Digital transformation and technology integration are all the rage. Academics and practitioners alike espouse the inherent need to tackle these challenges sooner in order to assure there is a later. One thing that is missing from the cacophony of voices thrusting digital transformation upon the business public: What is the point? What is the ultimate goal of digital transformation? Is it a more efficient organization? Is it doing more with less? Not exactly. These are admirable ideas but they were the object of the first business technology revolution. Our Kaizen (continuous improvement) mindset should always keep us looking for opportunities to be more efficient.  However, the ultimate goal of digital transformation, the El Dorado for which we all constantly strive, is a Frictionless Enterprise.

Efficiency and resource utilization have been, and continue to be business objectives. These goals were the desired outcome of the technological revolution that resulted in Enterprise 1.0.  An Enterprise 1.0 company is a technology-enabled organization that maintains many of the silos, outdated procedures, and inflexibility that have been prevalent in business since the early 1900s. In Enterprise 1.0 companies, technology is IT driven, generally as siloed as the rest of the organization, and built to supplement existing policies and procedures that were first defined at a time before digitization significantly lowered the transaction cost of doing business. While this technology did help to create some efficiencies and increase utilization rates, it is often cumbersome, not easy to use, and fails to adapt to changes in business realities.

Enter Enterprise 2.0.

Enterprise 2.0 is by no means a new idea. A result of the Web 2.0 concept (which was coined in 1999), Enterprise 2.0 stresses collaboration, flexibility, and user-driven technology integration. The ultimate goal of this being the absence of friction within the organization. Users have become accustomed to the seamless integration of technology in their personal lives and now want their work to reflect what they know is possible. They want to be able to collaborate effortlessly, find information immediately, and have their tools designed intuitively.  While hierarchy, bureaucracy, and compartmentalized information sharing were implemented to make organizations more efficient, the opposite is true. These outmoded concepts create friction on the path to achieving our strategic business objectives. The startups which have eschewed these previously sacrosanct principles have begun to dominate every field in which they endeavor to compete.

Enterprise 2.0 and the Frictionless Enterprise are here to stay. They represent a revolutionary way to do business that is already old-hat in our personal lives. As business leaders, we must embrace the new reality that what we “knew” all along may not be true. It is time to let go of the past best practices and embrace the removal of intracompany barriers, an increase in transparency, and dedicate ourselves not to following an MBA playbook but rather focus on how to best deliver value our customers. This is the only way to achieve a truly Frictionless Enterprise.