groove/HA101656331033.aspx. 96
Slide 109: 5 The Anatomy of Collaboration A feature related to the tools above is tagging: with tagging people add metadata to assets. Tagging is not a single tool but a feature found in many tools and websites. It is essentially a method of building knowledge: classifying or categorizing things based upon the keywords or terms (tags) people use to describe them. If tagging becomes a habit, the value of information will increase rapidly, leading to more accurate information. Like tagging, a rating mechanism is found in many tools (“did you find this page helpful”). Both are aimed at gathering metadata about assets. We will give some examples of tagging when we discuss “discovery” below. Interaction This is what we think of when we talk about collaboration: to interact with others! Interaction is what drives the whole conversation economy. We connect to others and interact with them. Interaction with customers helps build trust, gives us knowledge about what drives them, and lets us gather feedback or even advice about the services or products. Interaction with other people helps drive innovation and the creation of new ideas. Some well-known tools for interaction are online conferencing tools (using audio, video and presentation), direct messaging, making it possible to “chat” with someone directly, chatboxes, forums, VoIP-calls and, of course, email. Figure 5.8: ICQ Instant Messaging Instant messaging: ICQ “I seek you” was the first internetconnected instant messaging program, released in 1996. It enabled users to send each other messages, send files and see each other’s availability. These programs got more and more sophisticated, and at this moment they offer video conversations, gaming, and sending offline messages on a multitude of platforms, including your cell phone. Currently, ICQ has lost its market leadership to Microsoft, Google and Yahoo, who each provide their own instant messaging solution. Figure 5.9: Cell Phone Instant Messaging 97
Slide 110: Collaboration in the Cloud Also, blogs and microblogging are a great example of the read-write web, the internet where two-way communication is the norm: information is published on a blog and someone else can comment on it. Anybody can start a blog. Many companies already have blogs, to keep customers, suppliers and the rest of the world up-to-date on what’s happening within the company, such as product upgrades, or just to encourage people to feel good about the brand and get to know the company through seeing some real people’s words and faces associated with the company name. A blog (a contraction of the term “Web log”) is a website, usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order. “Blog” can also be used as a verb, meaning to maintain or add content to a blog. – from http://en.wikipedia.org/wiki/Blog Personal Bloggers 79% of total Corporate Bloggers 12% of total Professional Bloggers 46% of total Figure 5.10: Bloggers9 While a blog may seem like a one-way tool (publishing posts), the reality of successful blogs is that, for the most part, authors of different blogs respond to each other, engage in long-running debates, and form a network of likeminded people that is indeed very interactive. 9 Source: Technorati. 98
Slide 111: 5 The Anatomy of Collaboration Why blog? Speak my mind on areas of interest Share my expertise/experiences with others Meet/connect with like-minded people Keep friends/family updated on my life Get published/featured in traditional media Make money/supplement my income Enhance my resume Attract new clients to my business 0 14 26 24 21 32 62 73 79 20 40 60 80 %Respondents 100 Figure 5.11: The reasons people give for blogging10 Microblogging is similar to blogging, with the difference being that the posts (entries) are short sentences that share status, events, thoughts or observations. Twitter.com is the leading service for microblogging. There is also Yammer, which is much more focused on the corporate world by allowing only people within a company to connect and share. It might address some of the security and confidentiality questions related to cloud offerings, but it has the disadvantage of not enabling the interaction with people outside the organization that can be so beneficial. Presence and Status Where are you? What are you doing? Can I interrupt? What are you working on? Do you have time for...? All very common questions when working with someone face-to-face. The same is needed online, to find who is available or what channel to use when communicating with someone. Sharing your “status” ranges from a simple “free/busy” status, to a status that tells people “this is where I am, this is what I’m doing, this is how long it will take, these are the people I’m working with.” In the same sense, even the “out-of-office” assistant used when people are on vacation is a presence-indicator, as are your MSN Messenger status and your phone’s voicemail announcement. Knowing the status of people is essential for using more real-time communication tools, and it allows for more dynamic, flexible and autonomous 10 Source: Technorati. 99
Slide 112: Collaboration in the Cloud behavior. Instead of simply waiting, the sender can take the proper action to ensure the best chance of a quick and correct response. Instant messenger tools were the first to explore “status” more closely, because the way these tools work is by interruption, which creates the need to manage interruptions. You wouldn’t want to be interrupted with “instant” questions all day when trying to get some important work done. It also asks of your colleagues to actually respect your status, very similar to real-life Cubicle/Office Etiquette Tip 2 and Tip 3: Don’t interrupt someone who is on the phone by using sign language or any other means of communication. Think twice before interrupting someone who appears deep in thought.11 Instant messaging programs usually show icons representing your contacts, and for each contact it will show the status. MSN Messenger, Microsoft’s instant messaging program, and its corporate version Office Communicator, have, for example, options to set your status to Busy, Away, On the Phone and some other default statuses. You’re also free to enter your own status (“Feeding the baby”). This gives friends and colleagues who are connected through an instant messenger program an easy way to see whether you may be contacted. Figure 5.12: Buddy List Status might be quite detailed. On the most information-rich end of the spectrum are the microblogging sites such as Twitter, FriendFeed and Jaiku. Here, the messages originally intended to convey status information have become part of an ongoing discussion with short messages. They now provide a way to let everyone know what you’re doing, what’s on your mind and what interests you. You might see it as a crossover between blogging and cell phone short message services (text messages), allowing users to write brief text updates (140 characters) and publish them. And the frequency of mes11 http://tips.learnhub.com/lesson/page/2791-30-tips-on-officecubicle-etiquette. 100
Slide 113: 5 The Anatomy of Collaboration sages itself can also become relevant, given this example from someone who used it to figure out why people weren’t responding to his email: I checked into their Twitter stream to see what they’d been up to throughout the day. In one case, the person was at a conference. In the other, I wasn’t sure, but the person hadn’t sent a message in hours, so he or she was clearly offline for a duration of time.12 Microblogging has even been used by a teacher to keep track of students, to send them messages and interact with them, in order to understand what keeps them busy. The continuous stream of someone’s status updates, thoughts, event and responses to others is the online representation of his or her life: they are so-called “Lifestreams.” Increasingly, lifestreaming is part of everyday life for people. Relations and Social Structure We like to work with people we know and trust. Building and maintaining connections between people and business is important for us in our working lives, but also in our private lives. We like it more, and we can be more productive if we know what to expect and we know who is the expert on a certain topic. If we know the network, we know the people. If we know the people, we can properly evaluate their roles and know what added value each brings to a collaborative initiative. The famous Metcalfe’s law13 states that the value of any network is proportional to the square of the number of endpoints. Or at a personal level: having connections to twice as many people is four times more useful. In the “real” world we build networks and make friends during social or business events. People meet, exchange ideas, talk about their interests, or simply start by giving each other their business cards. Online relations and communities share these characteristics with face-to-face networks and relations. A connection between people can be made when there is something in common, when there is the same interest or when one has information the other is interested in. 12 http://www.chrisbrogan.com/twitter-as-presence/. 13 http://en.wikipedia.org/wiki/Metcalfe’s law. 101
