Pretzel Logic – Social and Collaborative Business

If you’re a large organization using enterprise content management systems (ECM), chances are that its powering images, documents and records management, and web content. These systems enforce roles, workflows, access control and versioning to enable the creation, management and dissemination of media assets.

What this means is that from the very beginning of a given business activity, a few people control the creation of information that employees, customers, partners and suppliers rely on to move your business forward. Like it or not, this puts the responsibility/power to influence business performance in the hands of a few, with little input from other unknown experts, or consumers of this data. You only find out how effective the content turned out to be once its consumed (and long after you can optimize).

I’ve spent a decade working with business units at large organizations designing global communication and collaborative initiatives in the areas of sales and marketing, employee comms, channel collaboration and brand management. But I wanted an outside perspective. So i reached out to Billy Cripe, co-author of Reshaping your Business with Web 2.0 and Director of Product Management in Oracle’s Enterprise Content Management Group. An Enterprise 2.0 advocate himself, Billy brings a unique perspective given that he focuses on understanding how social computing blends with existing enterprise content management – something that many medium to large organizations are going to have to deal with if they buy into the design and promise of Enterprise 2.0. All control is not good but all social is certainly not always optimal. That’s an important part of any E2.0 execution plan.

Achieving a state of Enterprise 2.0 requires surgically moving the nucleus of a business activity from process driven systems to people centric environments. I asked Billy to identify 3 inefficiencies in traditional content management processes that impede business performance, where social computing can help:

Wrapping the best brains around the problem

Billy and I also talked about how Enterprise 2.0 enabled organizations will blend social computing and structured process by turning siloed unstructured content into ‘social objects’ early on in the process. For instance, instead of using traditional access control-heavy CMS workflow when working on early drafts of marketing collateral for a product launch, or market projections for a new line of business, a wiki – style environment opens up discussions around early drafts to more constituencies before the owner moves this into formal production. Social networking features enable you do discover ‘experts’ and invite them to contribute. Micro blogging concepts make your business activity noticeable across the organization so others can be aware of where they can help. In addition to refining the end product, think of the risk you can mitigate by having the right voices pipe in, early on. Examples of early collaboration include:

• Early feedback on product specs from loyal customers before you lock feature sets.
• Deeper understanding of product strengths from supply chain partners that intimately know the power of each component in your product.
• Feedback from channel partners that might be critical to meaningful distribution and adoption, post launch.
• Getting previously unknown subject matter experts in distributed organizations to provide insight on an RFP response.
• Leveraging the signals: A contact center rep gets to peer into community content or find experts to support sometimes bland one-dimensional answers coming from the knowledge base or ERP system.

When you layer in social computing concepts at the early stages of content creation, you have the ability to encourage such uses of raw ingredients (or social objects). These social objects, previously hidden in an access controlled CMS environment are now unlocked via social computing concepts and tools. The beauty is that they can now be work in progress for some, finished product for others that participate or discover it, or can be interpreted in totally different ways, never intended by the original participants.

Does Your Content have legs?

Analytics gained via social computing architectures fold in accountability and measurement at the social object level as well as the meta-data (rankings, ratings, tags etc) on each content type. This enables you to learn if/how content is being used to truly accelerate business performance. What types of content are highly rated or most re-used, what business activity was most impacted by specific social objects? The business of creating and managing content (and budget) is often a “black hole” at large organizations. Social computing analytics let you measure the value of each building block (and the programs that create them) so you know which horse(s) to back, going forward.

