Pretzel Logic – Social and Collaborative Business

Last week I had the privilege of keynoting CeBIT in Hanover. The theme was “Shareconomy“. From the CeBIT website:

“Shareconomy” describes the societal shift from owning to sharing. According to Pörschmann, this is evident in several dimensions: “First, Shareconomy is profoundly influencing enterprise processes, because social media tools will become more and more popular. Second, the Internet is the place for teamwork, both in and outside the company. Partners, consultants, suppliers and customers will be more closely integrated as part of a networked process. The borders separating companies and organizations will become ever more transparent. Therefore, employees and managers must rethink and be prepared to share know-how, contacts and assets.”

My presentation was on the commercial value and benefit of the Shareconomy for the Enterprise. And if you have read this blog before, you know that I took the idea of “Facebooking of the global economy” to task somewhat. -). But in all seriousness, the theme was fantastic and the questions after were very engaging.

When I find a link to all of the keynote presentations I will update it here but I highly recommend giving them a quick look. Really excellent content from a great group of industry doers and thinkers.

Here are my slides on SlideShare:

Almost two and a half years ago in March of 2009, I suggested the following:

“Don’t confuse Enterprise 2.0 with social computing concepts”.

Ignoring the dated terminology for a second, my premise was that social in the enterprise doesn’t mean throwing all sorts of features at the end user in an attempt to get them to emulate some combination of Twitter, Facebook and Wikipedia for the enterprise. Rather, its the decisive use of social and collaborative concepts to get work done.

If there is one single take away from Dreamforce, its that enterprises are systemically closer to this reality than ever before. Not that we needed the declaration of the social enterprise for this to kick off or that Salesforce.com is the only option. We’ve been seeing users of social platforms find their own ways to self organize and improve business activity, but in many cases, in a silo’d fashion and one devoid of context: join a community on your social platform to have un structured conversations on a business activity. Then head over to your CEM/CRM/ERP/Call Center/system to make updates. Sounds fine in theory but the reality is the system of record remained your primary residence and the new collaboration system, your second home that you visit when you have time.  Salesforce.com is now also playing a pivotal role in leading the cut over to contextual collaboration.

Dreamforce conveyed that Salesforce.com has been immersed in twelve months of integration and investment rationalization. Only a few of the product related announcements really blew me away but that’s fine. Putting your investments and technology advancements to work is arguably as important as filling the top of the idea funnel. Even with respect to Chatter, the new functional additions were par for the course stuff. IM and presence, customer and product networks are really not that new and are available in the market. And like every other collaboration software, Chatter has its fair share of ‘can do better’s’. The three-part story on customer, employee and product networks is no doubt a step forward towards illustrating tangible use. But for those of us in the trenches with clients trying to make this work (and I strongly suspect Salesforce.com knows this as Marc Benioff alluded to it in the Q&A session), it takes a lot more of cultural, political and change management will to make this a reality.

But in the spirit of contextual collaboration, the implications of some of the ISV announcements at Dreamforce are just huge and amount to this:

• A social service layer now powers process centric collaboration for critical business processes in the enterprise.
• The Enterprise partner announcements include cloud based leaders who have their sights on the large enterprise market.
• Most of the ISVs offer a forklift solution and can make a go at it, alone. In other words they don’t ‘need’ Salesforce.com to build a successful business. So its a balanced partnership where both sides have as much to gain. If you’ve ever run biz dev, you know that’s generally the most healthy and practical way to truly get results from any tie-up.

Here’s a taste:

• HR: Workday will integrate core HR processes such as approval requests, payroll, budgeting and spend with Chatter.  See Larry Dignan’s post on this. I’ll post separately about Workdays Technology Summit.
• Quote and Proposal, and Marketing Automation: Infor, the third largest ERP vendor after SAP and Oracle will offer a 360-degree view of key processes and data such as invoice, contacts, quotes, shipments, receivables, orders, and RMAs across the enterprise. Chatter will turn these into social objects to foster collaboration.
• Travel and Expense Management: Concur Technologies will pipe both Concur and TripIt data into Chatter for both updates and collaboration/coordination between teams on the same trip. Brian Jackson at PC Advisor has the details.
• Supply Chain: Kenandy, the new startup shepherd by Sandra Kurtzig and backed by Ray Lane, will build a collaborative supply chain on the force.com platform and use Chatter to inject collaboration. I’m really big on this topic. Dean Takahashi at Venture Beat had more and Frank Scavo shares seasoned insight, here.
• Finally, Marc Benioff touched on two announcements that have really big implications on gaining traction. First, the Data Residency Option (DRO) connects the cloud to data centers behind the fire wall. Second, Chatter not only integrates with SharePoint but also allows a feed to even live on MOSS. This hybrid connectivity makes the cloud far more palatable for a lot of companies who want to selectively leverage the cloud. Our work on the ground on blending process and collaboration absolutely confirms this need.

