Revised version of The Business Case for Corporate Social Netwoks - enterprise 2.0, social media for business, internally & externally, case studies - delivered to the O2 Corporate Advisory Council 24th and 26th November 2009
The business case for corporate social networks. Use of enterprise 2.0 or social media in business internally and externally. Case studies and suggested approaches to building the business case.
The enterprise 2.0 story is all about evolution. This year it’s the 200 th anniversary of Charles Darwin’s birth, so here’s a quote about him from Richard Dwarkins that relates natural selection to the existence of organized complexity - the kind of complexity of the social networking topic that this conference is all about. We communicate, collaborate and form social networks. Why do we do it? We’ve been doing it since the stone age. We do it because it works. Look at the evolution of collaboration technologies: Paper - Printing Press - Telegraph – Telephone – Fax – E-mail – Groupware collaboration – Web 2.0 & Enterprise 2.0. Each of these has provided a step change in the way we collaborate.
For those of you in the audience who have come to find out if this enterprise 2.0 topic can be of use to your organization, I have two recommendations. 1. Start to experiment with the available social networks and get some experience of how this stuff works. 2. Do some research and read some books on the topic. Throwing Sheep in the Boardroom is one of the best at explaining why this topic is so important to business. It explaining the phenomenon from both the sociological and psychological aspects of the factors at work. It’s full of great stories, anecdotes, and charts the history of how enterprise 2.0 and web 2.0 have developed - a very good read.
I’ll explain some of the aspects and context of corporate social networking and enterprise 2.0, a little about the way you approach implementing these types of solutions effectively, as well as how to use Twitter and external social networks like Linkedin, YouTube or SlideShare. Then talk through some real examples. Finally I’ll summarize with some conclusions, and the various references and links mentioned in the presentation. Key pint – enterprise 2.0 is as significant a change for the unstructured processes that a company does, as when CRM and ERP arrived to transform the structured business processes.
The different aspects of enterprise social media, with the outcomes and enablers they are associated with, and the increasing value as we move down those levels.
This is the map of opportunity to highlight the ways enterprise 2.0 can help. For example ways to improve productivity leading to cost reduction, building customer communities leading to growth, idea management leading to innovation, or change management using 2.0 tools leading to transformation. Anu Elmer of Swiss re talked through collaboration on a presentation the old way with email the document to a team of 4 people. Suddenly you have 5 copies of the doc and you are out of control, plus you have to aggreagte the 4 point to point conversations manually. Pu the doc in a wiki, and there is only one master copy, and a single threaded discussion with everybody collaborating. Much more efficient, and that can be replicated across so many processes.
Enterprise 2.0 and social media isn’t just applicable to marketing or customer service. It can help any and all areas of the business from product development through sales, serice to operations and back office.
One of the key issues with enterprise 2.0 and social computing is that it fosters self-organizing collaborative networks and ad hoc information sharing. Most organisations have a traditional hierarchy with information being pushed down the organization chart from the top. It comes down to the culture of the orgainsation, but not every company is ready for that hierarchy to be “subverted”. It involves some risk on behalf of the management. They need to trsut their employees to do the right thing. They have to recognise that they will lose control. There is a great case study from Cisco on exactly this subject coming later.
The link gets you to a free version of John Gourville’s excellent article. Consumers over weight their existing product by 3 times. Vendors overweight how great their new solution is by 3 times. That combined together means that your mouse trap has to be 9 times better if it is going to get adopted. You need to recognize that “need to be an order of magnitude better” hurdle.
There are plenty of ways you can use enterprise 2.0. The crucial thing is think business process first, and sort out the appropriate technology second. I see too many projects that start with a particular blog, or a particular wiki and focus on how to use the technology. These should be business oriented projects first, that happen to use a new form of IT to support them.
I come from a background of implementing ERP and Finance solutions and we love methodologies. For enterprise 2.0 they are important too. However, every organization is different, with a different culture, so your methodology and approach needs to be very flexible to accommodate those differences. Our method for implementing enterprise 2.0 is called SWITCH. These are in priority sequence - the most important thing to do to work out what you are doing and why your audience should participate before you think about technology.
Being on networks like LinkedIn, or Xing can be important. They are great as an online CV, but more and more businesses are using them to network for partnerships or sales. YouTube can be a great channel, as can publishing your presentations on Slideshare. You can use all of the different communication channels to spread your message and connect with people.