Important Execution Elements to Consider

In no way do I want to imply that just throwing in a social suite will make this work model a reality. It won’t. A couple of important considerations:

• This is not about a more effective content management process. Its got to do with strategically using social concepts to change how your organization collectively creates, vets and leverages content.
• Design processes and select applications that can accelerate business activity. If you start with “I need a new content management strategy”, you’re likely off to a wrong start. If your thinking about say how to improve sales close rates by better alignment between sales and marketing content, you’re approaching the problem correctly.
• Make participation available but surgically enforce controls where needed.
• To ensure adoption and mitigate risk, check whether you’ve answered the “what’s in it for me” question before you expect partners, employees, organizational departments or customers to jump in and play.
• Vendors may call their offerings platforms, solutions, whatever. At the end of the day these are tools. Lead with the inherent business performance goals that should govern any potential Enterprise 2.0 organizational design and work backwards to figure out the right platform or best of breed solutions architecture.

Vendors Moves

ECM technology offerings are going to morph at a phenomenal rate over the next 6 months. Some will bring social computing to ECM. Others will wrap Social Computing and ECM around ERP. Oracle is making very commendable moves by fusing its ECM, Portal and Social Offerings. OpenText is also going back to the drawing board (interview by Cheryl McKinnon) on what content management means in the socially connected enterprise. And Acquia is bringing an industrial strength offering to businesses, based on its hugely successful Drupal open source CMS offering. More on OpenText and Acquia in subsequent posts.

I’d like to close with a special thanks to Billy for taking the time to chat.  He was very careful to disclaim that his lens might be slanted towards incumbent content management processes.  In fact that’s exactly what I was looking for, so we could provide value to thousands of large organizations that have heavily invested in some formal content management process.

I’m going to be on a panel at the New Metrics for New Media Workshop at Stanford University on August 6th, in Palo Alto. The event is organized by Martha Russell, Associate Director of Media X at Stanford, and Marc Smith, Sociologist and Chief Scientist at Telligent Systems.

Some details about the event here:

The conundrum of the participatory media culture is that participation is expected, but continuous, dedicated attention cannot be assumed.  Legacy audience media metrics, such as CPM (cost per thousand) and CPI (cost per impression), have broadcast media as their reference. These metrics were developed because channel developers, advertisers and their clients needed to quantify the cost/benefit of media purchases. At the time they were developed, these legacy metrics assumed that each channel delivered media to its audiences (individuals, family, etc.) in a singular fashion.  The legacy media metrics assumed that each media exposure occurred in isolation, that viewers were attentive, and that viewers’ attention was dedicated to a single medium.

Consumer generated content has further complicated the differentiation of purchased media (space in the media that is purchased by advertisers) and earned media (space in the media that is acquired without payment through journalistic and public relations efforts).  To more accurately measure the quality and quantity of viewers’ engagement, the distinction must also be made between assumed attention, in which audience metrics count the number of people who could potentially pay attention to a message, and earned engagement, in people actively choose to pay attention.

Social media and virtual worlds offer two important frontiers for measuring earned engagement. In both, audiences are actively engaged as participants. This workshop will cover foundational concepts in media measurement, describe new frontiers in measuring audience engagement in social media and virtual worlds, and provide hands-on experience in using new analytical tools.

I’m involved in this session:

Day One:
Media usage, measurement and analysis: legacy concepts, forces of change, emerging metrics for social media and virtual worlds, and the creative tension of academic and business influences.

Given my Enterprise 2.0 focus, and in particular, our work with Sales and Marketing groups at large organizations, I plan to focus on how businesses can accelerate performance via new forms of insight, brought about by social media analytics. Something that’s integral to overall Enterprise 2.0 enablement.

Full details on the event and a short video by Martha and Marc available here:

http://mediax.stanford.edu/WSI/metrics.html

If you would like to see specific data points covered, chime in in the comments or drop me an email.

Hope you see you there.

Earlier this week, I did a Q&A with the folks at Helpstream on the need and importance of customer communities to the enterprise.

We covered the following topics:

• the importance of building customer communities as part of an Enterprise 2.0 design 
• the role of a community manager and skills
• which functional areas will get the most value from communities in the enterprise
• important questions you need to think about when building a community
• have we reached the ‘social tipping point’ wrt the need for a community

Here’s an except:

Helpstream: What’s your general feeling on the importance of building customer communities for companies today?

