Category Archives: Macroeconomics 2.0

Mindsets and Innovation into the future

We are watching markets tumble and increasingly it looks like a double dip recession is on the cards. Last time the global economy wobbled, we had come out of a period of growth. We had money to pump into the markets, fat to take out of the system, greed to blame and the wear-with-all to spend our way out. Nowadays it may require a complete rethink to address the economic downswing.

Inherently our thinking has been guided by our experience, but confronted by a new series of variables that we haven’t seen before, we need to address the thought architecture which informs our decision making.

For example, the banking sector is very risk averse and is guided by credit risk, rather than economic growth. This means that credit is effectively granted to those people who don’t need it. This effectively excludes most of our population from the opportunity to become entrepreneurs.

In the recession of 2008, those people who were most at risk, lost their jobs and livelihoods. This time around it is going to be those people who were economically less at risk, who will be left blinking in the train light wondering what happened. People who were secure in their jobs and with sensible saving plans are going to feel the fall out.

Already London is falling victim to the mob violence, perpetrated by marginalised youth who have seen their parents exposed to the austerity measures, losing out on health care, the job market and support. This youth is using social media to propogate their agendas. No-one is condoning the looting and violence and we recognise that this has been taken advantage of by criminal elements, but the underlying truth is that the economy forms the backdrop to some very disturbing events. Social media is not only a weapon for good, but also a weapon for social mayhem. Human behaviour, good and bad is exacerbated.

The only way out of this potential crisis is to change our way of thinking and to reinvent our response to a new economic future, whether we are individuals, businesses or politicians. We need to recognise that more people are disenfranchised and that it is not just bad people who are losing out.

The world has changed; we need to innovate to meet new challenges. Perhaps we need to start looking at the fundamental variables which have changed, like the economy, societal changes, globalisation and social media to adjust our thinking.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges has recognised the changes to the enterprise environment, brought about by enterprise technologies like social media and SharePoint 2010 and is focussed on this. We partner with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

We have also partnered with Innocentrix to bring Spigit Innovation software into this country.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

http://online.wsj.com/article/SB10001424053111903366504576490841235575386.html

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Filed under Business, Enterprise 2.0, Innovation, Internet, Macroeconomics 2.0

Unlocking the Business Value of Microsoft SharePoint 2010′s social computing tools

In 2007, Microsoft bought 5% of Facebook, a very wise move indeed as it has enabled its SharePoint 2010 developers to work closely with the Facebook developers to understand Social networking and to build this knowledge into the SharePoint 2010 release as Social Computing tools.

These intuitive social networking tools create enormous value at an enterprise level within large organisations, however, unless we recognise that SharePoint and Social Computing has the power to change the very way we will be doing business in the future, we will never realise the potential social computing affords us.

Businesses should avail themselves of this opportunity to re-evaluate their strategies and processes to take advantage of the power of this collaboration platform and, in the words of Gary Hamel, innovate themselves into the future.

Competitive advantage does not come from technology, but how we use that technology. After all, the competition can easily acquire SharePoint 2010, but it is the firm which unlocks its business value most effectively which will benefit from the competitive advantage. This means investigating their collaboration requirements, interrogating their innovation processes, developing new Digital Marketing strategies and evaluating their people management across the modern interactive Intranet, and that is just a starting point.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Blogging, Business, Digital Communities, eMarketing, Enterprise 2.0, HR Intranet, Interactive Intranets, Macroeconomics 2.0, Semantics, Web 2.0, Web Marketing

Approaching Enterprise 2.0, beware your mindset

I recently read an interesting article by Donald Sull entitled “Why good companies go bad” – Financial Times (3 October 2005). In it he expands on the concept of “active inertia”, saying that “companies  often respond to even the most disruptive market shifts by accelerating activities that succeeded in the past. When the world changes, organizations trapped in active inertia do more of the same. A little faster perhaps or tweaked at the margin, but basically the same old same old.”

Sull uses the example of organisations trapped in active inertia as resembling a car with its back wheels stuck in a rut. Managers step on the petrol and rather than escaping the rut, they only dig themselves in deeper.