JP Rangaswami is the MD of BT Design, which effectively means he is BT’s CIO. He is a great thinker with a great blog. Here is his 140 character explanation of Twitter. An adda (Bengali: আড্ডা ) is a South Asian concept, a form of intellectual exchange among members, who were originally of the same socio-economic strata, but the process has democratized in modern times.
Twitter is not just about celebrities like Stephen Fry with a million followers. Although there is plenty of nonsense and rubbish, or people reporting what they are eating, it is a tool like any other. It can add enormous value as an information respurce, or as a communication medium, or for helping you find your community. Here is the 3 step process for making use of Twittter. Use search to find your community (by topic, key words, etc.) add value for them, and make that a regular part of your day to day workflow.
Twitter si scalable. Because it is easy to monitor and you use it asynchronously, not like a 1 to 1 conversation of a call centre, then a few people can handle a lot of conversations. Wachovia Bank have just 2 people monitoring for customer service and help issues. Dell have a small team that finds issues on Twitter, and that generates them an additiona $10m a year in sales. Tiny in comparison to Dell’s overall revenue, but it’s incremental sales with a very modest effort.
You can use alerts and search and manual effort to monitor your online reputation. Or you can use a tool like BrandsEye which will monitor all the online conversations for you, and the turn that in to business intelligence to help you manage your brand’s reputation.
Anu Elmer's explanation of the collaboration platform they call Ourspace inside Swiss Re is another great &quot;text book&quot; example of how to get enterprise 2.0 and social media adopted properly in the corporate landscape. Swiss Re is the World's second largest reinsurance company and has been in operation since 1863. Their business is all about understanding risk, and they are known for being a conservative organization, which makes it all the more powerful that they have made such a success of this new technology. Anu, who is their Vice President of Communications and HR, told us that the mantra for the project is the proverb &quot;None of us is as smart as all of us&quot;, which is a superb way to position their intent. She says: &quot;increasing virtualisation of work including a large number of geographically dispersed teams drove the need for a collaboration platform in Swiss Re. We needed to break silos and increase interaction between different units and experts..&quot; Swiss Re have done some of the classical things you need to do to make a project like this a success. The project was sponsored by a member of the Swiss re Executive Committee. Before they started they held an online strategy &quot;jamming&quot; session involving a significant percentage of all Swiss Re staff - this is an online, forum based discussion, a concept first piloted by IBM back in 2001, something that we strongly advocate. When the project itself started, they involved 1,300 users in a pilot that ran from April to September. The platform, based on Jive, is available to all 11,500 employees. As of today 55% of all Swiss Re employees have logged in at least once, and they are seeing a steady increase in creation and viewing of content. There are currently 347 groups created for collaboration on business topics with both global and local themes. The participation is cross-functional and comes from all regions and countries. They had used data from an existing internal user directory, called &quot;Who is&quot;, as a starting point and IT had been amongst the first regular users, but eventually they've even got their account managers involved. There are some important messages to learn from their adoption story. Anu explained that they had to fight against the perception that they were creating an internal social network like Facebook, and that the social media terminology got in the way (more on that in a later post). They were careful to position this as a set of business collaboration tools. They spent time considering what type of exclusive and interesting content the community would need. They trained community managers and recognized (and budgeted for) the significant amount of time that group moderation, support and management takes. They identified a network of advocates, or champions, who they helped develop and encourage. They consulted group owners to see what more they could do to help. Anu also commented that it took a lot of off-line promotion to get things moving. One of the key questions that people from the corporate world ask about this kind of project is where is the ROI and how did you cost justify the project. Anu used the classical example of old style group working with a presentation sent by email to 9 people. You are immediately out of control, with 10 copies of the presentation - who's got the latest version? You then have to track and make sense of all the email dialogue back and forth. If you put that presentation in a shared group, the master presentation is in one place, and the team can have a sensible, threaded discussion together to agree what needs to be done. Anyone can see the benefit to that style of collaboration, but part of the problem with tracking ROI is that the company didn't measure how efficiently it worked the old way, so it's not easy to come up with &quot;hard numbers&quot; to help cost justify the spend to get to the new way. When we discussed this Anu explained that Swiss Re had taken a similar line to some other companies like Wachovia. They argued a very modest percentage saving in overall travel budgets. They had two existing, old, and not very effective Knowledge Management systems within their Intranet. These systems were turned off and the associated cost savings along with the travel reductions were used to help fund the project.
