inicio mail me! sindicaci;ón

The Next Industries to be impacted by Enterprise 2.0?

by Sean McClowry

Some industries are a more natural fit for the techniques and technologies of Enterprise 2.0 than others. In this post, I’ll focus on two industries that have a lot to gain – Retail Banking and Health Care. These industries would also face significant questions around use of these techniques related to information security, stability and the degree of open communications that should be applied.

Decision Criteria

The simple model below associates Enterprise 2.0 benefits to the nature of a company. The greater the number of “highs”, the greater the benefit. Lots of organizations score well on this model, but some moved particularly early. Companies that benefited from the “long –tail” shaped web 1.0 and early web 2.0.

Initial Movers – Retailers and Media

The business models of many retailers and media companies were fundamentally changed by the internet. New entrants such as Amazon are now leaders in the industry. These industries shaped the web and were shaped by it. By the time web 2.0 came around, a number of new entrants were once again shaping the industry.

Next Enterprise 2.0 Movers?

There are two industries that seem to stand out – Retail Banking and Health Care. If we look at the model above, they actually score higher than many initial movers in categories such as technology complexity.

They have many similarities in their business:

  • Both are consumer needs driven
  • Both have high technology costs that are driven by years of legacy infrastructure complexity.
  • Both have huge information management challenges as a result of this infrastructure
  • Recent regulations have driven costs – even when the regulations were not significant – as they lacked agility

Take, for example, the retail side of a bank against the model above:

Dimension Description

Level Correlation

Low

Med

High

Customer Orientation Customer insight and engagement will help the organization sell more effectively

x

Agility The organization needs to change its systems frequently to meet new business requirements  

x

 

Stickiness The organization benefits from a more significant and engaged interaction with the customer  

 

x

Technology Cost Overall technology cost due to legacy systems is significant and there would be major benefits to “radical replacement”  

 

x

Network of Trust There are business benefit to a greater relationship with the customer through open and transparent communications  

 

x

Long Tail Tapping into the “unlimited supply” of the internet (as a provider or consumer) provides a significant benefit to the company’s business.  

x

 

Information Centric Information drives this organizations’ business – about the customer and for the customer.  

 

x

I’m a bit more liberal when applying the model to health care and I’ve referred to the patient as a customer and changed the wording from the perspective of a universal health care provider. This approach does assume business model changes to take advantage of the “long tail of health care” through better use of information and telemedicine.

Dimension Description

Level Correlation

Low

Med

High

Customer Orientation Customer insight and engagement will help the organization function more effectively

 

 

x

Agility The organization needs to change its systems frequently to meet new business requirements  

x

 

Stickiness The provider benefits from a more significant and engaged interaction with the customer  

 

 

x

Technology Cost Overall technology cost due to legacy systems is significant and there would be major benefits to “radical replacement”  

 

x

Network of Trust There are business benefit to a greater relationship with the customer through open and transparent communications  

 

x

Long Tail Tapping into the “unlimited supply” of the internet (as a provider or consumer) provides a significant benefit to the company’s business.  

 

x

 

Information Centric Information drives this organizations’ business – about the customer and for the customer.  

 

x

Both industries face significant challenges

Both industries are under a lot of pressure. With banks my experience is that the complexity really wears them down and agility is very difficult to achieve. Banks make a lot of money, but new entrants with models like ING direct (reduce complexity) and prosper.com (collaborative community) may cause them trouble.

In terms of healthcare, an avalanche of costs is breaking current systems, whether in the countries like the US or in those applying more universal health care models. Providers need to better manage their information and establish a trusted relationship with the patient. Finding better ways to leverage collaborative technology can help in this area.

Implementation Path

I see both of these industries as having a lot to gain, with some challenges to overcome. Both have privacy concerns and the need for high levels of data security is fundamental. Release stability will be critical to customers. Key questions would also need to be asked about the pros/cons of customer collaboration.

The next few years should be very interesting for both.

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • E-mail this story to a friend!
  • Print this article!
  • TwitThis
  • del.icio.us
  • Facebook
  • Reddit
  • bodytext
  • Google
  • StumbleUpon
  • SphereIt


4 Comments »

Yonni HarifFebruary 19th, 2008 at 12:07 pm

Sean,

Very insightful analysis of the drivers within these industries. In fact in our conversations with customers and prospects, especially in the financial sector, we have seen significant interest in “pushing the envelope” beyond the traditional enterprise solutions. Many have tried to develop collaborative platforms internally, but without great success. I agree that we will soon see a spike in the adoption of E2.0 tools in these spaces.

Sean McClowryFebruary 19th, 2008 at 1:14 pm

Yonni,
Glad you liked the approach. Yes, I think there is a good opportunity for things to start moving forward here. Collaborative platforms could be particularly helpful to accelerate the uptake and there is a great market opportunity for the right solutions.

Nate NashApril 30th, 2008 at 2:42 pm

Sean - Good stuff.

What do you think about the IT professional services industry? Seems like Enterprise 2.0 could move the needle in a much needed (and differentiating) direction for dimensions like Customer Orientation and Agility. If one accepts that the consulting business model is all about staff leverage, Enterprise 2.0 could definitely go a long way in turning a consultancy’s ability to execute along you dimensions into a value-add/cost-reducer.

But to your overarching point, I guess that means they (we?) aren’t inherently ready now…

Sean McClowryMay 14th, 2008 at 11:34 am

Hi Nate,
Sorry on the late follow up! I think we definitely have a lot to gain from Enterprise 2.0. Its a business that is all about IP - what worked, what didn’t, plus bringing innovative new ideas and people - working as part of a community. Enterprise 2.0 provides the framework for both to work better.

What I do think is that more structure is needed for Enterprise 2.0 than Web 2.0. All these ideas need a framework to inter-operate so they move in a direction that provides value to the business and moves inline with project delivery schedules. Structure can create hurdles for collaboration so it will be an interesting case for how Enteprise 2.0 evolves.

Actually I think we are very ready and there is a huge need for professional services firms - I was just talking about banks and healthcare as I think its an even bigger transformation with more to gain as they are bigger industries (by many measures Retail Banking is the biggest business in the world).

Your comment

Want an image to appear near your comment? Go to gravatar.com

HTML-Tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>