He talks about clear commitments being required for company’ initial successes, but he says that these commitments harden with time and ultimately constrain a firm’s ability to adapt when its competitive environment shifts. He discusses distinctive success formulas which focus on employees, confer efficiency, attract resources and differentiate the company from rivals.

Five categories of commitments comprise the success formula for organisations:

  • Strategic frames – What we see when we look at the world, including definition of industry, relevant competitors and how to create value;
  • Processes – How we do things – entailing both informal and formal routines;
  • Resources – Tangible and intangible assets that we control which help us compete, such as brand, skills, technology, real estate, expertise, etc.;
  • Relationships – Established links with external stakeholders including investors, technology partners or distributors; and
  • Values – Beliefs that inspire, unify and identify us.

Initial success reinforces management’s belief that they should fortify their success formula. With time and repetition, people stop considering alternatives to their commitments and take them for granted. The individual components of the success formula grow less flexible – Strategic frames become blinkers, resources harden into millstones hanging around a company’s neck, processes settle into routines, relationships become shackles and values ossify into dogmas.

Ossified success formulas are fine, as long as the context remains stable. However when the environment shifts, a gap can grow between what the market demands and what the firm does. Managers see the gap, often at an early stage, and respond aggressively to close it. But their hardened commitments channel their responses into well-worn ruts. The harder they work, the wider the gap becomes. The result is active inertia.

One seismic environmental shift, apart from structural changes in the global economy, is the advent of web 2.0 or the interactive internet. The new Internet has radically changed the rules of the game, customers have more power, companies have the ability to harness the Internet to apply many minds both internally and externally to collaborate and innovate.

Many companies are investigating Enterprise 2.0, but they are still filtering their interpretation through their existing success formulas.

In organisations I have worked with, I often see the role out of Enterprise 2.0 technologies from the IT department as though it was any other Enterprise technology like SAP or Oracle. Whilst there is nothing wrong with the technology being owned by the techies, web 2.0 has fundamentally changed the way that businesses will do business in the future and should be owned by the business. Often web 2.0 seems to be interpreted as the technical ability to blog, or a wiki, bolted onto a content management system for a website, or the document management system within an organisation.

In reality Enterprise 2.0 should be accompanied by a strategic review of how a company is doing business, its environment and its new, empowered customers and expanding markets. Processes need to be reviewed and designed from the user backwards, the way we handle orders and complaints needs to be streamlined, or the world will know all about a company’s unwillingness or inability to address issues. People’s skills need to be analysed, have they got what it takes to be able to communicate across porous company boundaries, do they know how to maintain their personal and company brands in an increasingly transparent business environment, has the organisation got enough dedicated resources to engage with powerful consumers and other stakeholders? What relationships are going to be key to the future of doing business and are the entrenched value systems compatible with a new business environment?

Many companies are looking to their suppliers for advice on how to roll out Enterprise 2.0, if the suppliers are technology companies or PR companies, firms need to realise that they will approach web 2.0 from their own mindset. PR companies see web 2.0 as an extension of the companies’ communication. Technology companies see it as an addition to the application architecture.

Microsoft has just released their magnificent SharePoint 2010, but it is important to realise that this is still just a software application. Granted its potential is fabulous, but until organisations review their strategies, processes and competencies, they are not going to realise the full power of the web. If they don’t think through their success formulas, the application will be implemented in such a way as to reinforce or aggravate the “active inertia”, enabling people to do more of the same more quickly. Generally the skills in technology suppliers are geared towards rolling out seats and adhering to good project management principles. They are not strategic business thinkers and need to partner with people who are focused on how companies create competitive advantage and function in the business environment.

Applications do not conduct business, people do. If employees in the organisation are required to collaborate for the organisation to become more successful, then the fact that they now have the tools to do so is not necessarily going to improve collaboration, they may need to be taught to collaborate – when, why, how? If people are required to engage with customers to shorten sales cycles, but the value system within the organisation is all about risk mitigation and proprietary methodologies, then the value system may need to be adapted to fit the modern business environment. If processes are designed from a point of view which suits the organisation and call centres have been deployed to cut costs, then no amount of wiki’s and blogs or the ability to “share” on Facebook is going to appease outraged customers who will take their gripes public.