Me: A customer community is one of the more promising components of the emerging enterprise design that’s powered by social computing technology. In a world before online communities existed, insight into customer intent and sentiment was limited to the few people on the organizational front lines. In contrast, most community initiatives today offer an open format that enables everyone in the organization to see what customers expect from you. But that only signals the very beginning of the promise of the open enterprise. Eventually the best minds across your organizations’ supply chain, employee and customer base, and distribution partners will be able to truly rally around the needs of your prospects and customers – often in real time, to accelerate business performance. A critical initial step to realizing such a work model is a well-conceived customer community.

The rest of the Q&A is over on the Helpstream blog, here.

Thanks to the folks at Helpstream for reaching out.

Dion Hinchcliffe kicked off this weekends’ Enterprise 2.0 meme with a well articulated post on determining ROI. The central theme of the article suggests that its challenging to identify where and when E2.0 ROI returns will be realized and why.

Dion goes on to say that IT managers are mainly taking a wait and see approach for the following reasons:

1. One is an broad wariness of a new horizontal information technology approach that purports to solve so many problems and will overlap with existing solutions….

2. A second set of issues is related to corporate culture and its fundamentally hierarchical nature, which seems anathema to the flattened, highly social nature of Web 2.0 in the enterprise.

3. Accurate predicting of the return on investment of an IT solution.

Dion’s post follows a series of somewhat realistic (or negative, depending on your view) articles that we recently saw from the likes of Susan Scrupski, Gil Yehuda and to some extent Venkat Rao. Venkat was focused on why culture doesn’t matter but if you look at his reasons (e.g. The Churn argument which states – Radical ideas “get adopted because the nay-sayers retire or die out and get replaced by others.”), it’s bordering on wrist-slitting, depressing outcomes, required to make Enterprise 2.0 a reality.

In a 2008, Gartner Research defines the Hype Cycle of Emerging Technologies as:

• Technology Trigger
• Peak of Inflated Expectations
• Trough of Disillusionment
• Slope of Enlightenment
• Plateau of Productivity

In his post labeled, “Enterprise 2.0 and the Trough of Disillusionment“, Hutch Carpenter creates a good summary post that explains that Enterprise 2.0 has graduated into the “trough of disillusionment” implying much needed hope that the “Slope of Enlightenment” will soon be upon vendors and customers alike.

I was thrilled to see Dennis Howlett chime in on this topic this morning with his post titled “Enterprise 2.0 promise is years off…if it materializes.” Some key quotes for me:

“Marketers would do far better to concentrate on a sliver of functionality that has meaning to the C-suite rather than grand statements, laced with competitive FUD.”

“The problem comes down to the individual perception of IP value and how that might be threatened”

“For instance, I’d be far happier to see cases where there is an identified pain point and then build out from there rather than dangling cascading network effects further down the line.”

The last quote above, my favorite by a mile, really got me thinking about how all this breaks out. Can we rest easy, realizing that we must feel the pain of natural transitioning through the “Trough of Disillusionment”? Will vendors and customers have the stamina to work through the cascading process in Dion’s diagram that will eventually show real return at the point of “3rd order cause and effect”.

Frankly, I’m nervous about both approaches. I don’t believe that most vendors (and the innovation they bring) will be able to withstand this long a process to show real ROI. Telling VC’s that we’re in a “Trough of Disillusionment” won’t be enough to raise the next round of funding in this or any economic climate. In turn, proponents of using social computing software on the customer side will likely get shot down, were they to present a long drawn process to showing real results.

As I’ve said and illustrated earlier, (as does Hutch in his post) focus on the business activity and the pain felt and you have a solid chance of skipping some of the steps in Dions’ diagram above. Sell horizontally (customer wide or employee wide) and you better be prepared to go through each of the 1st, 2nd and 3rd order cause and effects.