Slide 114: Collaboration in the Cloud Figure 5.13: A graph displaying a social network. It is interesting to note that networks are dynamic and self-organizing Although face-to-face networks and online networks share the same characteristics and benefits, creating and maintaining relations is different. Online there is a bigger difference in how people know each other and how strongly they are connected with someone. In the digital world, people tend to build much more expansive networks than in real life: a contact list of hundreds of contacts and friends is common. Some of these contacts will be true friends; others we might be less intimate with. We could call a relationship with someone who shares the same interests and the same network of friends a high value relationship, a strongly tied friendship. In a strong relationship you know each other very well. In the real world, these kind of “strong” connections are very common. 102
Slide 115: 5 The Anatomy of Collaboration The other connections we have we could call weakly tied relations. They are people you know, whom you may have met briefly but do not know well. You know enough about them to keep in touch, know where they work and what they might help you with. In online communities these weakly tied connections are made easily – easier than in the real world. Both types of relationship have their benefits. … strong ties are unlikely to be bridges between networks, while weak ties are good bridges. Bridges help solve problems, gather information, and import unfamiliar ideas. They help get work done quicker and better. The ideal network for a knowledge worker probably consists of a core of strong ties and a large periphery of weak ones. Because weak ties by definition don’t require a lot of effort to maintain, there’s no reason not to form a lot of them (as long as they don’t come at the expense of strong ties).14 Nodes often aren’t as important as the connections between them. Reductionist science and analysis from the 19th and 20th centuries focused on nodes. I believe 21st century science, economics, political science, and computer science will use more complex systems theory to understand the interactions between chemicals, speculators, nations, and users.15 The first tools that supported the storing of contact information were not all that different from using a rolodex, a list of people you know with some key contact information. The Contacts section in Microsoft Outlook also has this rolodex functionality, with the added option to store extra information about your contact, such as birthday, manager, their kids etc. The additional information is used to be courteous to your contacts and to maintain a good relationship with them. It is always nice if someone seems to remember the names of your seven kids. The main problem with this way of storing contact and additional relationship information is that it’s hardly ever up to date or, even worse, it may be incorrect. This is where the online, social network software comes in. It allows you to stay current with your relationship information. Your contacts will maintain their own information. A site like LinkedIn, a social network focused on professional relations, gives the user the ability to connect to colleagues, 14 http://blog.hbs.edu/faculty/amcafee/index.php/faculty_amcafee_v3/the_ties_that_find/. 15 http://radar.oreilly.com/2008/10/the-connected-economy.html. 103
Slide 116: Collaboration in the Cloud former colleagues, clients, and partners. When a colleague moves to another job you are still connected and have the newly updated information available. In this way, maintaining relations and staying connected is much more accurate and convenient. Social networks are expanding, too, sharing more information, and giving you not only the names of your contact’s seven kids but also their vacation photos. MySpace and Facebook are examples of popular social networks that are used more in the private sphere, though private and personal are increasingly mixed. Figure 5.14: MySpace co-founder Tom Anderson, arguably the most popular individual on the internet with 240+ million MySpace friends (he is added by default to every MySpace account) 104
Slide 117: 5 The Anatomy of Collaboration Figure 5.15: LinkedIn SNS [Social Network Software] lets users build a network of friends, keep abreast of what that network is up to, and even exploit it by doing things like posting a question that all friends will see. All of these activities, especially the latter two, seem like they’d be highly valuable within a company, especially a large and/or geographically distributed one where you can’t access all colleagues just by bumping into them in the hallway.16 Online networks commonly have the ability to import contacts from a client application like Outlook contacts. This is useful during the initial phase of a social network, but isn’t the killer feature on which to build and find new relations and contacts. It’s importing your strong ties, those contacts with whom you already have a good relationship. Finding and connecting to new contacts, coming up with new ideas for innovation and new sources for knowledge sharing – that is more important. Intuitively speaking, this means that whatever is to be diffused can reach a larger number of people, and traverse greater social distance (i.e., path length), when passed through weak ties rather than strong. If one tells a rumor to all his close friends, and they do likewise, many will hear the rumor a second and third time, since those linked by strong ties tend to share friends. If the motivation to spread the rumor is dampened a bit on each wave of retelling, then the rumor moving through strong ties is much more likely to be limited to a few cliques than that going via weak ones; bridges will not be crossed.17 16 http://blog.hbs.edu/faculty/amcafee/index.php/faculty_amcafee_v3/the_ties_that_find/. 17 http://www.stanford.edu/dept/soc/people/mgranovetter/documents/granstrengthweakties.pdf. 105
Slide 118: Collaboration in the Cloud Social Network Software is enabling the creation of these valuable weak-ties in different ways. For example, most of them have functionality like “maybe you also know these people,” or “viewers of this … also viewed.” This technology helps to build bridges between networks and helps to connect with the rest of the world. Figure 5.16: Six Degrees of Separation Six degrees of separation: if a person is one step away from each person they know and two steps away from each person who is known by one of the people they know, then everyone is an average of six “steps” away from each person on Earth. The translation of the six degrees of separation into business terms is that if you need someone to help you, the best person in the world can be reached in at most six steps.18 Figure 5.17: Three degrees of LinkedIn connections of one of the authors 18 http://en.wikipedia.org/wiki/Six_degrees_of_separation. 106
