Indian Enterprises Ready To Go 2.0?

While the first generation of the web took more than 5 years to penetrate into enterprises in the form of intranet and internal collaboration, Web 2.0 threatens to swoop over with a higher zeal. Cited as the marketer’s dream - technologies like blogs, wikis collective intelligence tools, peer to peer networking, RSS, user generated content were widely talked about in the recently held Web Innovation Conference. But are large Indian enterprises digging into their pockets to adopt these tools?

A recent McKinsey report on ‘How Businesses are using Web 2.0’ claimed that India is one of the countries showing a high interest in investing in Web 2.0 technologies like collective intelligence, peer to peer and social networks with verticals like Retail, High Tech and Communication being the most interested. These companies face a constant need for rediscovering and collaborating with the end consumer and Web 2.0 gives them the perfect platform for it.

More from Biztech

Future Group - Reliance Retail Deal approved by CCI RBI ban on cryptocurrencies takes effect; prohibition could force investors to tap the black market

Three major advantages for adopting these technologies stand out. Increasing collaboration both with internal clients or employees and external ones is the biggest advantage. Analysts point out key drivers as the expansion or decentralisation of work. According to R ‘Ray’ Wang, Principal Analyst, Forrester Research, “Collaboration tools increase in value and importance when companies expand operations, work is conducted remotely, and other stakeholders are included in the delivery of work. These stakeholders could be contract employees, partners, and suppliers.”

Early adopters like Infosys and Suzlon Energy already believe in the advantage of taking their networking a step ahead. While Infosys has a blog called ‘Think Flat’ for its employees to collaborate with each other, clients and other techies, Suzlon Energy launched an internal knowledge management portal in March ’07. For Suzlon, information sharing between employees based in 11 countries and the accessibility of knowledge was the main motivation. Simply put, a problem solved in one location could help a power plant in another saving both time and money.

Not to be left far behind, Reliance Communications is actively working on setting up a 2.0 based intranet environment merging different tools like blogs, mash-ups, administration and social networking tools into a common portal application for employees. Sumit Chowdhury, the CIO feels, “With the availability of technologies it was only logical that we enable it in the enterprise environment. Instead of the employees having to go to different programmes for their workflows leave management, blogging and networking, we brought it into one common environment. With an application like this, employees can easily collaborate among themselves and with the end consumer. The ideal situation is where the customer needn’t tell us what he wants, he can build it himself.”

Interaction with end consumers leads to wonders in terms of product development. Websites like Amazon.com that allow users to review products gain more trust among consumers and give marketers an insight into behaviour. Chinar Deshpande, former CIO, Future Group mentions, “Exciting things like collaborative product development are happening in the retail sector. If direct customer feedback is incorporated into demand forecasting, supply chain efficiency can be improved dramatically.” Making the consumer a part of decision making process enhances their experience, giving a clear competitive advantage for early adopters.

The third unignorable factor is the availability of these technologies at a low cost. Most agree that the investment is minimal for companies where IT has reached a level of maturity. As Deshpande puts it, “For efficient use of a concept like Web 2.0, you need to have primary investment done in very good infrastructure – whether its connectivity, high end integration tools or middleware. That is anyway required for many other business applications. Companies have already made or committed investments in building the technology platforms which will facilitate setting up of Web 2.0 kind of environment very easily as and when they deem necessary.”

Wang feels adoption patterns in India will be similar to that of North America and Europe where early adopters favoured discussion threads and wikis in Q3 2007. “From an investment perspective, we see a leaning towards what ever is cost effective and in some cases, what is free. This is similar to the initial adoption of collaboration tools such as email, instant messaging, and calendar, where some executives made the decision to use a service like MSN, Gmail, or Yahoo. Once the value is realised and the need for privacy established, we saw the shift to Outlook and other packaged products,” adds Wang.

Many collaboration tools are deployed as Software-as-a-Service (SaaS) offerings and do not require any infrastructure, be it Typepad or Blogspot for blogging. Moreover, CIOs believe that a Return on Investment is achieved by default as there is an increase in productivity and trying hard to justify RoI is a waste of time.

If the investment level is low, and justification of RoI is unnecessary, why are CIOs still reluctant to take the plunge? The issues are related to both demand and supply. Arun Gupta, CIO, Shoppers Stop is an active user of Web 2.0 tools like blogging and professional networking and has discovered many benefits but the enterprise is neutral to its impact. Manish Choksi, CIO and Strategist, Asian Paints feels that the Web needs to become more of a habit among Indians before there’s a real demand for deploying these kinds of tools in the enterprise. As Chowdhury puts it, “In India, a lot of our work is still done on spreadsheets. Moving from that to a portal or blog environment is a big leap.”

However, there are some shortfalls faced on a practical level as well. While IT biggies like Oracle, SAP, IBM, et al have solutions like SAP’s NetWeaver for portal management and other first generation knowledge management and collaboration tools, there is lack of a single productised offering when it comes to 2.0 tools. Various fragmented solutions are available, but the onus eventually falls on the company’s in house overworked and understaffed IT team. Deshpande believes that with the current IT boom, it’s hard to maintain a competent high quality in house IT team. “Youngsters would rather make dollars and pounds in the IBMs and Accentures of the world than sticking to an IT function in a non IT organisation.” Wang adds, “With under-budgeted and understaffed teams, business users end up having to “go around” the user to achieve any gains in productivity. IT has to come back and reverse engineer solutions or deliver secure solutions that are integrated back to the IT backbone. The rate of change is increasing and making it quite difficult to set useful policies and procedures.” Moreover, at this free innovation stage in which tools are evolving everyday, it is practically impossible to keep par and replicate them at an enterprise level at the same speed.

Analysts and CIOs have no doubt that the next 3 years will see a surge in web 2.0 adoption in Indian enterprises. Wang predicts India to be slow to adopt by 6-12 months compared to its western counterparts, but will do so with full force and commitment when it does. Deshpande compares the Web 2.0 trend to that of mobile phones, and the humongous change it brought about in businesses and business models because of its popularity. Initially dismissed as a basic communication tool, a lot of enterprise applications are now built especially for it.

The real question is, with a 3.0 universe made up of converged devices, artificial intelligence and semantic Web already being forecasted around the same time period, will it be a smarter move for enterprises to make late entry an advantage and directly head for the latest? Or will skipping a vital step prove to be costly for enterprises? A question best answered by time, it’s hard however to ignore the advantages Web 2.0 tools provide that go far beyond being just the sum of its parts. The ‘marketer’s dream’ may be the IT department’s nightmare, but enterprises that act quick enough, can make it a profitable reality.