Enterprise 2.0 requires greater levels of maturity within organisations and sophistication in how they function successfully in an ever changing environment. By reviewing their success formulas companies can use the web to compete in an extraordinary way and conduct business in a structurally changed business environment.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, eMarketing, Enterprise 2.0, Macroeconomics 2.0

Blue Ocean 2.0

Blue Ocean Strategy is a business concept developed by W. Chan Kim and Renée Mauborgne of INSEAD that promotes the creation of new market spaces or “Blue Oceans” rather than competing in existing industries which they term “Red Oceans”.

Red Oceans are industries in existence today—the known market space. In the red oceans, industry boundaries are defined and accepted and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the available demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commoditised and cut-throat competition turns the ocean bloody, hence, the term red ocean. The competition is this on the supply side of the micro economy.

“Blue Ocean Strategy” aligns innovation with utility, price and cost positions to create competitive advantage by influencing or creating demand. Value Innovation is the simultaneous pursuit of differentiation and low cost, and focusing on the buyer to drive demand. It is the creation of an uncontested market space and makes competition irrelevant.

The powerful new web 2.0 is creating the opportunities for forward thinking organisations to change their competitive landscape forever. No longer are industry boundaries fixed, but with a little imagination they are nonexistent.

The four principles of blue ocean strategy formulation include how to create uncontested market space by

  • Reconstructing market boundaries,
  • Focusing on the big picture,
  • Reaching beyond existing demand; and
  • Getting the strategic sequence right.

These formulation principles address how an organisation can create blue oceans by looking across the conventional boundaries of competition, reduce their planning risk by visualising strategy, creating new demand by unlocking the non-customers and launching a commercially-viable blue ocean idea by aligning unprecedented utility of an offering with strategic pricing and target costing and by overcoming adoption hurdles.

The new economic principals of the web include

  • The law of abundance whereby things can be created once and sold many times
  • The networked economy whereby the value of a (social) network is increased with every additional member; and
  • Unfettered geographical constraints where we have access to audiences outside of our immediate environment.

Using these new economic rules we can break out of the traditional competitive (structuralist) strategic thinking and grow demand and profits for our businesses and the industry using blue ocean (reconstructionist) strategic thinking to redefine the business rules.

The winning organisations will be those whose leaders can overcome the key organisational hurdles that prevent even the best strategies from being executed – the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution from understanding the need to break from status quo, explore the opportunities provided by the modern internet, commit the resources to implement the new strategic shift, keep people focused on implementing the new strategy and from overcoming powerful vested interests that may block the change.

Extra demand is out there, largely untapped, the problem is how to create it. By exploring the value of web 2.0 and questioning our traditional thinking around business models and what is and isn’t possible we can shift of attention from supply to creating new demand, from a focus on competing to a focus on value innovation. The simultaneous pursuit of differentiation and low-cost a model is ideal on the internet. Competition is rendered irrelevant. By expanding the demand side of the economy using the modern web, new wealth will be created.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, eMarketing, Enterprise 2.0, Macroeconomics 2.0

Approaching Social Networking from a Social Sciences Perspective

Social Media is restructuring society, marketers need to adapt if they are going to participate in the opportunities this offers us.

Throughout time, communication systems have formed the foundations of society and have determined the development of civilisations. The parameters of communication have always been time and geography. Some communication occurs over time when the transmitting party and the receiving party are not in the same time dimension, for example reading books. Other communication requires the parties to be in the same geography and time, for example face to face. There are many permutations in between.

Witness when people wandered the earth in tribes, much of their communication and therefore cultural development was related to the welfare of the tribe and restricted to their direct contact with one another. The communication was primarily face to face in an instant of time and very little evidence of what was said remained except in the individual memories. Then mankind developed iconography to communicate over time and distance by leaving messages for each other that could be interpreted despite the intervals of time.