Slide 119: 5 The Anatomy of Collaboration Using the Network for Rating and Reputation An interesting thing happens when our friends and contacts start rating information they find. We know who they are and we trust their judgment. So now we have a method that almost automatically starts to make sense out of the information overload: things online my friends deem valuable must be valuable. But also: companies, product and services that my friends deem valuable must also be valuable to me. Figure 5.18: Digg Even if we don’t know the people, statistics can help us. It’s almost a democracy: the more people are drawn somewhere, the more valuable the information from that place probably is. There are several mechanisms that support rating of webpages. The biggest examples are social bookmarking sites such as StumbleUpon, Del.icio.us and Digg. These sites enable the “social discovery” of anything of interest online. Digg.com is a website that makes it easy for people to share (review) information and news posts, while other people can vote and comment on those articles. It helps to sort through the multitude of blog posts and articles and bring up the most “valuable” content of the moment. It is also is a trend-sensitive mechanism: if something is “hot,” it tends to push other things to the background. 107
Slide 120: Collaboration in the Cloud Figure 5.19: Del.icio.us is another social bookmarking site that provides mechanisms for rating and adding comments and tags to sites There are many other sites19 that use a similar kind of voting mechanism. DZone is a link-sharing community site for developers that uses “voting buttons,” which have the power to move an article up or down a list. Figure 5.20: A message on DZone.com with Vote up/Vote down buttons The social bookmarking sites also help you find new friends: for example, StumbleUpon will analyze your preferences (which pages did you like, which not) and match these with the preferences of other “stumblers.” The people that most closely match appear on your “friends” page where you can look at their profiles, read their blogs and perhaps get in touch. Be forewarned when trying out these tools: they can be addictive, because they will lead you to increasingly interesting internet resources. For businesses, the most volatile examples are sites where the subject of evaluation is the companies and their services. If you use Amazon and eBay to do trade, the trust people will have in you, and thus the amount of business 19 http://www.blogmarketingtactics.com/social-bookmarking/social-bookmarking-top-links.html. 108
Slide 121: 5 The Anatomy of Collaboration you will do, is directly proportional to the evaluation scores people give. On sites such as Angieslist or Yelp people evaluate companies, on TripAdvisor they evaluate holiday destinations, on JobVent they evaluate workplaces etc. For any kind of product, service or company a place can be found online where people can share their opinions. Discovery The so-called knowledge worker spends a considerable amount of time looking for documents and information by browsing the intranet, portals or searching the internet. The internet gave people access to billions, probably trillions, of articles, news items, songs, videos and other kind of information. With millions of people connected to it, many adding more information daily, we end up with more than we can handle. Just as an example, at YouTube 13 hours of video is uploaded every minute, which is roughly equivalent to recording 800 TV channels simultaneously. According to Technorati, in 2006 there were 1.5 million blog posts in a week, which means there were about 10 new blog posts every second.20 And every one of these posts, videos, presentations and comments could have information that is relevant to your business, to your strategy or to your clients. 133 million blog records indexed by Technorati since 2002 7.4 million blogs posted in last 120 days 1.5 million blogs posted in last 7 days 900,000 blogs posted in 24 hours 76,000 blogs with Technorati Authority of 50+ Top 100 blogs by Technorati Authority Technorati Authority is the number of blogs linking to a website in the last six months. The higher the number, the more Authority the blog has. Figure 5.21: Blog Volume 20 http://www.nytimes.com/2008/08/16/technology/16tube.html?_r=1&8dp&oref=slogin. 109
Slide 122: Collaboration in the Cloud According to a study from Basex21, information overload is now costing businesses $900 billion per year in wasted productivity. The first, most basic solution available is a search engine such as Microsoft Enterprise Search or the “Googlebox.” Nowadays we can install search solutions to find all sorts of internal and external information. Old email archives, reports, graphics, numbers: anything can be indexed and found, provided you know the right search terms. That is where the problem lies: a lot of information is not stored with the right metadata. Some search engines can be configured to deduct meta-information from the place where things are found. But there is another solution. We have seen “rating” as a mechanism to make valuable information easier to find. Another, similar mechanism is “tagging.” Where rating basically adds a thumbs up or thumbs down as meta-information, tags can convey much more information. They help catalog. Tagging makes searching for information easier. Adding tags to documents, photos, videos or something else is classifying the content with simple oneword descriptions. Think about how stock photo companies have long been using this type of metadata in the keywords they use to catalog photos. Figure 5.22: Tagging Photos All kind of tools have the ability to add tags to content. Many file formats even embed the information in the files themselves. As an example, with Microsoft Word you can add tags to documents in the save dialog screen, and Windows Live Photo Gallery has a sophisticated mechanism to recognize faces, so you can add tags for contacts from your address book. Also, most blog engines have tagging capabilities. 21 http://www.micropersuasion.com/2008/12/calculate-the-c.html. 110
Slide 123: 5 The Anatomy of Collaboration Figure 5.23: Windows Live Photo Gallery Tagging is using human insight to classify things. For humans, tagging is simple and straightforward. It should become a natural part of everyday life for people: whenever we open or touch an item we would quickly add some tags to help us and others find it later. We could tag documents and pictures as well as people and events. If it is easy enough to do, this might be how we would achieve the holy grail of knowledge management. For computers it is still a great challenge to get the right grasp of concepts and context. Serious scientific effort is put into automating analysis and classification of items. Natural Language search and Artificial Intelligence are the topics of research. One of these efforts is ALIPR, which is a service that strives to automatically tag images and make them searchable. Figure 5.24: ALIPR 111
Slide 124: Collaboration in the Cloud Web 3.0 Understanding how to query the web is valuable and having relationship ties is even more important. Connections are helping us find information by adding meta-information and rating content. Meanwhile, there is already talk of Web 3.0, where the web of pages (Web 1.0) and the web of people (Web 2.0) are enhanced with even more logic and functionality that should make the web intelligent, turning it into “the semantic web” and forever solving our problems with searching the web. From Readwriteweb.com: Web 3.0 offers detailed data exchange to every point on the Internet, a “machine in the middle,” with three main characteristics: 1. Smart internetworking The Internet itself will get smarter and become a gathering tool to execute relatively complex tasks and analyze collective online behavior. 2. Seamless applications Web 3.0 theories suggest that all applications will fit together, a continuation of open standards where all applications will be able to communicate. APIs will read data from any platform and provide a single point of reference. 3. Distributed databases Web 3.0 will need somewhere to store very complex and memory-intensive information. It will require ontologies to establish relationships between information sources, search millions of nodes, and scan billions of data records at once.22 Notification Staying up to date is an important part of working in a collaborative environment. You need to know what your peers are working on and, from a company point of view, you need to know what people are saying about your product and also what your competitors are doing. We don’t want to be continuously searching for the things we need to know, and also want to be notified immediately when something important happens. 22 http://www.readwriteweb.com/archives/semantic_web_advertising.php. 112