The interesting thing is Salesforce.com calls all of this “Social Enterprise” which can sound just as evangelical and nebulous as a good chunk of enterprise 2.0 and social business fare. But beyond marketing air cover, this is a move towards offering get work done systems that can enhance the quality of repeatable process on one hand and on the other, rescue the wild west world of exception handing that plagues our daily work. Chatter now stands to offer one of the most compelling pathways to 21st century collaboration.

From my vantage point, Salesforce.com will still need to keep an eye on the following:

• Salesforce.com will have to live up to this gigantic endorsement it just received from the ISV community. As these partners work on client deployments, the level of required handholding on getting collaboration right will be significant. As important, there is zero room for error with Chatter’s usability, its ability to scale collaboration (very different from registered users), its functional offering, security, and its filtering capabilities. Failing this, these self sufficient ISVs can easily jump ship (this is the cloud, after all).
• For me, the most critical missing element in the Chatter discussion was that Chatter usage was largely uni directional. In other words, pipe data and events into the stream. Chatter needs to showcase the writing back to systems of record to close the activity loop if it wants to truly become the workbench.  And from a managerial stand point, social analytics need to flow back to BI systems as well.
• Whilst the keynote stage showed forward thinking executives from Burberry and BMC talking about the social enterprise, there are as many CEOs who will find the social enterprise message a tad bit racy. To his credit, Marc Benioff did recognize in later meetings that this can’t be overlooked. The Sales teams will have to make this translation from hope to the needed elbow grease, effectively.
• Last year’s message was of the inspirational kind. This year could have been more of the perspiration variety that illustrates operational and financial results from successfully embracing collaborative ways of work. I wished we had some hard hitting facts on the keynote stage that showed hard results: more wining products in the market, lower support costs, agility, etc.).
• I was really glad to see Radian6 and Jigsaw data inside CRM. Speaking with folks such as Tristan Bishop from Symantec and Chris James from GNC, it was clear that R6 is being used to solve big call center and product development challenges. But the Radian6 magic could have been far more central to responding to the larger challenge of unified customer touch point integration.
• Salesforce.com is certainly not the only one to bring process collaboration to organizations. Jive Software has proven to be a juggernaut in the space and its Appstore offers an ecosystem as well. Yammer has a deal with NetSuite and integrates with Salesforce.com. Newcomer Tibbr from TIBCO offers by-directional interaction between activity streams and ERP Systems that is really promising. And many more, including Oracle who is working on socializing BPM and CMS content. The customer still has choice.

To summarize….

All up – if you’ve read this blog before, you know why this is closer to my strand of collaboration. The giant discuss button that should have always been sandwiched between the submit and cancel buttons in enterprise systems is finally looking like its going to go mainstream. That will have a profound impact on our ability to source the best insight at every stage of a process or activity. And if done right, will significantly improve the accuracy of what we eventually input into our systems of record. Better data quality for those managers relying on inputs and better analytics for those trying to make sense of data to steer the business.

ZDNet’s Dennis Howlett made the money shot on Twitter (presumably after digesting the ERP cloud announcements of the week) which I think encapsulates the opportunity for Salesforce.com:

@dahowlett: Anyone who writes off ANY business app in the cloud as ‘not happening’ is plain <expletive> mad.

To every enterprise CEO and those forward thinking CIO’s, Dreamforce and the associated ISV announcements illustrated a beautiful future that’s not so distant for those organizations who want to play, and is characterized by this:

• All your systems of record apps can in principle live in the cloud, if it makes sense for your business.
• The pipes are being laid to enable process and decisive collaboration in cloud based systems from the get go. So if employees are getting trained on Infor or Workday when their CIO makes the switch, collaboration know-how on how to improve business activity will be an integrated part of this cut over.
• With native BRO and SharePoint connectors and a significant investment in systems integrator Appirio, a hybrid connectivity world is most certainly needed and available to hand hold those not fully converted.
• And finally, that competitive advantage will not come from customizing commodity business processes apps or from, in my mind, questionable claims of better economics from cloud based solutions. Rather, it will come from superior user experiences, a balance between structured and collaborative work, device ubiquity, and significantly better speed of business execution that cloud based systems are extremely well positioned to accommodate.

