There is a growing suspicion that Web 2.0 will prove to be as over-hyped and ultimately hollow as the first wave of dot-com mania. But despite the appearance of the ultra-hip ‘fashionistas’ that have latched on to Web 2.0, at its heart lie some profoundly staid, established technologies. Social networking, wikis and blogs may currently garner the attention, but it is the collaboration they promote that is set to revolutionise business practices.

The enthusiasm for Web 2.0 is not merely the premature blustering of suppliers and consultants, says Ollie Ross of blue chip user group the Corporate IT Forum (Tif). The majority of Tif’s members, she says, are beginning to embrace collaborative working, considering it strategically important to the future of their business.

Anecdotal evidence of this kind is supported by a raft of recent research reports, including one from the Economist Intelligence Unit: it found that more than 50% of executives believe collaborative working “will either form an important part of their firm’s competitive advantage or will actually be central to its survival over the next three years.” Business models are already changing to take advantage of these collaborative partnerships.

Evidently, the age of the collaborative business is dawning, says David Coleman, founder of consultancy Collaborative Strategies. Collaboration tools have finally matured sufficiently to convince business users to adopt them on a large scale. “A lot of tools that focus on collaboration now offer the ability to get started immediately, with practically no training, almost no set-up costs, and very low ongoing overheads,” he adds.

And there is no shortage of products from which to choose. Coleman’s company tracks more than 1,000 separate collaboration IT tools, ranging from ‘synchronous’ or real-time communication applications, such as Instant Messenger, to ‘asynchronous’ tools, including Wikis, blogs, and document management systems. The former are less prevalent, accounting for around 25-33% of the market, says Coleman, with asynchronous tools – which can claim a longer heritage – taking the lion’s share.

The relentless adoption of IP-based technologies is fuelling the demand for collaboration tools, allowing users to deploy single, integrated platforms capable of dealing with voice, images, video, data and text.

But it is not only the tools that have grown increasingly sophisticated. The users too, have been evolving, with a generation of IT-savvy graduates – all of whom have whiled away their university years in ‘chat rooms’ and on social networking sites – now entering the workforce. “This generation has different values from baby-boomers,” says Coleman, tending to be “more transparent, willing to share information, used to getting things more immediately, and wanting to interact quickly.”

Increasingly, employers have had to become receptive to the expectations of what Forrester Research has dubbed the ‘Millennials’ – those born between 1980 and 2000 – making collaboration a key recruitment issue, says Tif’s Ross. “For many of these people, going into a company which says, ‘No, we do it this way’, is going to seem really antiquated,” she explains. “So Tif’s members are now thinking about the kinds of people they are going to be employing, and the tools those people will be accustomed to using.”

Added to this generational shift, however, is the “increasingly global nature of the economy”, says Stephen Kersch, head of project information management at Mustang Engineering, a firm that supplies engineering services to the major oil conglomerates.

During the 1990s, most of the collaboration tracked by Collaborative Strategies, functioned inside the firewall, but globalisation has served to rupture this wall, forcing corporations to operate over vast stretches of distance and time, with multiple, geographically dispersed partners. On-demand, web-based collaboration tools have become a critical means by which to bridge the many junctures and hand-off points, created by lengthening supply chains. “Change comes at the edge,” says Coleman, “and the edge in this case is outside the firewall.”

Over the edge

But aside from giving younger staff access to familiar IT tools, are there any substantive benefits businesses have gained from deploying collaboration tools? Mustang Engineering’s Kersch believes that productivity is an obvious winner.

His company has deployed a web-based document management system (an “FTP site on steroids”, as he calls it), provided by collaboration software company CTSpace, to allow staff and partners – including suppliers, sub-contractors and clients – to build a directory of specialist documents, including complex engineering designs, which can be accessed from any location and updated within minutes. “We can communicate those amendments electronically around the world, on a 24/7 basis, which has allowed us to service our clients in the best, most efficient and productive way possible,” he comments.

The facility to make amendments and deletions to the very latest versions of plans in real time has dramatically improved Mustang Engineering’s delivery capability and time to project completion.

Collaboration tools have also helped cut project time for the capital investment programme at Anglian Water, where ongoing, iterative advances can be made instead of having to wait for the next meeting to move projects forward. “Now we’ve got teams that are genuinely integrated, meaning we don’t have suppliers delivering to us, each with their own supply chain: the whole project is performed as one, integrated team,” says Dale Evans, alliance operations director at Anglian Water.

Integration of this kind was “a big statement to make”, says Evans, whose decision to move to a collaborative working structure meant allowing Anglian Water’s various suppliers to access all of its multi-billion dollar project plans. But the pay off has far outstripped any risks, not only in terms of faster delivery cycles, but also in terms of morale. The transparency of “just knowing we are all accessing the same information” has had an intangible, yet positive, impact on the team in general, he adds.

