This is the second of a six part series I wrote, Robust SharePoint Performance in the Emerging Distributed Enterprise: Turning the Potential for Chaos into the Means for Success, sponsored by Certeon. The remaining parts of my discussion will appear on this blog over the next two weeks.
McKinsey reports that creating a networked enterprise that effectively supports collaboration is both a significant opportunity and a competitive necessity in today’s business world. A myriad of benefits can be found in the connected enterprise that makes use of new tools (such as SharePoint). For example, from the results of a 2010 McKinsey survey, 77% of respondents said these new tools increase the speed of access to knowledge; 60% found reduced communication costs; 44% experienced reduced travel costs, and 40% achieved increased employee satisfaction. Similar findings were noted in McKinsey’s 2011 survey.
In addition, these surveys noted a correlation between higher operating margins and “a willingness to allow the formation of working teams comprising of both in-house employees and individuals outside the organization.” Effective distributed access to content needed for collaboration is key to facilitating this work and realizing the benefits.
These results are consistent with the rising percentage of business value derived from intangible assets, primarily people, as opposed to tangible assets such as equipment, buildings, etc., as reported by Juergen Daum. In 1982, 62% of enterprise value was found in tangible assets and 38% in intangible assets. In 1999, the enterprise value found in tangible assets had decreased to only 16%, with an increase to 84% in intangible assets. The increased value that intangible assets now provide to the enterprise underscores the conviction that productivity is driven by connecting people and information. Freeing employees from restrictive information silos fuels the growth of wealth within organizations.
The shift to today’s more social enterprise requires a balance between control and collaboration. SharePoint is a tool that can meet this requirement. As evidence, the Association for Information and Image Management (AIIM) reports that collaboration is the strongest driver of SharePoint adoption. This finding supports the view that SharePoint is primarily a user-oriented collaboration system with the included secondary value of providing document management. This differs from traditional systems that act as a vault to place files for a variety of compliance and process management use cases.
By supporting the growing need for content sharing and collaboration, the SharePoint platform is quickly becoming the heart of the enterprise. It has emerged as a market leader in the content and collaboration market and is on its way to becoming Microsoft’s first $2 billion business. Several factors drive this advance.
First, SharePoint is included in the Microsoft Office stack, and is available to IT organizations at a lower cost than many traditional content management tools.
Second, business users see incredibly robust capabilities on the Internet at large, and therefore continue to expect more and more from their internal, organizational systems. To succeed in today’s environment, businesses see the need to leverage their data. These businesses must effectively access, share, and centrally manage their data. They must collaborate and provide access to their data from an increased use of rich media. Users expect these baseline capabilities, and SharePoint is increasingly seen as the technology of choice by IT departments.
Third, enterprises are starting to move away from complex, rigid and difficult-to-implement document management systems, towards more flexible, user-controlled systems. SharePoint is a multipurpose platform backed by a common technical infrastructure that addresses this trend. It combines searchable document and file management resources ideal for collaboration and social networking. SharePoint’s functionality and resources also encourage the migration of collaboration away from the inefficient use of email systems overburdened with attachments to a central repository where all validated team members can easily find, view, and update and retrieve the latest version at any time. This gives SharePoint an advantage over traditional IT and compliance-centric document management systems that require more technical development skills and support.
The increasingly distributed nature of today’s business world has created a highly decentralized work environment, with employees moving from large centralized facilities to remote, branch sites or even home offices. This also drives the need for enhanced support for collaboration. Forrester reports that only 45% of the US information workforce works solely from a corporate office, and anticipates that percentage to shrink. In a related study, Forrester also found that 66% of North American and European workers already operate remotely. Moreover, new policies are enabling many employees to work from their homes and accessing necessary applications over the Internet. Reuters reports that one in five workers worldwide telecommutes and this number is increasing. Forrester predicts that in 2016, 63 million US information workers will telecommute at least part-time.
This expansion of distributed work, coupled with increased collaboration requirements, drives the need for tools such as SharePoint, and an increased use of WANs to support them. Network usage, including WAN usage, has moved from a store-and-forward mode (typical of email systems) to real-time 24/7 direct access to content, data and applications.
However, the increased use of WANs raises potential obstacles to SharePoint success. I will cover, the Looming Danger: Failure of WAN SharePoint Deployments, in my next post.