Pretzel Logic – Enterprise 2.0

The innovation zealot in me felt instant disappointment today upon reading that Google Wave is no longer. The official word from Google:

The use cases we’ve seen show the power of this technology: sharing images and other media in real time; improving spell-checking by understanding not just an individual word, but also the context of each word; and enabling third-party developers to build new tools like consumer gadgets for travel, or robots to check code.

But despite these wins, and numerous loyal fans, Wave has not seen the user adoption we would have liked. We don’t plan to continue developing Wave as a standalone product, but we will maintain the site at least through the end of the year and extend the technology for use in other Google projects.

One one hand, its startling when a behemoth such as Google cannot use its deep tentacles in the developer and user community to shepherd a product to critical mass. That’s a lesson for many others that think they can win just on sheer scale and marketing wallet. It doesn’t matter if you are a Cisco or Microsoft –  today’s end user in the enterprise has more ability to vote with their clicks than they ever did.

Mike Arrington at TechCrunch suspects: “Maybe it was just ahead of its time. Or maybe there were just too many features to ever allow it to be defined properly.” That’s definitely part of it – I personally felt there was way too much happening in Wave to encourage a wholesale leap off of the email cliff.

But there’s a more important issue at play here. My sense is that the primary culprit here is lack of context.  No matter how sexy, the use case for silo’ed, dumb “un-smart” collaboration still generally goes like this:

• Think up/get notified of a process problem or event
• Remember that a bunch of tools and metaphors (email, phone, the conf room or water cooler, software) exists that can help decision facilitation and brainstorming
• Group/find the right people to collaborate
• Pick a collaboration metaphor that works for everyone
• Solve the problem
• Go back to the system of record or powers that be (a boss, a customer, a supplier etc), to deliver the outcomes.

That’s a lot of steps and frankly a lot to expect from the average business user. If you want to hear more voices on this, the comments on Lifehacker are especially enlightening. And there’s parallels to be drawn from the consumer world as well: Think about the scores of of tools and nifty web apps introduced by Robert Scoble. We rush to try them, fall in love instantly, and then proceed to forget about them, pronto. Why? Because most of them require stepping out of our daily routines or are predicated on pre built, evergreen network effects to see value.

This is a conversation I’ve had with more vendors and customers than I care to remember but its working and many of them are understanding the value of associating collaboration with performance drivers (more in a subsequent post). Organizations still need to understand how to design work processes that blend optimal process and collaboration but its a hell of a lot easier when the software choose to plays nice.

On the other hand, far too many product teams continue to pile on whiz-bang collaboration features when end users are still struggling to understand the basic applicability of these new tools to meeting their performance requirements in a better/faster/simpler way. Organizations on the other hand often have a huge gap between declaring big picture strategic collaborative intent and tool selection. It’s in that gap where the “why” and “how” gets figured out and where the magic truly happens.  Putting the onus on the user to decipher when to use enterprise 2.0 or collaboration will almost never lead to business results.

You have to give Google credit for trying and failing fast though. I had high hopes. The good news is that Google promises to inject some of Waves core technology into its other products. That hopefully will provide the necessary context that will celebrate some of the most amazing innovation that the core Wave team developed.

I’ve been buying computing hardware as a business customer from Dell for over 7 years now. All of our infrastructure technology as well as desktop equipment almost exclusively came from them. Servers, Printers, Laptops etc.

My experience, averaged out over this period with Dell has been a net positive. Their stuff works, the service and follow up has generally been good. A few issues such as a customer satisfaction calls at 6:30am (!?!), too many requests for equipment identification numbers after I’ve entered it into the touch tone system as I get volleyed from support rep to support rep. I can live with some of this as we don’t have reasons to call that often. And as a person, I’m generally not one to dwell unless you really get my goat.

Then a serious problem hit a few days ago where I really needed Dell to come through for me. My under-warranty hard drive was about to fail which would mean all my purchased software was about to be wiped out. So I asked Dell for replacement copies of software and the “its Microsoft’s problem” syndrome kicked in. So I went back and forth between these two ‘partners’ who’s reps had expert reasons for why the problem wasn’t theirs to solve.

During this, all I could think of is that the Dell has all the data concerning my purchase and loyalty history for seven straight years and yet, they wouldn’t budge to make this as simple as possible for me. When I mentioned to the these vendors that I have registered the software when I made the purchase (incase, the issue here was verification that I was the lawful owner), I was told, this information is captured only for future marketing purposes and that  customer support doesn’t get access to this data. Wait, my taking the time to register my software is to serve you and not me?