Comments rolling in on Google Plus as well, here.

Supply Chain efficiency is a big big deal. More over, this area of the enterprise technology stack and associated strategy has seen little to no innovation for well over a decade. Years ago, Dennis Howlett wrote:

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.

Back in the summer of 2009 I wrote about taming the supply chain beast with Enterprise 2.0 approaches and technology. On the value of connecting suppliers to not just each other and to the procurement department, but to other organizational facets generally quarantined from suppliers, I wrote:

First, no one knows the true power, limitations and opportunities for each component of a product better than the very folks who build them. Second, component manufacturing is largely a commodity business.  As a supplier, I need to differentiate myself from competitors who are waiting for me to falter or cut me on price. I need to be a strategic partner to be somewhat indispensible. Social Software can open up the lines of interaction beyond R&D, Procurement and Product Development, allowing suppliers to learn, first hand,  any pain felt by the end customer. Or help marketing really understand the deep competencies of each component of the end product. Or provide new insight to R&D on early technology innovation at the component level. And on and on.

That’s purpose built collaboration (a.k.a business case) with dead clear incentives for suppliers to participate (a.k.a adoption) and play a role in the success of an end product in the market place.

It took a while but I’m thrilled that for the first time were going to see a supply chain case study at the Enterprise 2.0 conference, next week. Tony Martins, VP of Supply Chain at TEVA Pharmaceutical will talk about how TEVA is leveraging collaboration to improve supply chain performance. Tony is definitely is one of the pioneers in re-shaping what supply chain efficiency can mean.

The session description is here:

———-

Thanks to decades of supply chain optimization solutions, today’s leading organizations have mature transaction-oriented supply chain designs.
However, managers spend over half of their time dealing with unexpected events that can’t be addressed with structured processes. To maintain a competitive edge, companies need to embrace new ways that enable spontaneous association. Social Enterprise and Open Collaboration provides a more effective way to address the volatile world and gain significant improvement in operational efficiencies.

———–

Tony will present a case study at 3:45 on Wednesday the 22nd of June followed by a Q&A session. Tony will also share the keynote stage with Tom Kelly of Moxie Software on Wednesday at 9am.

If you’re looking to frame the business value of social and collaborative business to line of business leaders or to IT, this session is sure to provide you with the needed ammunition to make your case.

ZDNet Blogger and eternal pragmatist, Dennis Howlett is at it again. As a follow up to his original “Enterprise 2.0: What a Crock” post and an attempt by a panel at the Enterprise 2.0 conference to respond to his contention, he validates his original argument, saying:

What I find staggering is that despite the panel’s general acknowledgment that ‘it is early days’ they have no clear answers for solving the problems that Enterprise 2.0 evokes. If this is the best that industry can put forward then forget it. There are far bigger problems to solve like correctly managing the workforce in times of economic crisis, smoothing out lumpy supply chains, beating down on data center costs or just getting ERP to deliver the benefits that were intended and which have consumed billions of IT spend dollars.

Given how the discussion on Enterprise 2.0 plays out on the blogosphere as well as at conferences, you really can’t objectively argue with this statement. In fact, Ill go further: The ‘Its the early days’ argument just doesn’t stand up. No different from the plethora of consumer services that we all use (Twitter et al), first impressions are lasting impressions in the enterprise setting as well. As participants, we make up our minds very early about the usefulness of a program, technology or service. And so if intent, incentive, context and usability are not hard coded into the effort from the get go, its never going to have the required street credibility, no matter how much time and money you throw at adoption.

And if you can’t shake fact that Dennis often sports an ERP-colored lens, a fresh eye provided by Venturebeat reporter Anthony Ha also results in a similar conclusion.

The Colossal Enterprise 2.0 Short Sell

The problem is that, in the context of E2.0, there’s little discussion around performance objectives where social computing constructs and technologies can move the needle on discrete but large scale business solutions. Equally bad is that there’s little thought and discussion around the optimal solutions architecture and combination of process + social that can solve large scale problems that keeps the c-suite awake at night. Instead, the discussion is dominated by suites vs. platform debates, more technical gobbldygook (to an executive at least) about feature superiority, endless back-to-the-drawing-board definition debates, and post deployment adoption difficulties that in actuality might not have been so bad had the requisite execution planning been considered in the first place. I’m not pointing fingers, by the way. I also engage in some of these when prodded.

