Recent news stories say fewer customers are buying and vendors are less interested in enterprise social software today. Why? Data from the recent report The Digital Workplace in the Connected Organization 2014 tell the story: Early Adopters have bought. They are now focused on learning to work in new ways. The Majority are in “wait and see” mode. A research by Jane McConnell (@netjmc) -http://www.digital-workplace-trends.com/

1. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
Decrease of Interest in Enterprise Social Software Signals a
Shift from Tool to Behavior
Recent news stories say fewer customers are buying and vendors are less
interested in enterprise social software today. Why?
Data from the recent report The Digital Workplace in the Connected Organization 2014
tell the story: Early Adopters have bought. They are now focused on learning to
work in new ways. The Majority are in "wait and see" mode.
The Quick Read: Industry reports say that fewer customers are buying enterprise social software and
that venture capitalists are less interested in ESN startups than in past years. Some people are
surprised; others may conclude it is because social collaboration (or "social business" as some may call
it) is dying.
I disagree with this analysis. Data shows that social collaboration is increasing in organizations,
specifically in Early Adopters who have made their purchases and are now tackling the tough challenge
of how to change the way they work. On the other hand, the Majority of companies are in "wait and see"
mode, some playing with pilots, but most observing what others are doing.
The risk the Majority are taking is that when they decide to move, they will have a lot of catching up to
do. Going collaborative, however you do it, is a long journey and threatens traditional roles and ways of
working in organizations. The business-value tipping point comes when business and business support
functions get involved. And that's exactly what's happening in Early Adopters today.
(Data from 2013 Q3 from 314 organizations worldwide: The Digital Workplace in the Connected
Organization.)
Let's start with two recent news stories....
"Customers aren’t as interested in social software for the enterprise as it seemed
a few years ago."
“The problem appears to be that customers aren’t as interested in social software for the enterprise as it
seemed a few years ago. In 2012, Jive added 133 new customers. In 2013 it added only just a little more
than half that many: 76. Since Jive is a subscription product, the pace of customer additions is a key
indicator of the potential for future revenue and billings.” March 11, 2014. “Collaboration Software Maker
Jive Explores Sale”
"Venture capitalists turn their back on enterprise social software."
“As Jive explores sale, venture capitalists turn their back on enterprise social software. 2013 saw
venture capital deals to enterprise social software companies fall over 70% while deal levels crumbled by
56%.” March 12, 2014 in CB Insights.
And let's see what data from 314 companies around the world shows....
Deployment of enterprise social software has increased yearly since 2009, but
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2. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
slowed down between 2012 and 2013.
(Note: Data is collected in the second part of the year preceding publication of the report. For example,
the 2014 report is based on data from Q3 of 2013.)
[caption id="attachment_2222" align="aligncenter" width="546"]
(% of organizations deploying enterprise social networking software enterprise-wide or in some parts
from 2009 to 2013)[/caption]
The chart above shows the deployment rate of internal enterprise social networks over the past 6 years.
The top bar shows there’s plenty of room for more sales: today fewer than half of organizations have an
internal social network deployed “enterprise-wide” or even just “in some parts”.
Vendors caught in the gap between Early Adopters and the Majority.
Venture capitalists of course want to invest where they will make money. You make money through
sales. And sales are not happening right now according to industry experts. Why not?
The explanation is simple. Early Adopter organizations have made their purchases. Nearly 60 percent
have deployed a social network. The Majority of organizations are still testing the waters.
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3. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
Deployment is just the beginning: changing how people work is the
real challenge.
It’s one thing to deploy social software; it’s a whole different game for an organization and people to
use it in meaningful ways. Although activity is not the best measure for effective use of social software, it
is a starting point for perceiving whether or not people are using it. And the truth is that activity rates are
low, even in Early Adopters.
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4. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
Social is still outside daily work.
Most organizations are at stage three in the process I described last year at the 2013 Enterprise 2.0
Summit in Paris: "Five Reasons Why Social Intranets Have Not Taken Off" (see slides 4 through 9).
Stage three is where social is present in the organization but lives in a corner or in a layer of its own.
Twelve months later, few organizations including Early Adopters, say that social networking plays a role
in people’s daily work habits.
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5. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
However, change is happening and real cases tell the story better than
data.
Three examples from “In Practice” cases in “The Digital Workplace in the Connected Organization” show
how some organizations are using their enterprise social platforms for business needs.
Alcatel-Lucent used their social network to help build their transformation plan.
“Employees need to be able to give their voice and ideas on initiatives launched at different levels in the
company, using simple channels like our internal social network. Recently people throughout the
company participated in the final decision process of our CEO Excellence Award. Another example:
people were invited to send contributions to a company initiative launched just after the arrival of our new
CEO. Many of the ideas submitted were included in our transformation plan.”
Aegon is reinforcing their collective intelligence through enterprise Q&A.
"A common occurrence that triggers connection between employees relates to asking questions. So for
instance, an employee who has an ‘ask me about’ field completed on their profile will get a notification
whenever anyone in the organization asks a ‘question’ (a specific type of post) with a hashtag term that
matches their ‘ask me about’ field in their profile – regardless of whether they are already connected.
So we have seen employees asking for specific templates and questions and then having people from all
over the organization respond with the answers. This means that the collective knowledge of the
organization is, in a very practical way, much more accessible."
Air Liquide has found business value in their competitive intelligence community.
“A business developer in India once had to answer to a very specific, technical question from his
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6. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
customer about a competitor’s solution. He started a discussion thread in the Competitive Intelligence
community and quickly gathered key replies from experts around the globe. Not only was he able to
satisfy his customer’s need, but this information now remains available to peers who have a similar
question in the future.”
Business involvement makes the difference.
The tipping point happens when business functions start working in socially collaborative ways. Although
it's obviously important for general employee support functions such as Communication, HR, IT and
Knowledge Management to be involved in social collaboration, the significant difference is when
Business gets involved.
When Operations, R&D/Engineering and Sales/Marketing and Customer-facing people start leveraging
social software to do their jobs, it means social collaboration is being taken seriously. The chart below
shows that Business functions in Early Adopters are more likely to be an “active and driving force”
and/or “visibility active”.
The beginning of change: social as a new way of working
So why are venture capitalists are losing interest and why are fewer customers are buying social
software today? It's because companies are not buying: they are doing. It is the beginning of a new era,
an era of focusing not on the tool but on behavior and change in ways of working.
The Early Adopters are currently tackling the big issues of How - how do we go about bringing change?
That's the main reason I joined Change Agents Worldwide as a charter member over a year ago. CAWW
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7. NetJMC - JANE McCONNELL
DIGITAL WORKPLACE STRATEGIES
http://www.netjmc.com
is a group or passionate people, inside and outside of enterprises, who discuss, create and work
together helping make change a reality and not just a vision on paper.
The What - the social platform itself - is already dealt with, at least for Early Adopters. As for the
Majority, we may need to wait a little longer before they join the movement. When there are more
meaningful stories out there, coming not from vendors but from the organizations themselves, we might
see deployment (and therefore sales) pick up again for enterprise social software. Whether or not it will
be the current big ESN players that benefit or a new generation of social software solutions remains to
be seen.
Transformation happens step by step. There's no big bang here.
For the organizations in “wait and see” mode, it might be hard to catch up with the others later.
Deployment of a tool is relatively fast compared to changing behaviors. The sooner you start, the sooner
your organization will discover its own path. And although there are a few "good practices", each
organization will have to find its own way, step by step. This is not a big bang change we are talking
about.
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