Slide 125: 5 The Anatomy of Collaboration Figure 5.25: Office Communicator23 News Feeds Web feeds are a bit like a subscription to a webpage. Using a standard message format called RSS (Really Simple Syndication) we can use a special reader to alert us whenever, for example, a webpage has changed, new information has been posted or new comments have been added. RSS is a family of Web feed formats used to publish frequently updated works – such as blog entries, news headlines, audio, and video – in a standardized format. An RSS document (which is called a “feed,” “web feed,” or “channel”) includes full or summarized text, plus metadata such as publishing dates and authorship. Web feeds benefit publishers by letting them syndicate content quickly and automatically.24 Most collaborative systems like blogs, portals with document libraries such as SharePoint, wikis and microblogging sites offer RSS feed by subscription. Initially RSS was used for updates on web pages only, but now it is used to 23 http://office.microsoft.com/en-us/help/HA102064651033.aspx. 24 http://en.wikipedia.org/wiki/RSS_(file_format). 113
Slide 126: Collaboration in the Cloud communicate notifications of all sorts of events. Even system administrators can use RSS to communicate about server status updates. RSS feeds can be read and aggregated in different client software tools or on specialized websites. Microsoft Outlook and Internet Explorer both have a mechanism to subscribe to RSS feeds. The benefit of using a feed reader, or so-called feed aggregator or news reader, is that information from different places on the web can be read in one place: all notifications, all “news” is in one place (and no longer in our email inbox). Figure 5.26: RSS Feeds The web-based readers offer the same functionality as client software: they aggregate feeds and make them accessible from one place. They also offer some interesting extra functionality that takes advantage of its inherently cloud-like nature, such as sharing feeds with friends through social networks. Figure 5.27: Bloglines Notifications Are Interruptions? Most of us are already used to notifications. When we receive an email a small balloon will pop up on the desktop to notify us that there is new email. Also, Windows itself has many kinds of notification messages: you’ve seen one when the connection to the network is lost. Other kinds of tools also have notification mechanisms. MSN Messenger can notify you when your friends 114
Slide 127: 5 The Anatomy of Collaboration come online or when they want to talk to you. Twirl, a desktop version of Twitter, can notify you when someone whose twitter messages you want to see posts a new message (a tweet). Some notifications are important, some not; it depends on what you are doing. Since many systems are sending notifications to you, and trying to get your attention, you might end up paralyzed by the information overload. It is easy to subscribe to lots of valuable sites and blogs, and it is important to stay up to date about important people, information, companies, and projects, but other feeds might have lower priority. The generation of digital natives seems to be able to cope better with the constant interruption, but the resulting continuous partial attention has an enormous effect on people. Linda Stone has written about this: “Like so many things, in small doses, continuous partial attention can be a very functional behavior. However, in large doses, it contributes to a stressful lifestyle, to operating in crisis management mode, and to a compromised ability to reflect, to make decisions, and to think creatively. In a 24/7, always-on world, continuous partial attention used as our dominant attention mode contributes to a feeling of overwhelm, over-stimulation and to a sense of being unfulfilled. We are so accessible, we’re inaccessible. The latest, greatest powerful technologies have contributed to our feeling increasingly powerless.”25 A filter mechanism is a must. You need some filtering to be able to distinguish between company related, project related, personal or system related notifications and to stay focused on your job. Managing your interruptions is important if you want to ensure that you actually get your work done. Some notifications need to pop up the moment they arrive (“your project has a new deadline, and it is tomorrow”). Some notifications you need to see when you have the time for them (“we will have a new team member”). Other notifications may be left for you to read on your phone in the moments spent waiting for the bus (“the new company slogan is…”). To manage interruptions, it helps to get accustomed to prioritizing according to groups. Think of how a cell phone will allow you to create different ringtones alerting you to calls from different groups or individuals. Microsoft 25 http://continuouspartialattention.jot.com/WikiHome (no longer available). 115
Slide 128: Collaboration in the Cloud Office Communicator has a similar notification-filtering mechanism, called “Interruption Management”: Interruption Management: You can assign a Team access level to other contacts to create a preferential list of people who are allowed to communicate with you when your Presence status is set to Do Not Disturb. In addition, you can manually set your Presence status to Do Not Disturb from the Presence menu or from incoming IM, Call, or Conference alerts. When your Presence state is set to Do Not Disturb, you see, by default, only urgent alerts from Team members. Integrating All into a Personal Mix There are now so many information channels that people are looking for ways to connect and integrate them. One way is to use tagging with social networks to prioritize blog notifications. Interact with a group of colleagues and receive updates when someone posts a message to your forum. There are many ways to integrate, from complete automated processes to a simple portal interface that displays different components. A special type of integration is the mashup. Mashup Integration “Mashup” is a term used for a solution that is created by combining and configuring multiple underlying services. It is a flexible way to easily create solutions that fit the individual need. When we want to optimize collaboration between organizations, or we find recurring patterns in our collaboration (e.g. we have a certain meeting every week for which we need to book a room, order meals and organize transport), mashups can provide support at a suitable scale for this collaboration. Wikipedia defines mashup as a “web application hybrid,” which combines data from more than one source into a single integrated tool. The most common examples are the combinations of geographic visualization with other information, like the visualization of Outlook contacts within Live Maps, or Google Maps with location information of real-estate data. The combination of the two different services makes a new application with more functionality than the different parts provide. 116
Slide 129: 5 The Anatomy of Collaboration One of the main advantages of mashups is they are “self-servicing”: employees, businesses and consumers can make their own mashup, gather services they use and combine them however they want in whatever way works best for them. They are the true tools of a “prosumer.” Mashups can be created manually using the interfaces available from the different services. But there are also web-based mashup editors. Microsoft Popfly and Yahoo! Pipes are examples of tools where you can drag, drop and link different services to each other, thereby creating your own mashup in a matter of minutes, without the need for (much) programming. The underlying technology of web services provides standard interfaces that allow easy, though sometimes still fairly technical, combination. 26 Figure 5.28: Enterprise Mashups in the Web 2.0 Era26 Figure 5.29: Microsoft Popfly offers a drag-and-drop integration solution to create your own mashup in minutes 26 http://blogs.zdnet.com/Hinchcliffe/?p=35. 117