Please note my first comment: My experience with Dell is a net positive in spite of this. And as much as its unpopular in many circles to say you like Microsoft products, except for Vista, I really do like their stuff, personally. So this is not about these providers in particular.

The point is, CRM is a mess. Internal departments are not sharing my customer profile to appreciate my historical allegiance to the organization. OEM partners who had to collaborate to have the slightest chance at winning my business are not sharing data amongst themselves. Even when they know that keeping me as a long term customer is predicated on them both serving me equally well. As organizations, we just don’t have a handle on how to use what we already know about the customer.

As tempting it is to add to the chorus of many altruistic “CRM got it all wrong and Social CRM is here to reinvent customer interaction” or for that matter, “SCRM is strategy and not technology” (is it? or is it an execution path to established business strategy?) blog posts, Social CRM is going to accentuate the problems of CRM. The thing with SocialCRM is that it adds more customer data to CRM records when many organizations have not learnt how to act on existing data. Whist a quick look at my Twitter usage can give Dell an idea of my profile, what good will that do if organizations are not going to act on hard data they have today: How much I’ve spent with them over the years, my active registrations of software I’ve purchased, my loyalty based on the fact that I religiously buy new equipment from them every year.

So whilst we look at newly minted Gartner Magic Quadrants on Social CRM providers (Jive Software offers a copy here with registration), organizations need to understand how much house cleaning they need to do first. And unless that happens, SocialCRM only gives organizations a data migraine – more info that they don’t know what to do with.

Paul Greenberg, who sits at the pinnacle of the ‘whose who’ digerati when it comes to CRM and Social CRM has an excellent write up today about Gartner’s Magic Quadrant and the Gartner Event on Social CRM. A central point of this post is that whilst community and engagement are important and vendors to date have made solid progress, Social CRM integration with CRM to truly improve customer relationships is critical. And that nut has not been cracked yet. When the report was released a few days ago, I said to Mitch Lieberman, another SCRM thought leader on twitter:

“@mjayliebs those in the Gartner MQ #SCRM leader quadrant better have figured out lead gen in a meaningful, budget shifting way. think not”

My larger point (140 characters don’t often lend well to making larger points) was that this needs to move from community to supporting business tasks and an overall CRM initiative whether that is lead gen, or in my case, customer service and the like. In the case of my issue with Dell, everyone needed access to the same hard data (my company profile, purchase history), my probability of remaining a Dell/Microsoft customer based on my social graph , my in-warranty status on hardware and all OEM software (see that I was the legitimate owner of the software and simply wanted a replacement copy and only thanks to an in warranty failed hard drive).

We tend to think that using social media monitoring and listening systems reduces noise and lets us focus on things that matter in our customer relationships. I respectfully disagree. Until its surgically helping you execute business and process objectives more effectively, its still noise. Just squeaky clean. I asked Esteban Kolsky, a respected CRM analyst to chime in:

We have seen the positive effects that monitoring social media and acting on it in real time can have in an organization.  Even Dell, mentioned in this example, managed to earn some money in social media be leveraging real-time, social marketing.  However, that is not SCRM.  Social CRM is where the social data and the transactional data are analyzed together to create deeper insights that ever before.  Using Social data we can amplify what we know about customers by adding a sentimental, emotional layer to what we know — and that helps smart companies drive sales cycles and create better revenue models.  Are we there yet? not even close, we first need to figure out a way to integrate the socially-collected data with stored transactional data, then how to create better insights, and finally how to to act on them. Yes, it is a lot of work — but the rewards far surpass any amount of work you have to put into it.

Failing house cleaning on existing CRM design and decisive use of Social data as part of that revamp, we’ll just have glorified community forums that no doubt look far more sexier than forums of yore, but don’t mean much when it comes to tacking large scale operating and growth objectives of organizations.

The flagship Enterprise 2.0 Conference in Boston, Massachusetts ended last week. I’m going to pen two posts to cover my thoughts on the achievements and challenges in the Enterprise 2.0 sector based on observations at the conference. This post covers the big (positive) shifts and the conference itself.

A quick disclaimer first: I’m on the advisory board of the Enterprise 2.0 conference.

