CEBIT: Web 2.0 will have ‘big impact’ on business

Company leaders should embrace blogs and other Web 2.0 technologies to improve their businesses, analysts have urged.

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Company leaders should embrace blogs and other Web 2.0 technologies to improve their businesses, analysts have urged.

Gartner global head of research Peter Sondergaard told chief executives at the Cebit IT trade show that blogs and online communities such as MySpace might have started in the consumer realm but would have a big impact on businesses in the next few years.

Many executives already use blogs to talk with customers, while vendors including Microsoft and IBM are offering tools to help employees work on projects using blogs and wikis. In the virtual world, BMW and Adidas are among the companies marketing themselves in the online community Second Life.

This was part of a shift in which products and services for consumers were creeping increasingly into the world of business, Sondergaard told the CEO Vision Forum, a fringe event at Cebit.

"This is the next major shift in technology. It will last 15 years -- but it's the next five years that will decide which enterprises will thrive and take advantage of the new tools," he said.

Some executives at the forum agreed that the technologies were important, but saw challenges in putting them into action.

"He's a consultant and I'm a CEO. He doesn't have to worry that if you have a community network in your organisation and you disclose financial information, you go to jail," said Ben Verwaayen, chief executive of BT Group.

Sondergaard was right in principle, Verwaayen said, and executives must be open to new things, but a leader's job was to decide when the time is right, and to have "the ability to resist what is fashionable".

Manfred Reif, a managing director at HSH Nordbank, a credit investment bank in Luxembourg, asked his IT department a few months ago to create a blog where the company's 130 employees could discuss how the bank is run.

Submissions to the blog would be anonymous, he said, because it was important to get honest feedback. Employment laws in Luxembourg required him to seek approval from the employees' union before blogging could begin, he said.

Financial services companies faced additional barriers to Web 2.0, because of strict compliance regulations and the need for tight security. But Reif said he must think about ways to innovate first and consider the compliance implications afterwards. "If you think first about regulations, you'll never do anything," he said.

A top executive with a management consulting company in Germany said his clients, which included traditional manufacturing companies, were not using Web 2.0 technologies. Manufacturers did not have the right mindset, because they were too focused on products, rather than services, he said. "It will be at least 10 years before they are ready," he added.

Sondergaard said most chief executives were "digital immigrants", struggling to understand consumer technologies that were being popularised by young people and creeping into business. "The digital natives are the 16 year olds, your sons and daughters," he said.

Companies should experiment with Web 2.0 internally now, because in a few years, use of these technologies would determine which companies the “digital natives” wanted to work for and do business with.

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