Slide 130: Collaboration in the Cloud A much simpler way to integrate is to link different services together without many steps or tools but by simply using a ready-made tool that integrates a number of services. There are specific tools available that connect multiple media and feeds into one. And the tools themselves have started to knit together, as well. Most social networks have RSS feeds available, and social networks have integrated “status” information or can connect to Twitter. Facebook, for example, has the “where are you what are you doing” box in the upper right. Yahoo! Fire Eagle takes the concept of presence awareness even further with various tools, including the ability to share your geographic (GPS) location with friends. Figure 5.30: Yahoo! Fire Eagle Another simple example of integration is Xobni (inbox spelled backwards). It shows what is possible when you combine online communities with an email client. Xobni is an add-in for Microsoft Outlook. It automatically shows information about your contacts and how many emails you have sent and received. It also connects with LinkedIn to show a selected contact’s public photo and contacts that are related based on your email traffic. It is a simple tool that can help prioritize email and enhance the social structure of collaboration. Perhaps the ultimate combination of news and social networks is FriendFeed: it allows you to combine all your activities online into one location. This information in turn is available to your network. In this way you can stay current and keep others current. FriendFeed can integrate your blogposts, Twitter tweets, YouTube videos, slideshare presentations and any other online activity. It also has the option to use “rooms” for filtering information. 118
Slide 131: 5 The Anatomy of Collaboration Figure 5.31: Xobni Figure 5.32: FriendFeed 119
Slide 132: Collaboration in the Cloud Finally! The End of Email? A revealing statement that hints at what a new way of work could look like was made by a student talking to her older brother: “I only use email to get hold of older people, like you.” It might seem impossible, but try to imagine a workplace where the first thing in the morning is not opening the email. If we were to use all these other options we have available, our email traffic could greatly diminish: • People: for information about people, informal notes on what they are doing, profile information, and notes on their friends and their activities we go to a personal profile page (their FriendFeed27). • Deliverables (documents, events, corporate decisions): for working on items we want to be working on, we visit an online place where the deliverable is central, which may be a project, document, event or any other lasting asset. • Questions and answers: we post them to a forum that is visited by our colleagues and friends. An archive function allows us to look up questions that were asked before. • Updates, notifications: these are grouped in our newsreader. We prioritize the notifications and can decide to take action on some and ignore others. • Checking if someone can be reached, quick interactions: we use instant messenger for quick questions or chitchat. • Task assignment and progress reporting is better done using an online project management tool. • Etc. If we think this through, very little remains for which email is really the best and only solution. And once other solutions have the majority of the traffic, email will quickly die down: if everybody is posting messages on my Facebook “wall,” that’s where I’ll go for messages and I’ll start to forget my email. And although information can be spread over many sites, this does not mean we have to surf to all these locations: personal portals and dashboards will integrate all of them into one, enhanced by mashups and other integration tools on the desktop. Even your email client can be the one that integrates them all. 27 FriendFeed.com. 120
Slide 133: 5 The Anatomy of Collaboration 5.4 Collaboration – Software Matrix Every kind of collaboration needs specific tools. What kinds of collaborations are there? In the previous paragraphs we discussed several types of collaboration tooling and their capabilities – what they are and what you use them for. But when to use which is a more difficult question. People use email for all kinds of collaborations, but in what kind of situation might you prefer to use blogs or wikis? To answer this you have to separate collaboration into several parts. Up until recently we still used the telephone as our primary real-time, synchronous communication tool. When we have to work in groups, we use it for conference calls. Not something Bell thought of when he invented the telephone. There is a key difference between synchronous and asynchronous communication, just as there were key differences between the early telegraph and the telephone. Software that facilitates communication and collaboration is available in many forms, from mail systems, where communication is provisioned in an indirect way, to interactive games where people play in real-time against each other. The time-place matrix28 pictures this. This matrix has two dimensions in which collaboration differ: place and time. People may sometimes work on the same project at the same time in the same place – for example, in the overly used on-site meetings. People may also work on the same project in different places at different times – for example, by outsourcing to India, where there are different time zones. In practice, email may be placed in the different time / different place quadrant and instant messaging will be more directed to the same time / different place quadrant. Each quadrant represents a specific need that must be met by collaboration tools. When communicating in the different time / different place quadrant there is a need for a message box, such as an inbox, where we will receive our messages. This is different when we want same-time communication. In that case, there is no need for an inbox, but rather a notification mechanism alerting the receiver that someone wants to communicate and alerting the 28 Johansen, R., 1988. “Current user approaches to groupware.” In R. Johansen (ed.), Groupware: Computer support for business teams. Free Press, New York, 1988. 121
Slide 134: Collaboration in the Cloud sender as to whether the person he wants to contact is available, neither of which is necessary in a different-time situation. Different Place Same Same Different Time Figure 5.33: Time-Place Matrix Besides the capabilities the tools must have, the people who want to communicate must understand what kind of communication is to take place. Sending an urgent message via a tool that supports a different time / different place mechanism isn’t the best option. This is something you see happening often: people sending an urgent email expecting that the receiver will read it in real-time, not knowing that he just did the management course “How to overcome email overload” where they told him to open email only twice a day. Different Virtual Classroom (Centra, Horizon Wimba, Instant Messaging) Simultaneous interaction across distances AnyTime AnyWhere AnyOne Email, LMS, LCS (Blackboard, WebCT) Interaction across time and distance Place Same Class Face to Face Interaction Same Ongoing Coordination Learning Laboratories Different Time Figure 5.34: Time-Place Matrix Applied on eLearning29 29 http://projects.coe.uga.edu/epltt/index.php?title=Computer_Mediated_Instruction. 122