John Chambers is the CEO of Cisco. In this YouTube video he explains Cisco’s second major transformation with ‘business networks’ - the application of enterprise 2.0 inside the company. Well worth investing 1 hour and 6 minutes of your time. He explains he has an operating committee (11 people) that runs the company, ‘Councils’ that run $10 billion opportunities, “Boards’ which run $1 billion opportunities, ‘Working Groups’ that can support the councils and boards or other transactions within the company. His b biggest barrier/challenge was letting go of command and control. He admits he is from that school, but letting go has allowed him to achieve big benefits. Before the changes his operating committee could handle 2 projects/opportunities, but after e2.0 they can now handle 26 projects. The video provides lots of good quotes, anecdotes, and is a very good case study. See also http://mitworld.mit.edu/video/619
Pete Fields Portal, SSO, Web Parts/Portlets, Search, Wikis, Blogs, Enriched profiles, Presence 15,000 active team sites More than 6000 web conferences a month Saving $214 per web conference – dropped steadily over time as it should – here’s hard dollar savings More than 100,000 IM sessions daily More than 1500 entries thus far into Wachovia Wisdom August saw 46,000 visits to blogs Engage Gen Y Workers
ICAEW is a medium sized business, a little over 200 people. If you are an accountant in the UK this is the professional membership body you are most likely to be a member of. They have regional groups, special interest groups and faculties that meet. Their revenue comes from membership fees and advertising in their publications. They know the advertising revenue streams are disappearing, so adopting enterprise 2.0 is part of a change in business model for them. They have implemented an online network to connect together their 130,000 members. This will help the membership connect, collaborate and share knowledge more effectively, but it also provides ICAEW with sponsorship opportunities. They can sell sponsorship of the communities to key vendors who want access to these accountants and decision makers - companies like SAP, Sage, CODA, Xero, Twinfield, Oracle. The sponsorship revenue replaces the advertising revenue they are losing.
The 2.0 Adoption Council is for practitioners and companies actually doing the projects – no vendors. The associated community is for any bloggers consultants and vendors too. Hopefully we can share best practice and build more case study stories.
Last year at the Boston Enterprise 2.0 show, one of the best presentations was by Shawn Dahlen and Chris Keohane of Lockheed Martin. They explained the history and progress of their in-house developed Unity system that is spreading inside the organization. They started with a small pilot costing $8,000 which worked, and led to the next step which cost $50,000, and then they have steadily grown the team to 40 full time developers building and maintaining the infrastructure. Their system is based on the Microsoft SharePoint tool kit, as well as Google Search Appliance and Newsgator. They provide personal space for the individual, team spaces, blogging, wikis, document management, discussion forums, bookmarking and activity reporting. Although they aren't the originators of the phrase, their key message for anyone deploying enterprise 2.0 solutions was: &quot;think big, start small, move fast&quot;
If you are trying to get your head around how old style broadcast marketing is changing to the new style of permission based marketing you need to read Meatball Sundae. If you want to understand how the web is helping people get together around a product they are passionate about, or a cause they believe in, then you need to read Tribes. These two Seth Godin books are my recommendation as the quickest way to get to grips with how dramatically the world of marketing has changed over the last 5 years.
References and links for the things mentioned in this presentation.
All of the SME/SMB companies mentioned in this presentation are our customers. Please don’t hesitate to contact me if you need some free initial advice, or you need help with building your enterprise 2.0 solution. I would love to hear from you.