The printing press extended peoples’ ability to share ideas and enabled anyone who could read to participate in society’s dialogue. This was an early form of mass, one directional communication over both geography and time.

Imagine how big the world became with the advent of network technologies like telephones, where numbers of participants and geographies were no longer the constraining parameters of civilisation. As a communication tool however, telephones are primarily immediate. People speak directly to each other and the telephone does not automatically capture the conversation in a format that can be analysed over time.

When a society shifts from one communication model to another, all institutions in society get reinvented according to the new logic of the medium. The advent of web 2.0 means that mass communication is no longer a broadcast communication, instead we have multiple people participating in network communication, unfettered by time or geography, on a scale we have never seen before.

Markets are systems where people and businesses are connected and influence each other. As businesses, we will benefit from approaching social networking from a social sciences perspective, and using metrics and visualisations of the dynamics of the system, which can be translated into action plans for communication.

For the first time we can capture and analyse data about network communication, because we are freed from the constraints of time and geography. We can use visualisation to understand the structure of networks in the market, how individuals are connected within their communities and how communities are connected. By understanding these structures, we can design strategies to move messages, products or ideas backwards and forwards through the network efficiently. Instead of using pure segmentation based on the psychographics and demographics of our audience, we can now enhance our marketing with the behavioural analysis of networks and patterns of communication.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, Macroeconomics 2.0, Semantics, Web 2.0

10 Considerations for starting a web-based business in South Africa

I am often approached by people with fabulous ideas for on-line businesses in South Africa. Many of the ideas are great and the demand should be phenomenal because they solve the structural problems in both our Macro and Micro economy, but South Africa is a capricious mistress when creating successful online businesses.

As with off-line businesses, perhaps more so, you need to develop a strategy for the business. Setting up an on-line business goes beyond the idea and the development of an on-line application. You need to do some research; understand the technology opportunities, realise the investment implications, consider your revenue models, target markets, marketing, sales channels, creating competitive advantage, operations, scoping and application development etc.

Here is a check list for Innovators and Entrepreneurs when thinking about starting an on-line business in South Africa.

1. Understand the technology opportunities

Technologies are emerging every day, social media opportunities abound, mobile apps are prolific and any of these could contribute to the success or otherwise of your business. The use of technology may be determined by age, wealth levels, education or even the life-stage of your audience.

2. Investment

The cost of setting up an on-line business are minimal, for several thousand Rand a web developer can build you a website, a payment gateway will cost you some more, but the biggest cost in on-line businesses in South Africa is the cost of customer acquisition and service.

It’s easy in the US when you have ninety million Internet users to attain critical mass, why you could sell gold fish furniture on line and make a fortune.

3. Revenue Models

There are countless revenue models to choose from in South Africa, including the subscription model (which rarely works in SA), eCommerce, Advertising, Application Reseller, Data Aggregation and many more.

The revenue model depends on a variety of factors from your audience, your network, your product, geography etc.

It is also important to understand that while there have been some notable exceptions, most online businesses experience a very slow flat start, picking up incrementally until they reach a tipping point at which stage growth becomes exponential. This may take a number of years. Until you reach this growth phase, your investment will be bigger than your revenue, and so you had better be sure that you have alternative personal revenue streams

4. Target Markets

This includes market research into the current Internet psychographics and demographics in South Africa which are incredibly dynamic. Three years ago I started an on-line business for the township market. I threw everything at it and … nothing. All of a sudden, this year, after it is was all but forgotten, my market is sophisticated enough and has sufficient access to the web to start using it.

Business to Business markets react differently to Business to Consumer markets, niche audiences react differently to large generic audiences. How big are your target markets, where will you reach them, how networked are they, what does their risk profile look like?

5. Marketing

Your biggest investment in an on-line business is marketing. The investment may take the form of money, resources, people or time. You need to decide how you are going to create awareness, educate audiences, drive them to your site, persuade them to buy etc.

In the past we used to say that “Content is King”, today we believe that “Search is King”. Unless your audience can find you on-line you are dead in the water. You need to ensure that customers reach your application when they are looking for what you have to offer.