Slide 135: 5 The Anatomy of Collaboration Many-to-Many, Many-to-One, One-to-Many, One-to-One Another dimension to explore is the one of “how many people are involved.” Collaboration can take place with just the interaction between two people or with larger groups. Different ways to interact ask for different tools. We can draw a matrix and use it to situate the different collaborative tools. Depending on the intended use, different tools will be better suited in certain situations than others. As you can see at a glance, most tools are well suited for asynchronous collaboration between many people (in this context, many being “more than two”). Many Video conferencing Presence awareness Whiteboarding ... Way Team workspace Discussion threads Wikis Blogs Shared bookmarks Social networking Tagging Syndication E-mail Scheduling Task management ... Different One Instant messaging Audio conferencing ... Same Time Figure 5.35: Collaboration tools mapped on the Time-Way Matrix. The number of people working together is recorded on the Way axis Knowing and understanding in what quadrant your communication and collaboration takes place helps to choose the right platform. Each tool has its pros and cons in any specific quadrant, being better suited for one than another. There is no platform available that provides seamless communication in every quadrant. Even email as a conversation tool is really only ideally suited for a one-to-one situation where we have to keep in mind that it is asynchronous: the receiver might first read your mail three days from now. 123
Slide 136: Collaboration in the Cloud 5.5 Conclusion As we have seen, there are great tools available. “Out there” on the wide open internet they have a following of their own, and nothing is keeping us from either joining these tools on the internet or (if we have to) implementing our own “internal” copy. A corporate “Twitter” might relieve email overload. A corporate Facebook could improve the social cohesion within the company. While email will be long-lived in the business world, expect to learn new tools and start working in the different ways enabled by these tools. And if we really want to enter the conversation, we have to be “out there” in the real world. Once the groundwork is in place, we can select the right tools or leave people to find the right tools themselves. The provisioning model for these tools and services will be a hybrid: some things will be internal to the company, while others will be in the cloud. What this looks like, what the impact is and how we can make the right decisions is the topic of the next chapters. We will discuss Software + Services and get more specific on the topic of Social Computing for business. 124
Slide 137: 6  Groundwork for a New Organization The ways that people work together shift over time, which can affect your culture of collaboration. More important, the introduction of collaboration technologies can also change the culture of collaboration. If handled properly, the tools and the culture will co-evolve. – Dennis Kennedy1 6.1 Introduction Collaboration is essential to business and many tools are available to support the various capabilities that make up collaboration. But just installing the tools, or using a tool from the cloud, does not make you an “Enterprise 2.0” overnight. The “build it and they will come” adage does not apply. This chapter will go into the groundwork, the other elements that need to be in place before collaboration can be successful. It will address the “soft” part of collaboration, addressing elements such as trust, culture and reward. Empty SharePoint, Messy Wikis – a Disaster Scenario Unfortunately, the scenario described below is all too common. It describes how incorrect adoption of tools can hinder collaboration before improving it. It is the case of an organization going about the implementation of collaborative tools in the same way they select and implement any other kind of software tool. Imagine a company where knowledge workers are becoming less and less productive because they spend more and more time searching for the right information in the vast directory structure of their network. It is hard to document repeatable tasks and knowledge leaves the company whenever an employee finds another job. The company sets out to solve these productivity and knowledge management problems and forms a team of IT and (some) business people to find a solution. 1 denniskennedy.com/blog. 125
Slide 138: Collaboration in the Cloud A top-down, centralized decision is made, and the company decides to install SharePoint as their primary collaboration platform. After the decision is made and the software is acquired, the company starts with the necessary investment in infrastructure and begins training operations how to install, organize and manage the collaboration platform. When everything is in place, the infrastructure is working, backup procedures are in place, guidelines are written and the operations team knows what to do, the transition to support is done, and the new collaboration can start. Most likely the initiative now has a fancy name and perhaps a slogan. Senior management then sends a company-wide email announcing, with pride and joy, that there is a collaborative platform available for anyone to use. There are private sites for every employee, wikis, blogs, discussion forums and portals. Management expects new forms of collaboration to start soon, and is happily calling their organization 2.0-ready. They surely have solved all the productivity and knowledge sharing problems. The employees receive the announcement emails and are pressed to “use it every day.” Curious and perhaps a little excited, some – not all – of the employees visit the enterprise portal and look around, fill in their personal details and perhaps upload a profile picture. Figure 6.1: SharePoint Personal Details Page 126
Slide 139: 6 Groundwork for a New Organization Looking further, the employees discover that there isn’t any real information (yet): the wiki pages are empty, blog posts are rare and the forums don’t have any questions. After a quick look around, the employees go back to their work, thinking, “I will get back later this week when there will be more information.” Meanwhile most of the employees still use email as their primary collaboration tool, not knowing about or not comfortable with the collaborative aspects of the newly introduced portal. Figure 6.2: Empty Wiki After a slow start, some people will have found their way to the portal. Most likely these are the newer generation or the people that had specific needs or were tired of using file-shares to transfer large files. With some people using the new platform and most people still using email, they will have the worst of both worlds: for example, there will still be uncertainty as to which is the latest version of any document. People will be looking in several places to find the current status, and it’s unclear. If people from different departments were to try to create a proposal together, a lot of effort would go into coordination and integration of the different pieces of the proposal. The wiki pages, intended to be changed and updated by all to provide a common knowledge base, are empty or contain temporary notes, scribbles or information copied from elsewhere. The team portals and project portals have some structure but most elements are empty or outdated. The collaborative space looks like an abandoned town with empty houses. 127
Slide 140: Collaboration in the Cloud It is clear that this scenario is not the scenario management had in mind when introducing the new platform. It is also clear that introducing a new platform in itself will not change the way people work. Of course, in real life, many organizations realize that the human aspect of any implementation is important and doubly so with collaborative technologies. Not addressing the use beforehand seems like a beginner’s mistake. So what do we need to think about in order to avert disaster scenarios? Expecting Miracles? Before we go any further, we need to examine the expectations. Especially we need to compare “internet scale” to “corporate scale.” If we see successful sites online with a thriving online community, where people are adding and improving information every day (e.g. Wikipedia) and uploading many interesting documents continuously (e.g. Slideshare) we cannot help but want this for our own company, too. The problem is that you probably do not have enough employees to achieve the same traffic to an internal site. Only 1% of all internet users in your country is still a multiple of 100% of all of your employees. And since some initiatives need some critical mass to survive, it pays to look for alternatives. It might just be possible to become part of the external community instead of recreating one “indoors.” Also, don’t be disappointed when “only” 10% of your workforce joins an online community: the numbers are still much higher than in the general public! 6.2 What You Need to Succeed Creating new modes of collaboration supported by technology can only be done by addressing the human aspect. More specifically, we need to address some of the worries and obstacles people encounter when collaborating using technology. The three most important concerns are: • Trust. Trust is a condition for social interaction. People will only work with people, companies, tools and information they know they can trust. Before we can expect collaboration to take off online, there must be a way for people to get this “trust.” And a topic closely associated with trust when it refers to people is Identity. • Collaborative culture. If one individual is the greatest collaborator in the world, he or she is probably not getting anywhere. Only when all people involved are part of the same collaborative culture will new levels of creativity and productivity be reached. A collaborative culture consists of many things, including: 128