Such cultural benefits are often hard to prove, but some studies suggest a link between the use of collaboration tools and lowering staff turnover. “We see online tools such as blogs and wikis as optimising and improving what is an already very democratic structure,” says Paul Squires, new media manager at utility company E.ON UK. Such tools are also helping to improve ‘work-life balance’ by allowing staff to work on projects from home.

Of greater importance for E.ON, however, is carbon. “As an energy company we see a reduction in our employees’ carbon footprint as a very positive thing, and an important part of the work ethic,” says Squires. Using Live Meeting, a feature of the Microsoft Office Communicator suite, E.ON has been able to reduce not only the time but the resources expended on travelling between UK cities, which was once normal practice.

A further, but less obvious, advantage to British Energy’s collaborative business strategy, has been the ability to produce a fully traceable audit trail on projects, says Ian Campbell, the company’s CIO. Working in a heavily regulated industry, it has also been extremely helpful in lowering the intensity of internal audits for compliance, “because the regulators do not just see the end output of a project, they are involved in our ideas and in shaping it.” More broadly, asynchronous systems such as Microsoft’s Sharepoint used by Campbell and his team, allow managers to trace the source of project delays, or why, and at what point, the project ran over budget.

New relationships

Collaboration efforts are now beginning to spill beyond the closed, trusted network of staff and suppliers, extending to the unrestrained mass of consumers (see box ‘In practice: Customer feedback’).

Shyam Balasubramanian, a global manager at fuel giant BP, has studied the changes in businesses interactions with customers and notes a growing body of customers are demanding some form of interaction with the business.

Collaboration tools are helping companies gain a deep insight into customer expectations; others simply provide a corporate ear into which clients and customers can pour their discontent if they so desire. Either way, customers will be involved, and that will raise expectations. “Once you have committed to engaging with consumers, either in face-to-face situations like events, or on the web as with a social networking site, then the expectation is that you will be responsive to their needs,” says Balasubramanian.

The imperative of collaboration reverberates behind company walls too. The flip side of using collaboration to target pools of knowledge and improve operations is that it exposes those unwilling to participate. Failing to contribute to the “joint corporate memory”, for whatever reason, might well prompt a “peer group to wonder whether everybody has the same objective in mind,” says British Energy’s Campbell.

For the IT decision maker, this introduces valid questions about how to deploy collaboration tools that meet users’ preferences. But given the prevalence of the tools that are now available, those users may soon find that collaboration is transformed from being ‘that clever stuff that the kids do’ to an essential component of business life. Business leaders can no longer dismiss the trendy Web 2.0 crowd: participation is becoming mandatory.

In practice: Customer feedback

While the average business has become savvier about the potential benefits that might be gained from moving to collaborative working, it is the software industry that remains the master of this art. For one of the key benefits to be gained from collaboration in the so-called ‘knowledge economy’, is the ability to both capture,and optimise, intellectual assets, something software developers have been practising in both a structured and unstructured fashion for many years.

Recently however, it is the larger and traditionally less transparent software giants, such as SAP and Oracle, that have been making strides in this area, both having established extensive ‘developer networks’ in a move that owes more than a little to the spirit of the open source movement. The SAP Developer Network (SDN) and the Oracle Technology Network (OTN) are collaborative environments par excellence – boasting more than 500,000 and 5.2 million global members respectively – in which subscribers are free to comment on, criticise, and with a bit of luck improve, the respective software giants’ product set.

The plan to open up its processes as a set of open standard web services, or a “dictionary of definitions for people to use”, and expose them to public scrutiny, was a milestone decision for SAP, says Shai Agassi, president of SAP’s product and technology group. “If you use them you are plugged right into our processes; it’s as if you work inside our departments. This was unknown to SAP. People said, ‘You’re gonna let people say whatever they want about our applications?’; I said, ‘If it’s not working they’re going to tell each other anyway, so we might as well listen and fix it’,” he explains.

According to Agassi, a mere 20% of postings on the network are contributed by SAP’s own developers, with the major chunk coming straight from customers that are deploying SAP’s applications. The forum serves as a resource, says Zia Yusuf, executive vice president at SAP, for customers to share knowledge on how to improve deployments and optimise application performance – assuming of course, they have the time to read its several million comments.

In time, says Yusuf, the knowledge captured on SAP’s SDN will be harnessed by the company’s own developers, and help shape future developments. “You get all the information, good, bad and ugly about the product in SDN”, he claims, “and that’s very, very powerful.”