I've used Google docs to help make group papers and assignments work in school. However, the most use I got out of collaborative or shared documents was when I was trying to put together a guest list for my wedding; I was able to share the spreadsheet with names and addresses with various family members and collect all kinds of contact information. It was great.
In honor of that, you can click here to see a really horrid list of music we considered using at our wedding. (What's funny is we ended up playing no music at all at our wedding...but I enjoyed making the list of terrible lovey songs anyway!) Click here for the Google Doc published as a webpage.
Google Docs vs. Zoho - Zoho seems more like Office 2007 with it's tabbed menu setup. It just looks smoother. I know from experience that trying to use Google Docs for the editing and then switching the document to MS Word can be challenging. It appears that Zoho's exporting process is much easier and user friendly. It was pretty intuitive.
I think Google Docs and the like are FANTASTIC for the workplace. I think about the tiresome task of emailing different versions of documents back and forth. It's crazy! I can't think of an application right off the bat that would apply to patrons, but I'm sure there are some. It would be great if you were doing a newsletter or something that community members regularly contributed to. They could log right into a shared document and post up this month's contribution, etc.
I guess the negative side to all of this collaborative-ness is that you could end up working with a sour apple who wreaks havoc on your work (intentionally or otherwise). That would be bad.
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