The Business Case For Corporate Social Networks For O2
The Business Case for Corporate Social Networks enterprise 2.0, social media for business, internally & externally, case studies David Terrar – D2C and WordFrame O2 Corporate Advisory Council – November 24 th & 26 th
Charles Darwin – natural selection “ The theory of evolution by cumulative natural selection is the only theory we know of that is, in principle, capable of explaining the existence of organized complexity.” Richard Dawkins
Recommended reading http://www.throwingsheep.com/ “ Networked Web 2.0 tools and technologies are making a profound impact on every aspect of our lives as social networking changes forms of entertainment in our personal lives and business models in the workplace.” John Chambers, Chairman and CEO, Cisco “ Web 2.0 social networking has far-reaching consequences for corporate executives managing relationships with customers, employees and business partners.” Henning Kagermann, Chairman and CEO, SAP
Agenda <ul><li>Corporate social networking and enterprise 2.0 aspects </li></ul><ul><li>The map of opportunity, where business and IT change is happening now </li></ul><ul><li>Still in the adoption chasm? </li></ul><ul><li>The 9x Effect </li></ul><ul><li>Enterprise 2.0 solutions, making enterprise 2.0 work </li></ul><ul><li>A word about Twitter, external social networks, Reputation management </li></ul><ul><li>Examples: </li></ul><ul><ul><li>Swiss Re </li></ul></ul><ul><ul><li>Wachovia </li></ul></ul><ul><ul><li>Cisco </li></ul></ul><ul><ul><li>Nokia </li></ul></ul><ul><ul><li>Intel </li></ul></ul><ul><ul><li>TransUnion </li></ul></ul><ul><ul><li>ICAEW </li></ul></ul><ul><li>Conclusions </li></ul><ul><li>References </li></ul>
The Map of Opportunity <ul><li>Creating new rapid growth online products powered by: </li></ul><ul><li>Peer Production </li></ul><ul><li>Jakob’s Law </li></ul><ul><li>The Long Tail </li></ul><ul><li>Blue Ocean </li></ul><ul><li>Network effects </li></ul><ul><li>Reinventing the customer relationship to drive revenue: </li></ul><ul><li>Customer Communities </li></ul><ul><li>Customer Self-Service </li></ul><ul><li>Marketing 2.0 </li></ul><ul><li>Driving costs down through less expensive, better 2.0 solutions: </li></ul><ul><ul><li>Lightweight IT/SOA </li></ul></ul><ul><ul><li>Enterprise mashups </li></ul></ul><ul><ul><li>Expertise Location </li></ul></ul><ul><ul><li>Knowledge Retention </li></ul></ul><ul><li>Improving productivity and access to value: </li></ul><ul><ul><li>Enterprise 2.0 </li></ul></ul><ul><ul><li>Open APIs </li></ul></ul><ul><ul><li>Crowdsourcing </li></ul></ul><ul><ul><li>Prediction </li></ul></ul><ul><ul><li>Markets </li></ul></ul><ul><li>Business Remodeling and Restructuring </li></ul><ul><ul><li>BPM 2.0 </li></ul></ul><ul><ul><li>Employee Communities </li></ul></ul><ul><ul><li>Cloudsourcing </li></ul></ul><ul><ul><li>Pull Systems </li></ul></ul><ul><li>Change Management </li></ul><ul><ul><li>Transformation Communities </li></ul></ul><ul><ul><li>2.0 Education </li></ul></ul><ul><ul><li>Capability Acquisition </li></ul></ul><ul><li>Fostering Innovation </li></ul><ul><ul><li>Internal Innovation Markets </li></ul></ul><ul><ul><li>Open innovation </li></ul></ul><ul><ul><li>Database of Intentions </li></ul></ul><ul><li>Leveraging Innovation </li></ul><ul><ul><li>Product Incubators </li></ul></ul><ul><ul><li>Open Supply Chains </li></ul></ul><ul><ul><li>Product Development 2.0 </li></ul></ul><ul><ul><li>Some Rights Reserved </li></ul></ul>Innovation Transformation Cost Reduction Growth Current Business State
Where business and IT change is happening now... Product Development Marketing Sales Operations | IT | Back Office Line of Business Customer Service crowdsourcing online community cloud computing mashups open APIs SaaS Enterprise 2.0 & Open Business Models 2.0 development platforms (social media in the enterprise) Product Development 2.0
Is Enterprise 2.0 still in the chasm? http://www.chasminstitute.com/METHODOLOGY/TechnologyAdoptionLifeCycle/tabid/89/Default.aspx
The 9x Effect <ul><li>John T. Gourville – Albert J. Weatherhead, Jr. Professor of Business Administration at HBS </li></ul><ul><li>Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption </li></ul><ul><li>New product has to be 9 times better! </li></ul>http://www.scribd.com/doc/16696/Eager-Sellers-and-Stony-Buyers-June-2006