The conference attracted a gaggle of practitioners, leading enterprise analysts and bloggers, and vendors who opined about latest techniques in collaborative approaches and technologies to improve engagement and relationships between employees, partners and customers.

(Image: JP Rangaswami / Credit: Alex Dunne)

For my part, along with colleague Oliver Marks, I co-chair the strategy and execution planning track which , like our work, is focused on identifying where collaborative approaches can accelerate workplace and process performance and on how to plan, sell, design and execute programs.

Every year the conference pushes management and engagement boundaries by introducing newer concepts, often in the face of lava-like progress on the ground. In its 4th year, my sense is that we can definitively see a tiny white light at the end of the tunnel with respect to the ultimate stamp of legitimacy – the eventual emergence of a capital and operational budget line item to build and support 21st century collaborative enterprises.

Thanks to the work of some very dedicated practitioners (there’s scores more), there’s no  doubt that the Enterprise 2.0 case studies of tomorrow are now being written. It’s a long road but these will eventually showcase more agile and fluid collaborative approaches that leverage existing process and collaborative systems and initiatives which will surface the best minds across the enterprise ecosystem to solve tough business challenges and enable effective competition.

A few large themes, and in particular order……

The Tide’s About to Rise

Tools won’t drive but they will enable. The entry of established vendors and a maturation of pure play positioning signals a decisive shift from feel-good to problem solving and growth focus.

• First, the traditional pillars of the Enterprise Software business attended and showed off their Enterprise 2.0 wares, en masse. We had platform offerings and extensions from the likes of SAP (Streamwork and Elements), Cisco (Quad), Microsoft (SharePoint 2010) and Novell (Pulse) and IBM (Lotus Connections).
• Second, proven vertical specialists such as Saba Software (Saba Live) and Success Factors (Cubetree) talked about collaborative offerings weaved into traditional talent management and workplace performance constructs.
• Third, the case for connected threads between employees, partners and customers gets stronger. Vendors such as Jive Software, Telligent and BlueKiwi offer strong platforms for customers ready to tackle multi-pronged solutions, whole hog.
• Fourth, a few horizontal platform providers woke up to the fact that they need to shove a foot into the door that leads to the process side of the house if they want to be taken seriously. Beyond experimental or tactical applications of collaborative constructs that are often void of purpose, they are moving from carpet bombing Enterprise 2.0 to launching surgical strikes. PBworks for instance announced strong collaborative wrappers to traditional CRM processes. CrowdCast latched on its predictive smarts to a known problem at every enterprise – how to turn today’s often dormant, “for the executive-brass-only” business intelligence capabilities into for-the-masses decision facilitation that helps any employee estimate the consequences of their decisions before they take action. And Socialtext introduced a beta release of what looked to be a social middleware layer that adds engagement to process.
• Fifth, those that are unapologetic about their approach to doing one thing and one thing only – simpler and better than anyone else, stuck to their story. Providers such as Socialcast and ThougtFarmer. The former continues to proudly call itself a light weight activity stream that adds much needed engagement to large, complex environments. The latter continues to innovate to gives you a far better intranet that replaces your asynchronous portal design, circa 1991.

Content, engagement and process – all in context. From a vendor offering perspective, that’s a first and must be celebrated.

Closely tied to this is another trend. Seasoned enterprise sales and marketing executives are being successfully lured to Enterprise 2.0 vendors. I spent a lot of time with them and one thing is clear: They are not adopting the party line. Rather they are channeling the passion and energy of cause driven entrepreneurs towards practical value propositions that customers will possibly care about. 

The reason I’ve led with vendor innovation here is that historically speaking, there’s a significant, practical take away from the entry of established players. The ramifications of platform and vertical process specialists betting on collaborative enterprises, means this: We’re about to see hundreds of millions of marketing dollars put to work to drive awareness and education around Enterprise 2.0, Social, Collaborative (or your jargon of fancy) forms of engagement in the workplace. Add to that, the network effect about to ensue when new and existing ecosystems around these vendors (Strategy Consultants, SI’s, ISVs, Resellers) start to articulate solutions to business problems for their customers based on these innovations.

This rising tide will lift all boats and likely cement a stable foothold for Enterprise 2.0 in the application stack (a big caveat to this that I will cover in a subsequent post). The technology may come from your process vendor, or from a pure play. Regardless the programmatic spend to realize business value will need its own budget.

