Rising Business Complexity Underscores the Need for the Connected Enterprise

Last week I wrote about the potential positive benefits of the connected Enterprise and social business. McKinsey found quantified benefits from the connected enterprise in both 2010 and 2011. Now they have doubled down on their forecasts for the business value of connectivity. See my post, McKinsey Projects Business Value of Social Business at a Trillion Annually, for a look at the bright side potential of the connected enterprise.

There is also a dark side potential for the disconnected enterprise. Forbes provides a number of recent examples in its article by Ron Ashkenas on, Wanted: Chief Complexity Reduction Officer. It notes how there is increasing complexity in the business world and documents how a number of formerly “best in class” companies such as Toyota, BP, and Johnson & Johnson took “huge hits to their reputations (and balance sheets) in ways that no one could have predicted.” This was largely because their dysfunctional internal communication failed to warn of early danger signs and ailed to provide an adequate way to respond to these crises.

For example, “Toyota found that its highly centralized, engineering-centric communication structure slowed down its ability to understand early warning signals about quality.” They added that, “Similarly, BP‘s response to the massive Gulf oil spill was clearly slowed down by its inability to easily coordinate the different businesses and functions involved in the crisis. You could also argue that J&J’s manufacturing problems can be traced partially to a fragmented organizational structure with diffuse accountability for quality and customer communication.” I also know that BP was one of the pioneers in knowledge management in the 90s, achieving significant success through shared learning. I stopped hearing about these efforts in the 2000s as management apparently went a different direction.

The Forbes article notes that a recent IBM study found that: “standout” companies (those who consistently improve operating margins) seem to be those that build “operating dexterity” and “reinvent customer relationships” without waiting for a crisis.” A cornerstone of this dexterity is the connectivity that McKinsey extols. It allows organizations to first learn about risks before they become disasters and to then provide a more coordinated response to reduce these risks.

Looking closely at the technical infrastructure required to support dexterity, we believe that application integration is one of the cornerstones of the connected enterprise. For example, is your issue tracking tool integrated with your collaboration tools to better monitor, manage, and mitigate potential risks?

This is why Appfusions has created plug-in connectors for Atlassian’s JIRA, the issue tracking tool used by 85% of the Fortune 100, to such collaboration and content management tools as IBM ConnectionsIBM Sametime, JiveBoxAlfresco, and Google Docs. We are continuing to build more plug-in application integrations to support the connected enterprise and help organizations better realize the bright side of social business.

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