Business Innovation Will Come from Organisational Openness, Says Gartner

Organisations Must Use IT to Exploit Collaboration and Communities beyond Traditional Business Boundaries

Cannes, France, November 7, 2007 – Shrinking returns from business automation and the impact of Web 2.0 are conspiring to revolutionise the workplace and change the way we do business forever. Speaking at Gartner Symposium/ITxpo in Cannes, France, Gartner analysts today said that organisations need to respond to these changes and open up their organisations to a wider collection of business and social networks, to allow a more collaborative and innovative workplace.

�Businesses have long understood the value of growing and supporting the business environment in which they operate,� said Nikos Drakos, research director at Gartner. �Collaboration can be supported in new ways, among customers, partners and teams and IT has a fundamental role in embedding these practices in the business.�

Gartner predicts that by 2009, six out of ten new collaboration-related IT projects will seamlessly incorporate supplier, partner, and customer personnel, heralding a move away from the traditional, closed, inward-looking organisation to a more open, collaborative and innovative environment.

For example, even the once-conservative pharmaceutical industry is already embracing this new openness. It is taking a lead in decentralising decision-making, collaborating across the ecosystem and making proprietary information publicly available. The pharmaceutical giant Pfizer recently announced a collaboration project with Sermo, the fast-growing US social networking site for doctors. Sermo and Pfizer will work together to establish how drug companies can best communicate with physicians online, and provide drug and disease information to them on-demand.

In those situations, communities are driving business as �we� become smarter than �me�, speeding discovery and transformation. Although IT was not driving this organisation-without-walls collaborative innovation approach, it was a critical enabler.

Mr Drakos added, �Innovation in the future will depend increasingly on extending your business to include a wider community and this will not be without risks. An active, managed approach to open innovation will enable organisations to take collaboration to the next level and compete fully on a global level.

For those industries and organisations still contemplating being more open, the biggest issue is likely to be changing the culture inside the organisation to look favourably on collaboration and supporting social interaction. Mr Drakos advised, �Companies need to assess the social culture and processes in the workplace and use social software, exploiting IT to prioritise openness, usability, people-centricity and flexibility as well as encouraging staff to help others.�

Demand for improved information sharing along business functions is already driving solid growth for collaboration technologies. This is reflected in the growth of the enterprise social software market. Gartner estimates that the enterprise social software revenue market will reach $226.9 million in 2007 and will increase to more than $707.7 million by 2011, reaching a 41.1 per cent compound annual growth rate (CAGR) from 2006 to 2011.

At present, e-mail is the most widely used tool for collaboration but its use is so prolific that, at times, it has the opposite effect as users can not recognise important messages from �noise�. Other social software applications, such as wikis, discussion forums and blogs have the advantage of providing user-friendly and flexible ways to aggregate, organise, share and amplify the value of personal knowledge and experiences. �Improving intraorganisational and interorganisational communications with people and groups that may not be able to physically interact is the ultimate goal and organisations need to look at new and innovative ways of making this happen,� said Mr Drakos.

In the automotive industry, Ford Motor Company recently launched the �Go!� Global Marketing Network to bring together disparate employees in multiple locations and foster collaboration and shared working practices. The initiative has been so successful that other groups inside Ford are keen to develop their own networks.

Gartner said that social interaction is the way most value is delivered in the modern work environment and predicts that by 2012, the primary role of business networks will be to support social interactions, not routine business transactions. Employees are accustomed to using such technologies and innovations in their personal lives and are keen to expand this experience to the workplace. Gartner said that rather than just saying �no� to social networking in the business, organisations need to create the structures and processes that allow it to realise business value.

�Many IT leaders fear the consequences of opening up their organisations and the use of social networking as a business practice,� said Jeff Mann, research vice-president at Gartner. �One of the advantages of social software is balancing the need for control with the need for flexibility with its inherent potential for chaos. We believe that between traditional, rigid closed ways of interacting and direct peer-to-peer interactions, there is a role for an open and adaptive structure.�In order to innovate, businesses cannot concentrate solely on controlling what the users do and remain a �closed shop�. IT needs to loosen control without losing control, to allow good things to happen,� he added.

�IT must accommodate users� need for flexibility and openness while protecting the organisation from excessive risks. Businesses must accept that they will experience some inevitable failures to enable innovative projects to flourish.�

Organisations that fail to embrace social software in their business may well find themselves faced with staff discontent and impassiveness and expensive security and compliance problems. Gartner predicts that by 2009, at least 70 per cent of organisations without an IT-supported deployment of blogs and wikis will have multiple unofficial deployments among their users.

�Ultimately, the success of social software within your business will be limited not by the opportunity, but your willingness to accept change,� concluded Mr Mann.

About Gartner:

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