Slide 141: 6 Groundwork for a New Organization Collaborative leadership; Shared goals; - Shared model of the truth; and - Rules or norms. Reward. Changing the way people work takes effort, so it must be clear for the parties involved what they will gain, at a personal level, from collaborating in a new way. Surprisingly, a “reward” for successful collaboration is most often of a non-financial nature. - • Figure 6.3: A graphic used in a blog discussion by Sam Lawrence of Jive software to explore how, in his view, collaboration is composed of coCreation, coOperation, coLearning, coOrdination, coRespect and coSolving, with the individual “me” back on top2 6.3 A Model for Trust Who can you trust these days? And when you expect someone to collaborate with you, how can you prove they can trust you and the information you provide? And if I trust you, and you trust your friend Joe, can I also automatically trust Joe? Does Joe make good on his promises to me as he does on his promises to you? 2 http://gobigalways.com/anatomy-of-the-enterprise-octopus/. 129
Slide 142: Collaboration in the Cloud Trust, and its closely related cousin transparency, come to mind when talking about the internet and technology. Or, as a great quote goes, “Trust is the business word for love.” For some companies, “trust” is what builds the brand. Larry Page, co-founder of Google, said this in discussing Google: One of the big assets we have is a big consumer brand. It is very clear that our users are everybody and that is who we are answerable to. We need you all to trust us or else we have no business. (Sunday Times)3 Why would Google have no business if we, the consumers, didn’t trust them? It seems obvious that if we didn’t trust the search results, we wouldn’t use Google. It is the same with other aspects of collaboration: if we don’t trust the people, tools or information, we will not use them. In some instances it’s not even that we don’t trust the information, but that we have no way of knowing if we can trust the information. Someone writing on Wikipedia suggests, “Trust is a relationship of reliance. A trusted party is presumed to seek to fulfill policies, ethical codes, law and their previous promises.”4 If we are confident that the promise will be fulfilled, we will trust. If we see a recurring pattern of promises that are being fulfilled, our trust will increase. If we see even one broken promise, the trust can evaporate instantly. Trusting People Trust is not a hard fact or a number we can quantify like a credit rating. There are no universally accepted certificates of trustworthiness. We are most familiar with the concept of trusting people: our family and friends gain a reputation based on our prior experiences with them and the social structure to which they belong. It works the same way within collaborative initiatives: the more we know of someone, and the more we know of the organizational and social structure they are part of, the better able we are to determine whether we can trust that person or not. This is also where online social networks provide value. 3 4 http://business.timesonline.co.uk/tol/business/industry_sectors/media/article3997912.ece?token=null &offset=12&page=2. http://en.wikipedia.org/wiki/Trust_%28social_sciences%29. 130
Slide 143: 6 Groundwork for a New Organization In collaboration across geographical or organizational boundaries, trust gets special attention: if I have never seen the person I am working with, it is harder to build trust. If we cannot look someone in the eye, trust doesn’t come automatically. This is one reason why the collaborative tools that focus on supporting online conferencing are including video-feeds as much as possible. In 2007, the Economist Intelligence Unit published a paper (sponsored by Cisco) with the title “Collaboration: Transforming the Way Business Works”: The paper reported that there is a widespread imperative to adopt collaborative business models and noted that trust is a critical building block in collaboration. However, those seemingly simple conclusions can quickly become complicated in today’s business world, where the forces of globalization and the knowledge economy are converging with technology and demography.5 Figure 6.4: Requirements for Excellence in Collaboration In this study the researchers found different levels of intensity with which people are working together. It starts from a situation where there is no trust 5 See http:// graphics.eiu.com/upload/cisco_trust.pdf, where the paper is discussed in the preface to the Economist Intelligence Unit’s more recent paper, “The Role of Trust in Business Collaboration.” 131
Slide 144: Collaboration in the Cloud at all and people don’t really collaborate but processes need to be explicitly coordinated. As levels of trust increase, different methods of collaboration become viable, and move through cooperation up to true collaboration where people are working together to achieve a shared goal. Circles of Trust Blogosphere/ Trustworthy sources Edubloggersphere/ Friends of friends Friends & Trusted acquaintances Search Wikis Blogs Social bookmarking Me Social media services Web browser Microblogs/ Presence tools Figure 6.5: Trust levels and several collaborative tools.6 This diagram shows how different tools (or media) can be used with different levels of trust: closer to me means greater trust. It is also a great illustration of Marshall McLuhan’s statement that “Technology is an extension of the human body”7 6 7 http://www.flickr.com/photos/nessman/2590572476/. Global Village, 1953. 132
Slide 145: 6 Groundwork for a New Organization Identity In order to trust someone, I must be able to identify that person. To delegate trust, I must be able to accept the reference of someone I recognize. To enable collaboration, you need a way to identify people. Especially when we are using cloud computing to offer collaborative solutions, this is an important challenge. Microsoft was one of the vendors offering Microsoft Passport as a way to uniformly identify people online, but due to other trust issues, this didn’t gain the wide acceptance expected or hoped for. By now, the focus is on open identity standards (OpenID) that are being implemented by a range of vendors, among which Microsoft but also Facebook and others. Here we also see the crossover from trusting people (who is working with me) to trusting the technology (can the technology prove to me who I’m working with). When an organization is looking to initiate collaboration between multiple parties, it must first find a way to identify the different parties in such a way that they can start to build trust. Trust and Technology Whenever we are using technology to communicate and collaborate, the platform itself becomes a factor in the collaboration. If our email is unreliable, the process will break down. If the site we are using to exchange information is not secure, we will not post our materials there. If people can take on other identities, I am less likely to build a trust relationship based on someone’s “avatar” (their online representation). Technology itself can also get in the way of trust: for example, this popup message below will appear when a web browser needs to update itself to show a certain webpage. For a common business-user, this might look puzzling: the browser asks if I trust the website, but it does not tell me why I should trust that site or how I can find out if a site is trustworthy. Users must figure out by themselves, without any additional information, whether to trust this site. 133