None of this means that customers will be guaranteed performance acceleration or that smaller vendors will achieve instant stardom. This level of exposure may well highlight some of the rudderless propositions afforded around the altruistic value of E 2.0 that seasoned customer executives will instantly balk at. Dennis Howlett covers this with great insight on his ZDNet blog. And I’ve written before about the risk of the E2.0 marketplace facing the same fate as portal vendors. That continues to be a genuine possibility.

But one thing is certain: the Enterprise 2.0 message will now have far, far deeper tentacles into mahogany row. That’s good for big platform players as well as their pure play counterparts that don’t have the budgets to educate as many buyers as they would like to, on the value and promise of Enterprise 2.0. Many large buyers don’t allow single source deals and so, RFPs will often have to cast a wider net and as a consequence, expose pure play innovation in the marketplace

Distributed Customer Stories Beyond the Obvious

Most of the case studies to date have been skewed towards either Hi-Tech or Professional Services (consultants, agencies, etc) organizations. What’s unsettling about this to me is that neither are strong sample sets to extrapolate a credible assessment of wide scale acceptance across other industry sectors. I’m not in any way suggesting that it’s been easy going for orgs in hi-tech or services, but relatively speaking, hi-tech is traditionally an early adopter of technology enabled innovation and so its natural that a lot of Silicon Valley-esque organizations have jumped in first. In the case of Professional Services, knowledge and expertise is itself the end product. And so making the case that finding better ways to surface and reuse knowledge can more directly improve margins, if done correctly. Two very strong drivers to give E2.0 a shot. Again, some of these are my customers, and at others, I personally know internal champions who are banging their heads against the wall with adoption and cultural issues.

All that said, relatively speaking, what we’ve been missing all along are strong, tangible case studies from other sectors that are not early adopters or don’t naturally see a direct link to the bottom line. Many of these are extremely successful organizations in their markets but from a collaboration standpoint, some are still evaluating SharePoint 2007.  But that’s begun to change. We see it in our work and we finally saw a respectable number of case studies and customer stories from companies in other sections. Examples are YUM! Brands (restaurants), Harvard Business Review (publishing), NASA (government), Thomson Reuters (financial media), Vanguard (financial services) and Abbot Labs (life sciences) that made great presentations on their strategic uptake on open, collaborative constructs to drive performance.

Articulating the Business Case

A seemingly less critical point but one that I think is extremely important. This time around, customers were far more articulate when describing the inefficiency or limitations of existing processes and transactive designs before jumping into the promise of collaborative constructs. Enterprise 2.0 is often labeled as a solution looking for a problem and for good reason. In two customer panels that I moderated on Customer Networks and HR and Workplace performance, practitioners stated succinct, large scale business inefficiencies and competitive and market economics factors that have compelled their organizations to consider new ways of conducting business. These practitioners have been rooted in a structured process laden world over the last decade or two and spoke with authority when it comes to articulating what’s wrong first before gushing at what can be so right with Enterprise 2.0.

Where some organizations/departments have the luxury of being led by the likes of John Chambers (Cisco), Lem Lasher (CSC) and Brad Smith (Intuit) who naturally consider collaborative enterprises to be a necessarily utility to compete effectively and often without ROI prerequisites, most look for far stronger, tangible business case justifications from the get go. I’ve seen my customers in both camps, but there’s more customers who look for a strong articulation of what’s wrong with how things are done today and a seasoned justification to try a new approach. And we saw this maturity of critical business justification at least to the extent that an executive can’t afford to not listen to cause and effect arguments. That’s a huge step forward. 

The Definitive Watering Hole for the 21st Century Enterprise

The point that often gets lost in the midst of constructive criticism is that we have a strong physical platform with the Enterprise 2.0 conference to compliment digital and often disconnected conversations on Twitter and the blogs to help each other. As important, the conference offers a vehicle for attendees to share suggestions and for organizers to respond with solutions the next time around. There’s always a yearning from attendees to see more case studies, to see less vendors and consultants on stage and I think that’s legitimate.