In actuality, Dennis’ assessment is not entirely correct. It’s just that the Enterprise 2.0 airwaves (and conferences) are subsumed by weak business benefit alignment exacerbated by tactical discussion around ‘strategy’ (NOT) that centers around suite implementation, why no one stuck around after launch, and how email sucks.  All that achieves is driving the promise of social computing constructs further and further down the food chain – to a place that few executives really care to hang out at. And the process performance practitioners and pundits have a field day with all of this.

The Beef is, In Fact, Here

My colleague Oliver Marks (who also takes on this issue) and I co-chaired the strategy and execution planning track (review by Ben Kepes | CloudAve) at the Enterprise 2.0 conference where we ran a 3 hour workshop on how to get executives to understand the business value of social computing in the context of performance goals that keep them up at night. Following that we ran sessions that addressed delivering tangible value in the context of known functions and processes in the enterprise: purpose driven collaboration, reducing customer support costs via social concepts and improving product innovation via social concepts. No tools, no features and frankly no adoption. Just performance acceleration via strategic process and performance alignment – topics that are central to the consulting work that Oliver and I are involved in and frankly those that need to dominate the discussion around Enterprise 2.0 (detailed below).

How would the skeptics respond if they heard GetSatisfaction CEO Wendy Lea explain how Nike centrally manages its offsite community discussions for a whopping $8,000/ year? Or Altimeter Group Partner, R Ray Wang’s estimate that social computing concepts, when injected into process, actually reduces costs 2 to 4 X times over those very ERP-esq call center/CRM technology driven programs that Dennis and other skeptics are all too familiar with? Contrast that with the fact that traditional CRM systems on their own are often nothing more than glorified reporting systems that sales reps are mandated to use, in exchange for their commission check. Building on Rays assertion, now, with the strategic use of social computing concepts and technologies in context, these new approaches help nip customer support problems early and at a significantly reduced cost. As important, they inject qualified leads into traditional CRM systems finally giving them a real performance acceleration purpose, beyond bean counting by a Sales Operations Manager. That’s process + social, exponentially improving performance.

Want more? Take the case of how an extremely conservative organization such as Chevron  significant improved safety risk and improved performance:

• Chevron used social computing (in this case to generate ideas) constructs and technologies to find new applications for patented processes created at one of its oil refineries. These processes, powered by ERP inventory management as well as other systems that manage chemical mixes, fume levels and repair management were limited to one process and one physical location. Idea management via social software enabled Chevron to find and select 6 out of 115 re-application candidates globally where existing patents were reused or extended as new patents, to also improve similar processes on aboard ships, offshore refineries, energy exploration efforts and other “dangerous monitoring environments”. Federated risk management programs and more patents – thanks to the power of social computing that brought the right minds together to ideate and collaborate.
• Second, reducing safety risks at residential and commercial communities that sit above oil pipelines is obviously critical to Chevron. They used social computing constructs  to get its IT department, ERP inventory management provider and GPS system vendor to generate ideas and to collaborate on a new approach to removing process breaks and paper based processes that impede timely community notification when pipelines break. Social computing was central to this effort to speed up communication to folks that lived close to pipelines and to reduce the time from problem notification to repair.

In all of these cases, data, and intelligence normally buried in closed process centric activity and systems were pushed into people centric social realms for improvement, only then to be put back into process systems in their newer highly optimized forms. If these are not clear examples of how process and so called enterprise 2.0 social concepts came to together to accelerate performance, I don’t know what is. And I’m willing to bet that if the naysayers saw more of these examples, they would pontificate based on a different set of facts.

I suspect this is what SAP EVP, Zia Yusuf might be thinking when he tweeted

@dahowlett blog and wikis will not drive value alone, I think the trick here is to connect "crowd insight" directly into specific bizprocess

…and what ex-SAPer and author of Driven to Perform, Nenshad Bardolliwala credibly elaborates on in his architectural illustration of where social computing can co-exist traditional process based activity.

Whilst we are on the subject of SAP, think those ERP laden processes are all that?  Lets see how Tony Hsieh feels about not using community constructs during, say, the order to cash (and refund) process to provide the same insane level of customer service that Zappos offers during the pre sales process. Sure, you need to have compliance and governance covered, but social constructs injected strategically drastically improves the quality of output in a world where customer centricity is inevitability becoming front and center.

