NUS ACC1006 Accounting Information Systems Individual Assignment

NUS ACC1006 Accounting Information Systems Individual Assignment
Academic Year 2009/2010 Semester 1

A review of Web 2.0 from a business perspective

How companies are benefiting from Web 2.0

In this article, the Mckinsey Quarterly (2009) conducted a survey in 2009 to find out if implementation of Web 2.0 has benefited companies. 69 percent of the participating companies who have already implemented Web 2.0 responded that their businesses have gained benefits. The most common benefits the companies have stated in the research include an increase in the speed of access to knowledge, reduction in communication costs, an increase in effectiveness of marketing and a decrease in travel costs.

I have already noticed large companies using a more blog like approach to their websites, with comment boxes at the bottom where users of the website can make comments or rate the page (Dell Inc., 2009). Also I have heard of companies having their own internal user editable information websites or Wikis to harness employee created content and knowledge. However, what is new to me is the realization that these tools can have real business benefits and implications. What started out as perhaps an interesting new way of communicating has now become a real business advantage that companies can make use of.

Also of interest is the finding that technological companies, telecommunications companies, and legal services companies report a higher gain in benefit than manufacturing or financial companies. Perhaps further research should be done in this area to investigate the differences in these different industries to identify specific reasons why there is such a disparity in benefits gained.

Possible results could be that the nature of technological and telecommunications companies are more conducive for the implementation of Web 2.0 tools. These companies usually require more interaction both externally with customers and internally with their own employees so Web 2.0 is well suited to improve this communication.

Although this research has shown that many companies that have implemented Web 2.0 tools report gains and benefits, there is a lack in comments about the companies that have reported no gains and perhaps even suffered losses. The downfalls of having Web 2.0 tools should thus be investigated and the following study discusses one of the weaknesses of this technology which is the concern of information risk.

89 percent of UK businesses lack dedicated Web 2.0 policy

This article is a release of the results of a study done by research company Vanson Bourne for Recommind (2009), an information management company. The research investigates the extent of information risk policy implementation in UK businesses. The study found that an alarming 89 percent of UK companies did not have dedicated guidelines for the usage of Web 2.0 tools to control the flow of information. Also, only 51 percent of the businesses surveyed are aware of data leakage risks.

Given the open nature of these tools, it should not be a surprise that control measures could be hard to devise and implement. However, it is worrying that such a large number of companies are even not aware of the dangers and are not making effort to implement any kind of remedy. Not only will this put the company’s sensitive information in danger, it might even lead to more cases of customer information being leaked as seen in the rising number of credit card frauds (Sullivan, 2004) and identity thefts in the news today.

The study also observed that 70 percent of the firms surveyed believe that responsibility for implementing and enforcing Web 2.0 policies lies solely with the IT department and 17 percent feel that the responsibility should lie with the legal department. Recommind recommends that a more collaborative approach be used instead because each department is not independent in the company and would need support to implement policies effectively.

This is in line with what is recommended in the textbooks (Romney & Steinbart, 2009). However I feel that a crucial part of the company has been left out which are the employees. Ideally, the employees who are the end users of the tools and also the ones the policies will be implemented on should also have a say in the design and implementation of the policies. This will allow their needs and concerns to be addressed and will thus ease the implementation process.

Conclusion

In conclusion, we can clearly see the Web 2.0 has made a lot of progress in terms of providing competitive benefits to companies and businesses. However, there still seems to be much room for improvement regarding the awareness of the risks and downfalls of such tools. Thus, more effort from the company as a whole is needed to adequately address these concerns.

References

Dell Inc. (2009, November 13). Blogs. Retrieved November 16, 2009, from Dell Community: http://en.community.dell.com/blogs/

McKinsey Quarterly. (2009, September). How companies are benefiting from Web 2.0. Retrieved November 16, 2009, from McKinsey Quarterly: http://www.mckinseyquarterly.com/Business_Technology/BT_Strategy/How_companies_are_benefiting_from_Web_20_McKinsey_Global_Survey_Results_2432?gp=1

Recommind Inc. (2009, September 30). 89 Percent Of UK Businesses Lack Dedicated Web 2.0 Policy To Protect Against Information Risk, Recommind Survey Reveals. Retrieved November 16, 2009, from Recommind: http://www.recommind.com/releases/20090930/web_2.0_policy_uk

Romney, M. B., & Steinbart, P. J. (2009). Accounting Information Systems. New Jersey: Pearson Education, Inc.

Sullivan, B. (2004, March 12). Major U.S. retailer suspects credit card leak. Retrieved November 16, 2009, from MSNBC: http://www.msnbc.msn.com/id/4516301/