In order to keep people coming back to your on-line business, it is often a good idea to provide them with value beyond their expectations. One way to do this is to create “communities of common interest” where you let users network with each other around subjects that are relevant to your industry. If you sell travel on-line, let them talk to each other about destinations they have visited.

Once again in South Africa, you are unlikely to get audience of a sufficient size to make these communities of interest self sustainable and dynamic enough to maintain your customers’ attention. You will need to manually manage these communities in order to ensure that there are sufficient members and that there is enough activity to keep it interesting. We often recommend the use of an Avatar whose job is to act as a “digital host” to your customers, creating blogs, starting discussion forums, and posting interesting articles etc.

6. Sales Channels

Sometimes, if you are lucky, the web is your only sales channel, but usually, when creating robust on-line businesses, you have to cross over into the real world. Sales channels can include online, high end strategic business development, direct face to face sales, partnership with complimentary services, channelling through organisational Intranets or sales through industry bodies, to name a few.

7. Creating Competitive Advantage

Strong branding is the key to online business success. Audiences must understand and relate to your value proposition. They must be willing and able to endorse you through their own (social or business) networks. They may need to interact directly with personality which is the brand through commenting, sharing, blogging etc.

8. Operations

Operational management goes beyond ensuring that the site is up and running, but could include product creation, storage and distribution networks or contract management etc. If your fulfilment doesn’t work in the real world, your on-line business is doomed to failure.

The modern web (web 2.0) requires that sites are dynamic, constantly evolving, changing and improving to meet customer requirements and to feature in the relevant search results. Content management is one of the most important ongoing operational considerations and a key factor in on-line business success.

9. Scoping

People adopt and use technologies if they find them useful, easy to use and they make them look good. Considerable energy must be expended in identifying how and exactly why people are doing business on-line with you. User Requirement Specification and Functional Specifications must be drawn up in order to ensure that you don’t alienate customers as soon as they start interacting with your application.

10. Development

I have deliberately left development to last. Development is like housekeeping, it is a hygiene factor. It will not make your site, but could very easily break your business. Choose your technology and your developer with care. I prefer to use local developers who are within “throttle range” so that I can actively monitor progress. I also like to have them on an SLA and a monthly retainer for the constant and inevitable improvements.

In conclusion, South Africa is ripe for Digital Entrepreneurs, we desperately need access to products and services which enable us to overcome infrastructure problems and to take advantage of the opportunities that the geographically and (almost) sociographically unfettered modern Internet provides.

It is not difficult to start a successful on-line business in South Africa, it is hard work which requires a lot of strategic thinking and investment, but it is well worth your while.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Digital Communities, eMarketing, Enterprise 2.0, Macroeconomics 2.0, Web 2.0, Web Marketing

Mitigating the economic downturn by unlocking the power of the web

Web 2.0 offers an unparalleled opportunity for businesses to compete and thrive in a time of mounting economic difficulty – yet incredibly many have little idea of what 2.0 means. Far too often, it is dismissed as a buzzword – but it could hold the key to the survival of many businesses as the slowdown kicks in.

Today businesses are challenged by a global slowdown in the economy, rising inflation, severe talent shortages, cheap imports from the East, the rise of the knowledge worker and a new tech savvy generation Y entering the economic landscape. Also, for the first time, user driven web 2.0 technologies are changing the balance of power between the corporate and its stakeholders, be they consumers, employees or the public.

The last few years have seen the launch and successful rise of creative online businesses offering clients faster and cheaper solutions that they would have previously looked to traditional outlets for. Sector after sector is benefiting from the speed, efficiency and cost-effectiveness of online services, and increasingly, crowd-sourcing and collaboration enabling innovation in new categories and market sectors.

The initial reaction of many big businesses was to batten down the hatches and prepare themselves to ride out this “Facebook craze” which was wasting employees’ time.  Now, the recession looms large in the minds of marketers, the industry is experiencing a noticeable shift in attitudes towards web 2.0 and the new business models it enables.

