Social Business - The Patchwork Elephant 01 - The patchwork elephant revisited - Alan Patrick


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Within Social Media Week London 2013 The Patchwork Elephant Team ran an event discussing the future of Social Business (or what some people call Enterprise 2.0) - about using social tools inside as well as outside the organisation, for internal and external teams to collaborate, to make business more effective. We ran a similar event within the February 2010 edition of Social Media Week London. We called it "Social Media in Enterprises - The Elephant in the Ecosystem" and we used a patchwork elephant to symbolise the theme - it's a patchwork elephant because it's very large, in the room, but it's hard to see the whole thing!

Business models are changing, and social technologies are ever more important in the way we work, but where are we really? 8 Different speakers asked:

* How has social business evolved?
* What is the current state?
* How does social integrate with our systems and processes today?
* What are the challenges for implementation and achieving success?
* Where are we headed?

Our speakers were:

Alan Patrick - Broadsight (and The Patchwork Elephant Team)
Janet Parkinson - Technotropolis (and The Patchwork Elephant Team)
Will McInnes - NixonMcInnes (author of Culture Shock)
Mat Morrison - Starcom MediaVest Group (World's Oldest Living Social Media Guru™)
Luis Saurez - IBM (famous for living outside of the inbox)
Neil Usher - WorkEssence
Anne-Marie McEwan - The Smart Work Company (author of Smart Working: Creating the Next Wave)
David Terrar - D2C (and The Patchwork Elephant Team)

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Social Business - The Patchwork Elephant 01 - The patchwork elephant revisited - Alan Patrick

  1. 1. Social Business The Patchwork Elephant Revisited September 2013 broadsight 1
  2. 2. Contents • 3 years ago • What is the situation today? • How will value be created by Social Business • The next 2 – 10 years • The next 30 years broadsight Copyright Broadsight Ltd 2
  3. 3. 3 Years Ago Conclusions from the first Patchwork Elephant session in 2010 •“Demand Generation” will be the early win •We have "Peak Organisation" - organisations designed on 18th century principles are just not fit for purpose today •Differences between corporate hierarchy networks and the "real" networks that make things work are laid bare •Social network projects growing "au naturel" in an organisation are patchy and have a few massive nodes, who cause mass failure if taken out. •Traditional hierarchies are orthogonal to social media structures – resistance may be futile, but it will be strong. •Need to aggregate an emerging body of knowledge about what works and what doesn't. broadsight Copyright Broadsight Ltd 3
  4. 4. What have I learned over the last 3 years? Client work we have done shows that: •Social Business is systemic – you have to connect the front end activity with the back end at a minimum… •….and ideally it has to flow through the internal communication chains too… •….but its not going to go away. •Its very hard to connect companies in a value chain, “EDI 2.0” methods work better •“Enterprise 2.0” systems won’t work if the “Enterprise 1.0” technology isn’t working. •Culture follows commerce broadsight Copyright Broadsight Ltd 4
  5. 5. Situation Today Business Value Chain – Social technology Heat Map New ! Marketing Sales Produce Deliver Monitor Service Procurement Finance Human Resources IT Support Research & Development broadsight Copyright Broadsight Ltd 5
  6. 6. How will value be created? Average Sale £ Sales Volume Primary Impact – reduces loss of existing customers and revenue Operating Cost Total Value Created Primary Impact – increased attractiveness/ recruitment increases customer base Churn Increase Revenue Secondary impact – a better reputation allows a higher value offering to be attractive Primary Impact – lower costs of attracting & serving customers if both losing less and gaining more Close link Reduce Costs broadsight Copyright Broadsight Ltd 6
  7. 7. The Next 10 – 20 Years Potential Productivity Improvements by Industry (i) broadsight Copyright Broadsight Ltd 7
  8. 8. The Next 10 – 20 Years Potential Productivity Improvements by Industry (ii) broadsight Copyright Broadsight Ltd 8
  9. 9. The Next 30 Years – “Peak Organisation?” Ronald Coase – Theory of the Firm But Social Technology reduces the transaction costs…. Question: Given that “production could be carried on without any organization at all”, and given that “the price mechanism should give the most efficient result,” why do firms exist? The Question stays the same why do firms exist? Coase’s Answer: Firms exist because they reduce transaction costs, such as search and information costs, bargaining costs, keeping trade secrets, and policing and enforcement costs. broadsight What are the emerging Answers? •Internal efficiency less important than created value •You can contract out easily and effectively for algorithms. Very difficult to contract for heuristics •Not all transaction costs are controllable by technology, some will remain (eg global supply chain). 9 Copyright Broadsight Ltd
  10. 10. The Next 30 Years – Predicting the unpredictable There is only so far you can go with interpolation and projection, sometimes you have to look at a predicted endgame and see how it might occur broadsight Copyright Broadsight Ltd 10