Enterprise 2.0 solutions? New Product Development Customer service Idea generation Market research Developer relations Amplifying Word of Mouth Employee communications General Marketing Reputation management Product testing Public relations LONG TAIL SALES PROJECT COLLABORATION Co-innovation Member networking Capturing Knowledge
Making enterprise 2.0 work S tart with the end in mind W hat's in it for me I ntuitive and simple T echnology supporting not leading C ommunity management H elp and resources
Some words about Twitter <ul><li>Not just about celebrity </li></ul><ul><li>Like any tool – can be used well or badly </li></ul><ul><li>How to use Twitter (social media) </li></ul><ul><ul><li>Find your community </li></ul></ul><ul><ul><li>Add value </li></ul></ul><ul><ul><li>Make it part of your workflow </li></ul></ul>
Swiss Re <ul><li>Break down silos, increase interaction </li></ul><ul><li>Online Jam session, senior exec sponsorship </li></ul><ul><li>Pilot for 1,300 users </li></ul><ul><li>Now 347 groups collaborating </li></ul><ul><li>Available to all 11,500 emplyees, 55% have logged in at least once </li></ul>"None of us is as smart as all of us"
From Command and Control to Teamwork and Collaboration http://www.youtube.com/watch?v=9WX7BNnYTf8&eurl=http://
Wachovia Office 2.0 Conference 2008 SF Pete Fields - Leads Enterprise 2.0 Business Strategy for Wachovia http://office20.com/docs/DOC-1130
Nokia <ul><li>Today, Nokia estimates at least 20% of its 68,000 employees use wiki pages to update schedules and project status, trade ideas, edit files, and so on. </li></ul><ul><ul><li>"It's a reversal of the normal way things are done," says Stephen Johnston, senior manager for corporate strategy at Nokia, who helped pioneer the technology. Where Nokia once bought outside software to help foster collaboration, now "some of the most interesting stuff is emerging from within the company itself," says Johnston. - Source : BusinessWeek </li></ul></ul>
Intel <ul><li>In late 2005, Intel engineer Josh Bancroft was looking for a tool that his colleagues could use to share company information. </li></ul><ul><ul><li>Historical information or the progress of internal projects. </li></ul></ul><ul><li>Inspired by Wikipedia, the online encyclopedia assembled by users around the world, he devised Intelpedia , an internal Web site that draws on the input of employees from across the company. </li></ul><ul><li>In a year Intelpedia had accumulated 5,000 pages of content and garnered over 13.5 million page views. </li></ul><ul><ul><li>"Employees can be frustrated that somebody else edited their work," says Jeff Moriarty, collaboration technical architect of Intel's information technology group. "It's a disruptive capability—it shakes things up." </li></ul></ul>
TransUnion <ul><li>One of the big 3 credit report companies in USA </li></ul><ul><li>$50,000 on a social networking platform </li></ul><ul><li>Estimated $2.5 million in savings in less than five months </li></ul>CTO John Parkinson: "It was never very clear to us, looking in, who the authoritative sources were, who was good at solving problems. Now we can see a lot of that because we're starting to see patterns emerge, to see who's following whom, who's the good source of questions, who offers good answers. All those things that you sort of know by the grapevine, we now have data for."
Key take away from Lockheed Martin E2.0 Conference 2008 Boston Christopher Keohane, Unity Product Owner Shawn Dahlen, Unity Program Manager
Conclusions <ul><li>Over a hundred case studies in the affirmative, though most are large enterprise </li></ul><ul><li>Successful roll-outs at SME/SMBs, Fortune 500, and Global 2000 </li></ul><ul><li>Forrester has declared the existence of an Enterprise 2.0 industry that will be $4.3Bln by 2013 </li></ul><ul><li>Monitor external channels and your brand/reputation </li></ul><ul><li>“ Wisdom of Crowds”, collaboration, community </li></ul><ul><li>2.0 Adoption Council – join the community </li></ul><ul><li>Focus on business process not technology </li></ul><ul><li>“ Think Big, Start Small, Move Fast” (Lockheed Martin) </li></ul>
Recommended reading Meatball Sundae: Is Your Marketing out of Sync? and Tribes – Seth Godin