Honestly, I don’t personally have a categorical objection to vendors presenting on the keynote stage. The reality is that vendors are no different from the rest of us in one particular aspect: They also share a passion and vision for a better way to conduct business and are putting their money where their mouth is, every day. Unfortunately one too many vendor keynote speakers launched demos where they should have taken the allocated 20 minutes to share industry vision and big market and customer problems that need tackling. It’s implied that their offerings address these challenges. What we largely got was 1.0 marketing to a 2.0 crowd. A big opportunity was lost to level with the rest of the community by offering new pathways to value and by inspiring the collective. These were in sharp contrast to keynotes from the likes of JP Rangaswami, Professor Andrew McAfee, Vinnie Mirchandani and others.

But we also saw more senior executives and mangers from the buy side present or join panels, this time around. I evaluated last year’s event by looking at the degree of practitioner focus and gave it a thumbs up. This year, the conference offered an all day Adoption track chaired by the able Susan Scrupski that gave practitioners significant leeway to design their own day long workshop, panels and sessions. So the conference built on last years practitioner centric efforts.

The conference is now in the early stages of catering to the entire Enterprise 2.0 life cycle: Credibly articulating the business case for layering in a collaborative backbone to enrichen process, understanding the tools, applications and platforms, getting adoption and tactical planning right, and holistically looking at interaction between customers and employees. With the help of a strong cadre of instructors and track chairs including Mike Gotta, Irwin Lazar, Tony Byrne, Oliver Marks, Susan Scrupski, Rachel Happe , Dion Hinchcliffe, Alistair Croll and Larry Cannell.

Whilst still consultant/analyst heavy, the conference is also become a clearing house for not only customer success stories but about the journey, as was made evident by over 30 customer stories presented on the keynote stage, in panels as well as in session talks.  Kudos to TechWeb and in particular the management, sales, marketing and operational teams for their flawless organization of the event itself.

Some Must Read Posts on the Event

There’s a lot of blog posts and media coverage offering up excellent opinion on the conference and state of Enterprise 2.0 from the likes of Oliver Marks, Thomas Vander Wal, Bertrand Duperrin and Nigel Fenwick.  I’m still digesting and will expand on these in my next post. But if your looking for the best blow by blow coverage, that comes from V Mary Abraham, Bill Ives and Patti Anklam. (please comment if I missed anyone and I’ll update)

What Comes Next:

It wasn’t all peachy. In a subsequent post, I’ll try and cover some of the following items that I suggest we deal with, pronto.

• We’re still lacking adequate operational metrics alignment to be taken more seriously.
• Addressing cultural nuances is certainly an important success factor. But we’re hiding behind cultural arguments as the universal culprit, far more than we rightfully should.
• The millennial discussion is mostly without substantial evidence and downright asinine.
• There’s a giant disconnect between today’s customer expectations and the ability of employees to fulfill these expectations. I covered this in my keynote at the International Forum in Milan week before last, and Ill try to add insights from others, based on my discussions.
• Unnecessary complexity added to design frameworks and to toolsets which, will only overwhelm potential customers.

On a personal note, this is the one event in the year that I look forward to most. And it did not disappoint. I chatted with lots of old pals into the wee hours of the morning, and had the good fortune to meet people who visit this blog and to thank them for taking the time to read and engage. Some in the community use this platform to genuinely bond once a year and to graciously share experiences, lessons learned and to celebrate the work of everyone involved. And you can’t put a price on that.

I almost missed 2 very important social events when I was in Bombay earlier this year. One of these with my childhood pals that I don’t get to meet unless I’m visiting. Boy would that have sucked.

Why? Because I don’t carry a Blackberry. And by extension, don’t use BBM – RIMs Instant Messaging Service for its Blackberry Phones. (great primer here on BBM, btw)

What is BBM?

For those of you (like me) who live on the iPhone and are not BBM users, its Blackberry’s IM client that lets you engage with other BBM users on Blackberry devices. You can friend one another, create groups and share pictures and videos. There’s millions out there that don’t exchange Skype and Gtalk handles. They exchange their BBM handle.

What gained traction as a way to bypass costly SMS, BBM is now the preferred mode of text based communications amongst GenY-ers, team members and groups of friends. That’s how you arrange drinks at the local pub, partake in American Idol gossip and collaborate with teams at work. Think of it as Twitter with group functionality + a (very) light weight Yammer / SocialCast for business interaction. But all mobile, no character limits,  always on and in real time.

