Not so long ago, "Web 2.0" was the new kid on the consumer technology block, and people were excitedly speculating about its potential in business. Right now, the economic climate makes excited speculation about the potential of anything a pretty rare commodity.

There is an argument, however, that a downturn or recession is precisely the climate in which Web 2.0 tools can prove their worth. The key question to examine is what hidden value they can liberate for organisations during a downturn. We believe that Web 2.0 provides a route to business efficiency.

In contrast to traditional enterprise software, which requires information and communication technology (ICT) infrastructure prior to use, this generation of software tends to encourage use before providing structure. Specific social software tools that have been adapted for enterprise use already include: unstructured search tools, wikis, weblogs for storytelling, social bookmarking for tagging and building organisational folksonomies, RSS for signalling, collaborative planning software for peer-based project planning and management, social networking tools, mashups for visualisation, and even prediction markets for forecasting and identifying risks.

Impact on organisations

The next impact on organisations is likely to be found in the capture and use of the sort of information that Web 2.0 specialises in.

Social networking works because people like to share information. The capabilities of related software to share and foster collaboration can help organisations distil meaningful, re-usable knowledge about customers and products – captured in tools such as blogs, online communities, and wikis. Companies are beginning to introduce online community pages to their products, to enable customers of one service/product to find others with the knowledge they may need. A similar process in the enterprise – workers sharing information about projects across territories or perhaps between organisations – will help drive global collaboration.

Blogs and wikis are, at heart, collaboration tools. They are powerful at sharing unstructured information associated with ad hoc or ongoing projects and processes. The unstructured information provided by social technologies is particularly useful in business processes that are not rigidly pre-defined, but where people work together in an adaptive way to innovate solutions.

Business IT applications will start to mirror the features found in popular consumer social software, such as Facebook and MySpace, as organisations look to improve employee collaboration and harness the community feedback of customers.

Traditional business models have focused on a hierarchical model (which hasn't changed for more than 100 years) where ‘good ideas’ come from the leaders at the top of the organisation. This model does not make the most of the knowledge and experiences of every individual within the organisation.

With the injection of some fundamental Web 2.0 technologies, such as social networks, businesses can finally tap into the knowledge of all their employees, partners, and customers.

The case for Web 2.0

Web 2.0 will help differentiate companies from competitors who continue to rely on advertising and other traditional methods of communicating with their customers. We’re just at the beginning of this as a communications tool. CRM, for example, is essentially about how to treat different customers differently. There’s no more promising a tool to start making those connections more personal and effective – from both a customer service and a cost perspective – than social applications using Web 2.0.

That said, companies should avoid using Web 2.0 simply in an effort to keep up with competitors. It is crucial to have clarity on the purpose of such tools – the value they can provide for both customers and the company – before deploying them.

There is a need for Web 2.0 business tools to work well together in order to make them as effective as the tools we use at home. The obstacle to business adoption is a lack of awareness among the user community about the value of using them in a workplace setting. At BT, we rarely send spreadsheets to each other; instead, we use application-sharing tools. You get version control, speed and simplicity by forcing the community to use just one document.

The efficiency benefit just in this one example is clear, but is there more hidden value to be unlocked? Before using application sharing tools, thoughts or ideas about how to improve a document or presentation or financial model, for example, would be “water cooler conversations” – and consequently be lost. With Web 2.0, those valuable conversations – the collaborative sharing of ideas – can happen in cyberspace, which means you can capture it.

Recessions, historically, have been periods that force companies to think innovatively and creatively about how to stand out. As with customer service, if ideas are to be a differentiator, there is no better set of tools than Web 2.0 to serve businesses right now. Cost-effective to implement, simple to use and conducive to innovation, better customer service and less duplication – sounds like the recession is a golden opportunity for the value of Business Web 2.0 to be unlocked.