"In philosophy, ontology is the study of the nature of reality. In information technology it refers to a formal representation of a set of concepts and the relationships between them. The ontology we refer to here is of the informational kind, but is also much closer to the philosophical kind than usual because it concerns reality. This is because it contains information not only defining the organisational system, but also its history, plans and current state. i.e. it is a description of our entire organisation and its information in a universally usable format.
There is a continuous feedback loop between this ontology and reality. As the stakeholders carry on their operations in compliance with the agreed-upon structure, they see where it is functional and where it needs to be improved.
Such feedback implies that the stakeholders have a way of collaborating on the ontology. It needs to be contained within a so called "web 2.0" (web-based collaborative) software system. This doesn't necessarily imply that it can be publicly viewed and manipulated, as access can easily be restricted to the stakeholders. Here the stakeholders can access and modify the information they need for the day-to-day running of the organisation, such as suppliers, clients, departments, products and services, and it also contains the documentation and procedures that the organisation uses. For more details on this, see the Wiki Organisation article.
The use of ontologies is one of the defining aspects of the emerging semantic web or Web3, technology. It's this technology that brings us the universal usability aspect mentioned previously.
As we apply Web3 technology within an organisation, our ontology becomes easily moveable into other software systems, so that it can't be disrupted by technological changes (such as the company that develops our software going under or being bought up) and is easy to give to other people, so that if someone, for instance a client, is interested in using the same system for their own work, they can easily copy the whole structure and use it within their own software system.
With such structured descriptions becoming more common, people will find it easier to share and re-use organisational patterns, giving rise to large collaborative organisations within which the stakeholders can still retain their identity.
Web3 can seem like an intimidating jump, but the most important step is thinking in systems terms and developing an ontology - this can be expressed as simply as a tree of files, or a multilevel bullet list. It doesn't need to be described in an official web3 language right from the beginning. As long as certain criteria are observed, migration of various aspects to different protocols and standards can be done later with little difficulty. These criteria are discussed in more detail below." (http://www.organicdesign.co.nz/Manifesto)