Connectivity Crucial for Retailers

The Enterprise 2.0 show reveals a uniform vision for the new class of technology.

BOSTON-Enterprise 2.0. Maybe it's because of the "Star Trek" associations with the name, but to me, Enterprise 2.0 sounds like something that will be happening in the far-off future. Yet as demonstrated by the expo floor and sessions of the Enterprise 2.0 Conference that started beaming down here June 9, it is happening now and will likely have a major influence on how your company conducts business.

So what exactly is Enterprise 2.0? I went to the conference expecting to find numerous competing voices, each trying to define the space for their own purposes. What I actually found was a dedicated community with a clear vision of what Enterprise 2.0 represents. In a nutshell, Enterprise 2.0 represents connectivity.

On the surface, this doesn't sound like anything new. And in a sense, it's not, as many of the core features of Enterprise 2.0 are business extensions of the social networking activities that have been occurring for the last few years on sites like MySpace, Facebook, and YouTube. However, businesses have never before connected and collaborated, internally or externally, the way they can with Enterprise 2.0 technology.

In short, Enterprise 2.0 uses instant messaging, blogs, Wikis, RSS feeds, live forums and other means of Web-enabled instant connectivity to form participatory communities. Members of these communities can connect with each other at any time, in some cases keep track of each other's location and availability, and freely exchange ideas, opinions and knowledge.

The conference focused a majority of the attention on internal Enterprise 2.0 networks: companywide blogs, where employees can share their thoughts on important corporate issues, or real-time collaborative networks that allow employees of the same company who are located in different regions or even countries to effortlessly work together on projects. Retailers can and do benefit from this type of internal collaboration. However, we all know that for retailers and brand manufacturers, the real value of this type of connectivity lies in directly connecting with the customer.

And some companies are doing just that. In one session, Daniel Kraft, an executive with Enterprise 2.0 technology provider OpenText, described how Motorola actively solicits consumer feedback and involvement in its product development efforts. Kraft partially credited Motorola's success in the cellular phone market to its innovative engagement of users in the creation and marketing of products.

Kraft compared Motorola's experience to that of German cell phone manufacturers, who he said have largely failed in the marketplace because they refused to engage their customers. Kraft jokingly referred to his German heritage when criticizing Germany's cell phone providers, but he wasn't joking about the necessity of actively involving customers in business decisions.

In another session, Steve Diamond, a top product marketing executive with Oracle, said that company has created an online community of 17,500 users to help generate ideas for product development. The community is open to anyone who wants to join, inside or outside the company, and has produced more than 1,100 ideas to date. While Oracle is not a retailer per se, this concept of creating an open community is applicable to retail.

Of course, all this open communication and connectivity is not risk-free. During the same session that Kraft extolled the Enterprise 2.0 virtues of Motorola, Tom Jenkins, executive chairman and chief strategy officer of OpenText, cautioned that all the legal issues associated with e-mail also apply to Enterprise 2.0. He warned that any digitally produced content can be subpoenaed in a lawsuit and that senior management of a company is ultimately liable for any material facts revealed by any employee in a digital format.

Jenkins also said that contrary to popular belief, bandwidth is not free, and due to increasing demands placed on bandwidth by the expansion of Enterprise 2.0 technology, it will become a variably priced commodity like oil. Despite these warnings, Jenkins was just as enthusiastic as Kraft about the immense business potential held by Enterprise 2.0.

What does it all mean? Ultimately, each retailer will have to decide how Enterprise 2.0 best fits its individual business model and customer base. But rest assured that Enterprise 2.0 does have a place in your enterprise, and you do need to give your customers a more active and prominent role in how you conduct business.

If you can't see how Enterprise 2.0 applies in your own organization, look deeper. Not being able to recognize the potential of Enterprise 2.0 is similar to not being able to recognize the sucker in a card game-the sucker will most likely wind up being you.

Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out's Retail Site.