Web 2.0: The New Frontier for Employee Responsibility and Innovation

Employees are more tech-savvy than companies may realize — spending much of their personal time interacting with laptops, wireless routers, digital cameras and HD video.

They’d like to have the same technical freedom and power at work, but instead they’re often given the same locked-down equipment mandated by a one-size-fits-all corporate IT policy — regardless of individual requirements or strong preferences. Hampered by a corporate firewall that restricts Internet access and prohibits bandwidth-intensive activities such as streaming audio or video, employees’ collaboration and productivity suffer, leading to increased security breaches and employee turnover, reduced innovation and decreased profits.

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So says Douglas Neal, Research Fellow at CSC’s Leading Edge Forum (LEF) Executive Program, in a new report, Harnessing Web 2.0: Enterprise Strategies for Living on the Web. In it, Neal describes Web 2.0 as “individuals, not just IT departments, combining services — mash-ups — to create new business capabilities.”

Working outside the firewall

“Living on the Web is the future,” says Neal. “And the browser is where it’s happening.” IT departments — no matter how large — cannot possibly compete with the Internet’s public infrastructure, which is capable of supporting hundreds of millions of users. Forcing employees to work behind a corporate firewall, Neal argues, just cuts them off from innovative Web-based technologies that foster the kind of flexibility and collaboration needed to achieve innovation. Simply put, companies can’t make their numbers next year if they just repeat what they did last year.

“Employees will figure out a way to do their jobs," says Neal. "If the IT department doesn’t help them, they will figure out another way." And with the proliferation of Web-based consumer services, like Yahoo Mail, Kodak EasyShare Gallery and Google Maps, smaller companies may soon eliminate their IT departments altogether. Locked down, across-the-board IT policies may have been appropriate and economic in the past, but now they create costs and increase security risks.

Re-examining needs

The trick for large organizations is to figure out how to effectively match new Web capabilities with their corresponding internal needs. IT organizations have to develop a double vision, looking outside to monitor rapidly evolving capabilities, while identifying internal areas that are either under- or overserved. Underserved areas usually make themselves known by complaining. Overserved areas, however, are much more challenging to identify. Yet they probably present the largest opportunity for change.

CSC.com, for example, hosted videos of Team CSC competing in the Tour de France. Previously, a specialized video hosting service was used. Last year, however, csc.com staff looked at the new Amazon S3 storage facility, which lets anyone store anything on Amazon’s servers for 15 cents a gigabyte per month. Realizing that their current specialized hosting service was overserving their needs — that they were paying for a performance level beyond what the site required — they decided to switch to Amazon S3. The result was about 85 percent of the specialized service’s performance, which was still more than enough for their needs, at about five percent of the price.

This ability to be increasingly flexible, paying close attention to both the changing capabilities on the Web and the evolving needs of specific segments of a client’s business, is at the heart of CSC’s Dynamic Sourcing.

According to Harnessing Web 2.0: Enterprise Strategies for Living on the Web, allowing employees to connect directly to the Internet may reduce telecom costs by as much as a factor of 10, while increasing working speed by up to a factor of 100. Using Web browsers as the company’s standard interface liberates employees’ desktops from the need for rigid control — and shows they’re trusted to choose the appropriate programs and technologies to do their jobs most efficiently.

Preventing security breaches

But won’t security suffer? The truth is that most security breaches come from inside the company itself. Frustrated by the parameters of a corporate firewall — forced to live in “the corporate cave,” as Neal describes it — tech-savvy employees will attempt a workaround in order to do their jobs, which may inadvertently open up the network to insidious viruses. If, however, employees are allowed to take advantage of technologies like AJAX — which dramatically improves Web browser performance by refreshing Web page content without having to redraw the whole page — then sensitive data will be stored on secure servers rather than on vulnerable laptops, which can be easily lost or stolen.

BP chose to start living on the Web when they reduced their reliance on the corporate network and allowed more than 18,000 employees to connect directly to the public Internet. Laptops were secured by moving them outside the firewall and enabling auto-patch for security updates. The company also instituted a voluntary Digital Allowance Scheme. Interested employees took a technical competency test; those who passed — and signed an agreement — received $1,000 to create their own custom-made IT work environments. For BP, living on the Web means better security, lower IT costs and increased productivity, with employees performing efficiently regardless of location — whether they’re working at work, at home or at a client site. Similar efforts are now underway at other LEF Executive Program clients, such as Royal Mail Group, KLM and Philips.

Listening to success

Harnessing Web 2.0: Enterprise Strategies for Living on the Web is the result of a joint effort between the LEF Executive Program and its member organizations. To see firsthand how businesses are adapting to the new Web 2.0 culture, the LEF Study Tour spent the latter part of 2006 visiting companies such as Amazon.com, Google, Microsoft and Cisco, as well as up-and-coming firms such as 3Tera, ThinkFree, JackBe, TeamDirection and Nimaya.

The key question for companies that want to retain their staff is, “Why should great people want to work here?” The answer from today’s leading companies: “Hire people you trust and treat them as adults, not children.” Treating them as adults means acknowledging that there are different segments with different capabilities and different needs. One size no longer fits all.

A director-level membership organization, LEF develops the views and experiences of leading CIOs and senior academics to offer insight into how technology will reshape business and influence organizational change.

The full report, Harnessing Web 2.0: Enterprise Strategies for Living on the Web, is available to companies who subscribe to the Leading Edge Forum Executive Program and to CSC employees on the CSC portal.