Slide 146: Collaboration in the Cloud Figure 6.6: Trusting a Website From an organizational perspective, this means the end users must become web-savvy: they must develop a sense of security online. What sites can I trust, what are normal procedures, how do I recognize a secure site, etc. (Which, when you think about it, is not all that different from what banks do to train their customers when they are banking online.) Service-Level Agreements Trust depends on how much someone is able to deliver as promised, so describing the promises makes sense. In the Software as a Service space, this means describing the service-level agreement. In these cases we replace blind “ trust” by an actual contract (or at least a formal expectation). Most services that are generically available online, which you can use without needing to sign a contract, have a very simple service-level agreement: if the service is up, it’s up; if the service is down, it’s down. There are very few guarantees, and if you want better guarantees you most likely will have to pay for them. What happens when your Gmail goes down for a day? Or what if your website disappears and there is no backup? What do you do if the free website statistics engine you are using messes up the statistics, rendering a year’s worth of data useless? Who can you call, and how fast will they respond? There are many different approaches to building trust. Salesforce.com, the CRM as a service provider, offers insight in their uptime to gain trust from their customers (trust through transparency). When we as consumers can see what the uptime is of their services, at least we know what we are buying. Amazon has an approach where they simply offer money back in case their AWS cloud services fail. It remains to be seen whether you are adequately compensated for your loss if the compensation for a day lost in sales is just the rebate of one day’s fee for hosting the services, but at least it is an explicit SLA. 134
Slide 147: 6 Groundwork for a New Organization Figure 6.7: Trustsaas.com is providing real-time insight into the status of several services available online8 Figure 6.8: AWS Service Health Dashboard 8 http://trustsaas.com/. 135
Slide 148: Collaboration in the Cloud Downtime, or more explicitly, not having access to online services, depends upon the weakest link. Especially when combining services from multiple locations and multiple service providers, the combination may soon prove to be too unreliable to use for important business processes. On the other hand, in-house technology is not without its downtime either, and SaaS providers generally have better uptime and response times than the internal IT systems. For the end user, only the reliability of the whole solution matters, as illustrated by fragments of a discussion on LifeHacker.com on the topic “Do You Trust the Cloud?”: I don’t trust the cloud anymore than I trust my hard disk. In fact, I’ve had more trouble with the cloud than I have had with hard disks – from site outages like yesterday to cable outages to a beehive in my cable box that killed my cable with honey! Ubiquitous sync is the answer. The info should reside on PC, Smartphone and Net otherwise it is only partially usable. Are we talking downtime, data loss, security, privacy or what? I trust in Google, maybe because they haven’t bitten me yet. But I’ll change my tune in a second if they lose all my data or lock my account without reason.9 And then there is the reliability of the service provider itself, the one hosting the technology. Especially in these financially turbulent times, the choice of service provider warrants some extra attention. You don’t want to choose a service provider that might go out of business anytime soon. Especially among the providers whose services are paid for by advertising, this unpredictability leads consumers to be extra cautious, to the advantage of wellestablished vendors like Microsoft. And one smart move to limit risk is always to back up your data elsewhere, just in case. Trusting Information We can trust the people we are collaborating with, and we can trust the technology and the provider of the technology, but can we be sure that a given document in our online portal is indeed the latest report we need? If you have ever used an online collaborative solution, you have probably come across documents where you weren’t sure whether they were drafts or final versions, or whether the information in the document was really true. Or you 9 http://lifehacker.com/400268/do-you-trust-the-cloud. 136
Slide 149: 6 Groundwork for a New Organization may have seen a poll on the intranet, but you are not sure who participated and what the value of the poll really is. People and companies that use collaborative tools need to make a conscious effort to create information, to turn data into information, to add value to statistics, etc. A great example is Wikipedia: how can you trust the information somebody has written about a topic? People who love Wikipedia will say that “the crowd” will make sure the content is correct. Yet anyone can edit a wiki, so who can say that vendors or competitors are not polluting Wikipedia with marketing statements instead of real information? Or what about the topics that are most heavily debated? A good sample of pages with a dubious history can be found in Wikipedia’s own very long list of “Most vandalized pages.”10 However, the quality of entries is uneven; sometimes entries are even factually incorrect. Wikipedia founder Jimmy Wales admits on the website that “on any given day, [the quality of] any entry might be up or down.”11 Truth be told, Wikipedia has cleaned up drastically in recent years by putting more emphasis on references, removing original thought and checking if, for example, politicians or companies are editing their own information in their favor. The way in which Web 2.0 technologies can help make information more reliable and trustworthy is by combining the trust in people, platform and information. Trust Needs a Network On Amazon.com we can see product evaluations. On eBay.com we can rate the seller AND the buyer. Reputations here are extremely valuable. On LinkedIn people are encouraged to recommend the people they think stand out. Many other sites use the opinions and evaluations of “the crowd” to help customers make decisions, by helping to make sense out of the multitude of options. They build trust by creating the right expectations. 10 http://en.wikipedia.org/wiki/Wikipedia:Most_vandalized_pages. 11 http://www.mg.co.za/article/2005-11-07-can-you-trust-wikipedia. 137
Slide 150: Collaboration in the Cloud If we want to have people, technology and data we can trust, they must be connected and part of the same network. Interesting developments in the “collaborative sensemaking” area are solutions such as IBM’s experiment with Many Eyes12 where visitors were invited to add opinions and ideas to datasets and visualizations. In a corporate world, this could be applied to sharing important information with all people inside (and outside?) the company to try to make sense of the data, predict possible new developments and come up with new ideas to respond to the trends in the market. Another interesting experiment online in the same space is Debategraph13 that facilitates online debates by structuring the arguments of both sides. One can imagine what this could have done for many financial institutions had it been possible to use these kinds of tools earlier. Figure 6.9: Customer Ratings 6.4 Collaborative Culture There definitely is a cultural aspect to collaboration. For one thing, the perception people have of the possibilities for (and consequences of) collaborating will determine their actions. Or as one employee once said, “I’m trying to develop an area of expertise that makes me stand out. If I shared that with you, you’d get the credit, not me…. It’s really a cut-throat environment.” 12 http://manyeyes.alphaworks.ibm.com/manyeyes/. 13 http://www.debategraph.org/. 138