Software spending is up, capital investment is up, but what does Web 2.0 really mean for the enterprise? Vanessa Colella blends optimism with practical suggestions on how software companies can move to the next phase by understanding their niche in the customer's ecosystem. Shifting the focus from the provider to the customer will help companies rise to the new challenges of supporting tacit interactions, those messy decisions-based problems which businesses, and software vendors, must now face.
Colella explores several models for thinking about the ecosystem of software companies and their customers. In the first phases of software, the focus was on predictable, rules-based activities which were well served by traditional software packages. These days, a growing part of the economy is based on tacit interactions, those that require people to apply judgement and expertise. Since these activities don't obey clear cut rules, they are more difficult to automate in software.
These changes in the business landscape call on software designers to look for ways in which their software connects at the edges with the user and with the network. Software can assist in tying diverse pieces together. Colella suggests areas of opportunity such as providing customers with timely, contextually correct information, assisting with decision making, and enhancing communication, conferencing and collaboration. With recent trends lowering the barrier of entry into the enterprise, competition is also up, so anticipating which functions are moving to software-as-a-service will be key for companies making the successful transition to the next phase of software.
Dr. Vanessa Colella is an Associate Principal in McKinsey & Company's Silicon Valley Office, where she works primarily in the areas of strategy development and organizational change for high technology companies. She is the leader of McKinsey's High Tech Organization Initiative, which is dedicated to defining and deploying the best practices of organizational design and effectiveness within the unique and fast-moving environments of our leading high tech clients. Her recent experience includes: Working with a multi-national software company to design and implement several new functions and processes to drive a more customer-focused approach to the market place; Developing a leading perspective on role that software can play in enabling businesses to meet key challenges (e.g., optimizing clinical research and development for pharmaceutical companies; improving front line sales effectiveness for retail banks); Preparing a high tech company for the organizational transformation associated with the divestiture of a business unit comprising half of the company's revenues; Developing a growth strategy for a media and entertainment company facing declining industry growth and instability in the marketplace due to the introduction of disruptive technologies
Prior to joining McKinsey, Dr. Colella taught at the Santa Fe Institute and authored a book on agent-based modeling. She was also a teaching fellow and researcher at the M.I.T. Media Laboratory and at Rockefeller University and spent six years teaching junior high and high school Biology and Chemistry.
Dr. Colella has an S.B. in molecular biology from M.I.T., an M.A. in technology and education from Columbia University, and S.M. and Ph.D. degrees in media arts and sciences from M.I.T.
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