My interaction with LOB executives has consistently shown that in this economic climate, the knee jerk reaction has been to pour more money into current programs. New investments are being made for sure BUT instead of experimenting with new software or programs, more money is being thrown at current programs that have historically yielded the best return. With this reality in mind, showing a cascading return that has no definite time line, emanating from a new unproven technology investment, is going to mean certain death for many promising E2.0 initiatives.

Instead, focusing on a specific business activity. Prove results in a contained fashion and illustrate more attractive cost/return when extrapolated across the business unit. This affords the best opportunity to jump the natural evolution cycle and bypass some of the earlier nebulous effects of adoption that can’t be translated into real dollars.

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• How I Address the Question of Enterprise 2.0 ROI (bhc3.wordpress.com)

I’ve seen lots of commentary lately from smart folks that I respect about how social software can help organizations, accompanied with varying approaches to ROI justification.  Typical stated benefits include the following:

• Time savings or improved productivity
• Increased connectivity amongst employees and customers
• Improved transparency and reduced reliance on Email
• A clearer understanding and leverage of the social graph
• Other such soft ROI metrics

The good news is the executives that I speak with have heard the E2.0 message loud and clear. The bad news is that many are at a loss when it comes to extrapolating these into solutions that their business units are desperately seeking.

Let’s pick on my favorite: “Time Savings”. The standard justification here is:

Here’s how any smart buyer would respond: “Saving me 4.6 hours of productivity per employee per week means each employee gets to duck out of the office at noon on a Friday. Where’s the tangible benefit? Unless you show me how this leads to needing less unit resources per task and therefore a reduced headcount, I’m not going to see any real savings.” Sorry, that’s a harsh example in these economic times, but you get the point.

Take “increased connectivity” or a better understanding of the social graph of prospects or customers. So what? Unless you illustrate how the increased understanding of the social graph was put through the metrics blender to generate qualified leads based on say, “purchase intent and the ability to spend $X”, that’s just good raw material towards a ROI analysis; Not ROI.

The problem with any of these ROI examples above is that none of them are really what a smart buyer can justify to a senior executive as “return”. What’s worse, software was sold a decade ago in this fashion and the scars from unattained real dollar productivity savings from CRM, Portal and KM implementations are still very visible in the enterprise. To me, all of these ROI examples listed above are extremely important means to an end but not the end itself. We need to show how these drive revenue or save real costs and you’re going to see IT managers demand it more often than not.

Where it really hits home is when you look at the impact of this on the Enterprise 2.0 sales rep that’s out there, hustling. Putting the onus on the customer to figure out credible ROI makes the sale much much harder. You risk stretching out the sales cycle with the addition of more decision makers brought in to help justify value, or unfortunately in a few cases, to ensure adequate CYA on the buyers end.

On to a solution….

Enterprise social software needs to be sold based on one simple end goal: How the income statement will look like before and after the investment.

You might say “Well, that’s hard to do across scores of departments or business units in the typical Fortune 100 customer organization when you’re selling horizontally.” or “We sell collaboration software and the numbers vary significantly by functional group” Here’s one approach:

Don’t rely only on how you can save an average of X dollars across the enterprise. That number is almost certainly going to do grave injustice to illustrating the potential value of your product. Instead, model just 2 representative use cases at narrow functional levels even if your trying to sell an enterprise-wide deployment. Pick one that’s the most stellar and for balance, one that’s closer to the average. Saying for instance “on 5 occasions, our software enabled a sales rep to find a subject matter expert/a white paper/an up sell opportunity, resulting in total sales of $20 million” is much more tangible for an IT director to take to her CFO. Even if the opportunity is a company wide deployment, those signing the checks get a much better view into best and average case outcomes. And it gives your internal champion oodles of confidence and credibility as he socializes these benefits up and down the food chain.

