IT needs to loosen control without losing control, warns Gartner.
Shrinking returns from business automation and the impact of web 2.0 will revolutionise the workplace and change the way we do business forever, experts predict.
Analysts at Gartner's Symposium/ITxpo in Cannes warned that organisations need to respond to these changes urgently.
Companies need to open up to a wider collection of business and social networks, in addition to creating more collaborative workplaces.
"Businesses have long understood the value of growing and supporting the business environment in which they operate," said Nikos Drakos, a research director at Gartner.
"Collaboration can be supported in new ways among customers, partners and teams, and IT has a fundamental role in embedding these practices in the business."
Gartner predicts that six out of 10 new collaboration-related IT projects will seamlessly incorporate supplier, partner and customer personnel by 2009.
This will herald a move away from the traditional closed and inward-looking organisation to a more open, collaborative and innovative environment.
The once-conservative pharmaceutical industry is already embracing this new openness by decentralising decision making, collaborating across the ecosystem and making proprietary information publicly available.
Pfizer recently announced a collaboration project with Sermo, the fast-growing US social networking site for doctors.
Sermo and Pfizer will work together to establish how drug companies can best communicate with physicians online, and provide drug and disease information on-demand.
"Innovation in the future will depend increasingly on extending your business to include a wider community and this will not be without risks," said Drakos.
"An active and managed approach to open innovation will enable organisations to take collaboration to the next level and compete fully on a global level."
Gartner noted that demand for improved information sharing along business functions is already driving solid growth for collaboration technologies. This is reflected in the growth of the enterprise social software market.
The analyst firm estimates that the enterprise social software revenue market will reach $226.9m in 2007 and will increase to more than $707.7m by 2011.
At present, email is the most widely used tool for collaboration but its use is so prolific that, at times, it has the opposite effect as users can not recognise important messages from "noise".
Other social software applications, such as wikis, discussion forums and blogs, have the advantage of providing user-friendly and flexible ways to aggregate, organise, share and amplify the value of personal knowledge and experience.
"Improving intra-organisational and inter-organisational communications with people and groups that may not be able physically to interact is the ultimate goal and organisations need to look at new and innovative ways of making this happen," said Drakos.
He argues that social interaction is the way to deliver most value in the modern work environment, and predicts that the primary role of business networks by 2012 will be to support social interactions, not routine business transactions.
"Many IT leaders fear the consequences of opening up their organisations and the use of social networking as a business practice," said Jeff Mann, a research vice president at Gartner.
"One of the advantages of social software is balancing the need for control with the need for flexibility with its inherent potential for chaos.
"We believe that, between traditional and rigid closed ways of interacting and direct peer-to-peer interactions, there is a role for an open and adaptive structure.
"In order to innovate, businesses cannot concentrate solely on controlling what the users do and remain a 'closed shop'. IT needs to loosen control without losing control to allow good things to happen.
"IT must accommodate users' needs for flexibility and openness while protecting the organisation from excessive risks. Businesses must accept that they will experience some inevitable failures to enable innovative projects to flourish."
Organisations that fail to embrace social software in their business may well face staff discontent and impassiveness, and expensive security and compliance problems.
Gartner predicts that by 2009 at least 70 per cent of organisations without an IT-supported deployment of blogs and wikis will have multiple unofficial deployments among their users.
"Ultimately, the success of social software within your business will be limited not by the opportunity, but your willingness to accept change," concluded Mann.