Here’s a short Video

Apple recently filed a patent for messaging called iGroup that enables Apple to command control over specific social networking metaphors. Here’s a short summary from the AppleBlog:

An interesting patent of Apple’s relating to a social networking app surfaced recently. Dubbed iGroups, the app aims to solve the pitfalls of traditional social networks, like Facebook, that require users be a member before being able to participate. Instead, iGroups creates a virtual social network based on proximity.

The thing is while Apple’s focus, for the most part, has been on hardware + data / applications RIM is quietly giving the rest of the world hardware + participation.

Threat: Mobile only folks

Granted that the Blackberry is no iPhone when it comes to overall experience but Apple faces the threat of being beaten at a game it invented: couple hardware with seriously useful software software to create simple, unmatched experiences.

Whilst the webs proliferation in the west started on a PC, there’s tens of millions of people out there outside the western world that skipped the web on a PC for the most part and went straight to a phone. Wireless access in these highly mobile parts of the world meant get a more powerful smart phone as opposed to a PC. These folks are not tethered to iTunes on their laptops, and use SMS as a primary form of text based interaction. Facebook, if at all, is experienced over the mobile phone but the primary interaction is conversations (as opposed to data access and even sharing). Conversations around where to hang out tonight, or debriefing after a sales pitch – all done via BBM and on their mobile device.

This group of people also have little appreciation for the App Store and all that it has to offer. Communicating with people they know takes precedence over consuming data and applications on a mobile device. And so iPhone apps that the rest of us are so very mesmerized by take a back seat. The network wins.

Apple needs to stem this land grab and stem it fast. Communication networks built off of Blackberry to Blackberry interaction are super sticky – as sticky as the networks many of us have created on Facebook. And that’s hard to replicate.

Opportunity: The gaping hole that Facebook leaves

Many digital socializers, especially GenY-ers using the desktop web are either just baffled by Facebooks shifting privacy policies, get disapproving stares at the office when they fire up Facebook or couldn’t turn down mom when she be-friended them.  Also there’s nothing instant about Facebook. Its far too asynchronous, party because the metaphor still very much looks like this: post > wait > receive > wait > react. And its not set up to create quick groups that can converse on a social or business topic and disband.  That’s the missing metaphor that represents a very common interaction amongst a lot of people. Whilst Twitter works well to consume broadcast from magazines and Aston Kutcher, it remains gobbldygook for those newbies looking to converse. BBM in contrast, has this interaction metaphor locked up, for now.

Business Implications

Most of us use one mobile device for both personal and business communication and that’s a Blackberry for many many users. Whilst a plethora of Enterprise microblogging vendors duke it out to become the ‘engagement system of record’ with features on their desktop, web based apps and lighter weight mobile siblings, BBM may well be the most convenient and killer Enterprise 2.0 app for the mobile masses. Ofcourse there’s a lot more to business collaboration than engagement, but for many, this might be just the missing component that compliments their existing process and document collaboration investments.

Enterprises don’t buy what’s best. They buy what’s good enough. BBM is a perfect example of light weight collaboration that’s always on, always with you, designed for mobile, wired into your company contacts folder, and with groups functionality to host private conversations.

Ofcourse, Apple is Apple and its highly likely that when they do come out with an alternative to BBM it will re-define messaging in some way or another. And that might well be the basis for the iGroup patent. That said, we’ve entered a world where The Network is the ultimate resource. And that can well be a powerful powerful antidote to any remarkable design Apple comes up with.

Related Posts:

Lee Provoost: Generation Y and the iPhone-Blackberry dilemma  http://ow.ly/1S9wY

These are my favorite videos from SAP SAPPHIRE 2010.

Mobile: Vishal Sikka on the Sybase acquisition

You got the sense that one of the most important objectives of this Sapphire Event was to instill confidence in the market about SAPs continued prominent role in the business software. That comes, in big part, from clarity in intent. Vishal is dead clear in this video about why SAP purchased Sybase (after being prodded by Vinnie Mirchandani). My favorite, most well articulated video across the board.

Video Credit: Dennis Howlett

Collaboration in Context: SAP StreamWork and ByDesign

Whilst I wish SAP does more in terms of radically re-thinking how discrete business activity needs to be executed by balancing engagement, content access and traditional ERP processes, this application of StreamWork is an excellent start. This video provides a sneak peak into the power of blending structured and unstructured data access and collaboration to improve business outcomes.