Two things that struck me recently that support this line of thinking:

Last week at the Sales 2.0 conference, it first struck me as odd that Email productivity vendor Xobni was exhibiting. Xobni is a horizontal solution that can work for any employee or individual, regardless of role. I’m guessing here but I bet you Xobni sees a huge opportunity to help Sales folks find LinkedIn and Facebook connections to leads generated by CRM systems that show up in their Inbox. Using that single use case, Xobni stands a much better chance of getting the CFOs attention. Going in with a generic company wide ‘show up and throw up’ value proposition would make for a much more scattered ROI business case, relatively speaking.

Second, noted ZDnet blogger and eternal pragmatist, Dennis Howlett says:

In my argument, breakthrough ROI comes from seeing these technology through the lens of collaboration, which in turn implies process and context. I am mindful that huge amounts of value continue to be locked up in supply chains. AMR quoted a number of $3 trillion in 2005. Has that materially changed? Simply being able to communicate across supply chains in a meaningful manner could do wonders to lubricate those rusty wheels.

The money phrase for me is “…seeing these technology through the lens of collaboration, which in turn implies process and context.” When you can articulate how participatory media supports a specific context (Sales, Pre-Sales Engineering, Supply Chain insight, etc.), you have a much better shot at illustrating and delivering hard savings or increased revenue potential.

Striving for a business case that can affect line items on the income statement is undoubtedly a tall order for Enterprise 2.0 marketeers. But if you aim for the sky, you’ll hit the mountain top.

As Enterprise 2.0 vendors and customers, what other credible justification methodologies are you seeing or employing?

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TechCrunch reports a surge in traffic for LinkedIn thanks to heightened interest in building personal networks as well as job hunting opportunities in this market.

It got me thinking about what “popularity” really means to both web based businesses as well as the enterprise, beyond boasting rights.

For ad based businesses, increased traffic, registration and time on site are obviously good things but how does that correlate with revenue? For LinkedIn, its a clear win since more users means not only more ad revenue but potentially also more paying subscribers.

However, sites that are CPC or performance dependent (meaning they sell ad space to businesses but only make money when there’s click through or a certain predefined action occurs) are facing lower ad spending  so the additional site usage is of tempered value until the market improves. For instance, whilst job sites are seeing a surge in traffic, recruiters that pay their bills via performance ads and placement are inundated with resumes anyway and might need less help finding talent.

When looking at stats for internal Enterprise 2.0 initiatives that boast a surge in registration or other forms of user adoption at the outset, or one year in – buyer beware.  Initial registration metrics mean very little and can be downright deceiving. Why? Because here’s how it generally works in the enterprise:

• A company wide or group wide invite is sent out to check out the new site.
• Users click on a link to proceed into the new wiki, community site, intranet, etc.
• Users are auto registered thanks to LDAP integration so they proceed right in.
• Upon entering, it counts as an additional registered user regardless of whether the users stays, sets up a profile or engages ever again.

Another way that registration gets captured is when user A sends a link to content that happens to be in a E2.0 utility to User B who is not a registered user of the system. By simply clicking on the link and entering to view the content, User B gets added to the list of registered users. Again regardless of whether the user ever comes back or truly utilizes the social space as intended, she contributes to the stated adoption numbers.

Either of these can hardly be called adoption.

It’s heartening to see some headway in this area. Some of the E2.0 solution providers (for instance, Telligent has Harvest) are taking metrics seriously and making it very easy for  their customers to measure the effectiveness of their enterprise 2.0 initiatives, beyond registration and initial engagement. The new crop of E2.0 professional services organizations can provide huge value in this area and I’m excited to see that play out. For starters though, we’re going to see Enterprise 2.0 case studies very soon on ReadWriteWeb, by enterprise social media thought leader and consultant, Susan Scrupski that will undoubtedly shed light on performance of real world enterprise 2.0 initiatives.

Until then, ‘popularity’ can mean many things so dig deeper.