The “network effect” is becoming ever more important in that for every additional member of a community; the greater the value to each of the community members, and this is fundamentally changing the business models. No longer are communities just “eyeballs” to be advertised to they are now dynamic and demanding sources of revenue.

Businesses are reaching out to online communities to deliver efficient, effective and economical solutions. Perhaps most notable is the range of industries that are embracing such alternatives. All evidence is pointing to web 2.0 being an even more remarkable opportunity than even the most fervent of supporters may have thought.

This is a fascinating time to be in marketing. As we grapple to find ways to do more with less, the smart decision makers are expanding their horizons to include more creative and resourceful solutions to their business challenges. In a broad sense, this means that digital and PR solutions are being implemented to a greater degree than ever before, even replacing some pricey traditional executions. From a sourcing standpoint, marketers are engaging with open-source models, where they’re finding increased return on their investment, as well as global input on their brand.

It will be interesting to see what kinds of businesses are born out of this increased willingness to explore non-traditional models. What other industries will change because necessity, does, in fact, breed creativity?

As businesses continue to adopt these tools, decision-makers looking to leapfrog the competition need to move fast. Web 2.0 tools are being adopted in companies across all industries, and any business which fails to recognise that runs the risk of being left behind.

Consumer Web 2.0 technology is a real force that is changing how business is getting done, and any company looking to improve performance should be taking a closer look at how it can benefit from driving business the Web 2.0 way.

Social media and networking sites provide the platform for companies to collaborate, share information and expertise and market their goods. In fact, all over the web, communities of like-minded firms are supporting each other with advice, swapping internet links and trading together.

The interactivity of Web 2.0 also allows an authentic and direct line of communication between a company and its customers – invaluable any time, but essential in the light of the challenging business environment.

The tools of Web 2.0 – blogging, podcasting, photo and video sharing – have been adopted by millions of consumers because they are simple and powerful communication methods. For that reason, they are ideal for businesses to use in their marketing strategies.

A company that is prepared to engage in an open, honest dialogue, whether it be through a blog or video, with its customers, is being sensible and shrewd. These days very few consumers are prepared to just listen to announcements and one-way broadcasts without being able to give their feedback.

However, there are still far too many companies which have not tapped into the rich potential arising from web 2.0 because they either are not aware of it or feel it is irrelevant or too complicated or they underestimate its power.

This reticence may be in part explained by existing attitudes to the internet generally. Many businesses are not seeing a measurable return from their websites or online marketing and sales.

There are good reasons for this. Running a website can be a costly, complex business that often requires the support of third parties to build, maintain and market. Many organisations regard their website as a brochure for the organisation and have not contextualised in the business strategy as a whole. Larger businesses to use paid search and display ads supported by a comprehensive Search Engine Optimisation strategy to ensure a good Google rating.

If we put the problems of traditional online marketing alongside the growing importance of the internet as a research and purchasing medium for consumers, it becomes apparent that we desperately need to find a better way to promote ourselves online. This is where Web 2.0 is vital.

To attract customers, it is necessary to participate in online “communities” relevant to your business. That also means engaging in an ongoing, meaningful dialogue with customers on interactive networking sites about products, prices and service.

The social web has changed the landscape of e-commerce forever. Audiences are fragmented and this means customers are harder to reach but they are surfing the web for information about goods in ever-growing numbers before buying. If these trends continue, then any company wishing to succeed has to embrace the interaction encapsulated by Web 2.0 to build strong, trusting relationships with its customers.

Businesses can benefit from the power of social networking precisely because the tools of Web 2.0 are well suited to the personal and conversational marketing style that already works to their benefit offline.

Firms large and small have started to take part in social networks and internet communities but the results are mixed. Some are successfully attracting customers and boosting the bottom line, others are not. Of greater concern is that most have not taken the plunge at all with many approaching the internet in general with apprehension.

These businesses should realise that Web 2.0 offers relevant and powerful tools for them to promote themselves and build an oniline brand. They should stop hiding – and start using it to their advantage.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Enterprise 2.0, Macroeconomics 2.0