But truthfully, in the defense of the Process advocates, what else can they benchmark against? Certainly not the prevalent E2.0 discourse that’s focused on unseating Knowledge Management, Email, Intranets and Portals to drive nebulous benefits such as productivity, time savings, and worse, the rudderless catch all – workplace transformation.  All in all, these older technologies and programs have shown little to no large scale performance acceleration and the C-Suite is acutely aware of that. If for nothing else, at least SAP helps to keep the SEC, Justice System, FDA and IRS off your back.

The Moment of Truth

Don’t get me wrong, there’s a lot of real work required in the area of adoption that dominates the airwaves and I don’t mean to discount these efforts of some very hard working folks. And even ERP, CRM etc have their own share of usage problems, giving birth to a sizable industry that just focuses just on ERP/CRM training to drive proper adoption. The difference is that intent and the business case for using these technologies are dead clear. Something that’s just missing in the Enterprise 2.0 discussion and stated promise.

The moment of truth is about to hit this category over the next 12 months where executives are going to ask the hard questions about the applicability of these constructs and technologies to performance acceleration and to alignment with discrete business goals. Anything but a succinct answer that involves the right balance social + process and the estimated switching cost will result in E2.0 being tragically (and wrongly) regarded as yet another example of Micky Mouse technology that belongs on a server under someone desk, if at all.

The choice is clear.

Update: More from Dennis on ZDNet commenting on this and some other very good posts on this topic.

At the Enterprise 2.0 conference last month, I met with a few interesting companies that I wasn’t familiar with, prior to the event. I thought I was “plugged in”. Clearly, not enough. The next few posts uncover how some of these companies hope to move the needle on Enterprise 2.0 enablement. First up: Supply Chain Management.

McLean, VA based SIM (Supplier Information Mgmt) provider, Rollstream was one of the more impressive but lesser-known-companies (to me) that I had the chance to meet with. If you read this blog often, you’ll get why I instantly liked their business. RollStream fixes specific problems – inefficiencies in the supply chain via Private Supplier Social Networks. Counting well known companies such as Walgreens, Owens & Minor, Johnson & Johnson and Tesco as customers, their SaaS solution services the partner relationship lifecycle for retailers, manufacturers and distributors. Business activity-focused capabilities cover partner on-boarding, compliance, performance management and dispute resolution.

Founder Nick Parnaby and CEO Kristin Muhlner discussed existing bottlenecks and cliffs in the supply chain mgmt process and how Rollstream hopes to open up the lines of communication, add visibility, and remove unnecessary interaction toll gates enforced by decades old SCM and ERP influenced work models. Also, today’s resource heavy supply chain management interaction models force relationship managers to pick specific partners to deal with. RollStream offers social software to reduce manual intervention during on-boarding and to help organizations more easily identify high performing partners in the network.

Re-casting the supplier relationship via Enterprise 2.0 enablement.

RollStream considers its’ primary value to be in the area of efficient partner management. They know their business of course and it’s early pickings, but to me, one of the biggest opportunities to enterprises using such social computing technology is be able to to pry open the gates that lock out supply chain access to core processes such as product management, R&D, marketing, end customer support, etc. And conversely – giving these business units access to knowledgeable supply chain partners as well. That’s where SIM providers can really help.

Why? First, no one knows the true power, limitations and opportunities for each component of a product better than the very folks who build them. Second, component manufacturing is largely a commodity business.  As a supplier, I need to differentiate myself from competitors who are waiting for me to falter or cut me on price. I need to be a strategic partner to be somewhat indispensible. Social Software can open up the lines of interaction beyond R&D, Procurement and Product Development, allowing suppliers to learn, first hand,  any pain felt by the end customer. Or help marketing really understand the deep competencies of each component of the end product. Or provide new insight to R&D on early technology innovation at the component level. And on and on.

That’s purpose built collaboration (a.k.a business case) with dead clear incentives for suppliers to participate (a.k.a adoption) and play a role in the success of an end product in the market place.

There’s sizable opportunity here, however, solutions such as RollStream may not be for everyone. And I suspect that gaining sustainable adoption across hundreds of suppliers for each customer can sometimes be culturally and programmatically daunting.  I’ve seen one too many partner extranets that eventually turned into ghost towns thanks to re-orgs, shifting priorities and erratic shepherding.

All that said, the use of collaborative software in this context can bring massive, measurable business benefit if its treated as a strategic initiative by enterprises. Pulling in a snippet from an older post….

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.

Have other ideas about how an Enterprise 2.0 design can improve supply chain processes? Chime in.