Video Credit: SapphireNow

Experience Design: Hasso Plattner demoing SAP apps on the iPad

As I mentioned in my post, modern interfaces are finally coming to the enterprise. Some of the Enterprise 2.0 pure plays have done a great job of bringing engaging, usable interfaces to business – companies such as Socialcast and nGenera for instance. Intuit is an example of a traditional enterprise company that’s also done a brilliant job with Brainstorm, its innovation platform. In this video, Professor Hasso Plattner shows how seemingly bland (ok, who am I kidding – totally uninspiring) enterprise experiences can come alive thanks to in-memory and the iPad.

Video Credit: SapphireNow

The Outside Perspective I: (Mostly Positive)

Video of Paul Greenberg, Vinnie Mirchandani, Oliver Marks and Me. From Dennis Howletts blog post, about this video:

The magic dust Bill sprinkled must have doped Vinnie. I have never seen him write such an effusive and enthusiastic post about SAP. And we go back way longer than the number of hairs left on my head. If Paul Greenberg had been any more bubbly, you’d think he was a shill for the company. He most certainly is NOT. SAPPHIRE virgin Sameer saw lost opportunities around the collaboration space and I sense he is right in talking about SAP using collaboration as an add-on rather than appearing to think about it in terms of rethinking business processes.

Video Credit: Dennis Howlett

                                                                                                                                The Outside Perspective II: (Tough Love)

Finally, Vinnie Mirchandani and Paul Greenberg, two well respected analysts, thinkers and authors, tell it like it is.

Video Credit: Dennis Howlett

Related Posts:

• Ray Wang: Event Report: Sapphire 2010 Brings Customers Back To A Sense Of Normalcy http://ow.ly/1OUHU
• Thomas Wailgum: 5 Must-Read Blog Posts from SAP Sapphire 2010 – CIO.com http://ow.ly/1OUFE
• Michael Fauscette: SAP SapphireNow 2010 http://ow.ly/1OUKf
• Sig Rinde: SAPPHIRE Now – huge surprise, good stuff and a couple of important issues http://ow.ly/1OUGa
• Oliver Marks: SAP Gets Mojo Back: Enterprise 3.0 | ZDNet http://ow.ly/1OVe1
• Thomas Wailgum: SAP Sapphire 2010: Observations, News and Tweets – CIO.com http://ow.ly/1OUGY

That’s a quote from Bill McDermott, Co-CEO of SAP on the keynote stage. A message from SAP’s leadership to over 50,000 customers, employees and partners worldwide.

As I travelled back to Palo Alto last night from SAPPHIRE 2010, the central theme came clear to me: SAPs re-focus centers on leveraging people and relationships to redesign 1) its operations and technology strategy, and 2) its product design.

Operational and Technology Strategy

To net it out, there’s no question that this process enforcing company has gone back to the drawing board and come back with a singular focus: build together with people centric ecosystems. Partners, Customers and Employees. You sense clarity on a number of fronts -  sizing up the opportunity and execution path, frank recognition of its challenges in front of partners, bloggers and media and customers, it’s commitment to collaborative innovation, and more agility with respect to how it develops it’s products.

Most significant for me, was instilling a renewed sense of purpose for its employees. SAPPHIRE ‘veterans’ such as Vinnie Mirchandani had high praise for the event. In the context of fresh promise and tangible steps to move SAP forward, Dennis Howlett considered the content at this SAPPHIRE to be the best in 14 years (review here). The new leadership also embraced skeptical, critical feedback, extending a hand to those who have taken the time to express tough love.

In terms of technology strategy that will permeate most of its products and how SAP does business, global CIOs the world over will be hopeful of the commitments made here around technology excellence – in-memory and real time, virtualization, separation of user experience and business logic (more below) and a gradual move toward iterative design and innovation to replace outdated sequential multi year release cycles. Consider CTO, Vishal Sikka’s explanation of how SAP got a bunch of developers to build hundreds of mobile apps in just under 6 weeks. That’s agile from any company, let alone a global 50,000 employee, multi-national organization such as SAP.

Moving on to Products

Particularly striking to me was how SAP is now separating business logic from user experience, as described by Co-CEO, Jim Hagemann Snabe. They understand that end customers expect new, engaging ways to work as we move from the data centric web to the interaction web. As James Thomas, an executive in the BI group, summed up the experience design principle:

The devil is certainly in the (execution) details but the idea that enterprise software can offer hip-huggingly modernized experience design we see in consumer software, is extremely compelling.

As we described in our Enterprise 2.0 Whitepaper (summary post by Oliver Marks)  on Performance Acceleration, the consumer web and broadband have led to the ‘me” web in our consumer lives where data, engagements and content converge around the participant. It’s refreshing to see the enterprise understand the implications of this shift and begin the transition, away from the application centered user experience.

As you consider the strategic implications and enabling technology infrastructure that will power people centered, collaborative 21st century enterprises, SAP realizes that its core asset is being an enabler of critical customer, employee, partner and supplier processes for its customers. In principle, that positions the company extremely well to power in-context collaboration around business events.

Unfortunately, that’s where SAP missed the real opportunity to truly revolutionize business process facilitation in this first iteration of Business By Design. In speaking with customers and SAP executives the sense I got was that Business ByDesign (ByD) is a lighter weight rendition of SAP’s on premise suite. I sought comments from Paul Greenberg, ZDNet blogger and author, and someone who intimately understands process:

ByD enters a market that has already seen in-memory, lighter weight ERP offerings designed for the mid market and SMB.

The missed opportunity for me is this: Business Process Automation has not really seen “back to the drawing board” re-thinking in well over two decades. Since the early iterations of process automation, we’ve seen very useful but incremental improvement in how we transact and enforce process. But somewhere along the road we began to interchange business activity loops with how our ERP laden software enforced process completion. The reality is that in this day and age, customer expectations around engagement, and the opportunity to extract more from partner and supplier relationships have changed a lot since that original process automation design. And without question, at an accelerated pace in the last 36 months with the advent of new collaborative concepts and expectations on how people can work together to enrich business outcomes.

SAP has the chance to re-think how discrete business activities need to be conducted in the 21st century and what the optimal blend of process, engagement and content access truly supports today’s business needs. Customers opine openly on the consumer web and are looking for expert advice, beyond marketing, when they engage with businesses. Channel Partners want to do business with manufacturers who don’t just build good products, but those that make it easy to administer, sell and service the end customer. Suppliers who are getting commoditized, in reality, have critical component-level / raw material knowhow that can help them differentiate themselves as strategic partners to their customers. All of these examples require injecting some level of engagement and collaboration, alongside today’s largely ‘transactive’ and asynchronous data sharing enterprise process design.

Whilst I clearly heard a focused interest in adding collaboration to process, my fear is that collaboration and people engagement is being treated as a bolt on to age old process automation software. We see a glimmer of hope in StreamWork (which I think is a superb start towards collaboration in context), but it remains to be seen whether SAP has the chutzpah to truly ‘untether’ itself from a process first, engagement second mindset.

Relationships bring Agility

The good news is that its commitment to a people centric operational design and agile development processes can overcome this. As I said earlier, the most important objective at this time was to re-vitalize its relationships and sense of shared purpose with employees, customers, partners and community participants. And the company achieved this in spades. This new operational design, if executed correctly, will earn the markets patience as SAP tries to methodically expresses these new people centric, collaborative qualities in its products.

p.s. there’s a lot of  awesome content out there and I’ll do another post summarizing what I liked best. But for starters, check out Tom Raftery’s Photos on Flickr, here.

I read, with great interest, an interview with Jeff Clavier of SoftTechVC in Network World. Jeff’s had notable successes in the consumer world (Mint, MyBlogLog, and Userplane). I’ve never interacted with Jeff (other than recommending a Dim Sum Restaurant on Twitter) but I’ve always had respect for him – unlike many others, he’s adequately self deprecating when it comes to his passing on an opportunity to invest in LinkedIn. : -)

On the topic of Enterprise Software, Jeff says:

Most of SoftTech’s investments have so far been in the consumer space. “Innovation is slower on the enterprise side,” Clavier claims, and “beset by security issues.” “It’s a mature market with only a few acquirers; sales are more difficult and investors have little leverage when there are so few buyers. Low cost, consumer applications that leverage the Web offer capital efficiencies not matched on the enterprise side – and they are fun to work with.”

I’ve had conversations with scores of CEOs of traditional and Enterprise 2.0 companies on this topic. I’m still sticking with my analysis of over a year ago about Commoditization that’s partly due to a lack of focus on process and context, too much reliance on nebulous measures such as productivity and little alignment with tasks at hand. That’s played out with CubeTree’s purchase for $20 million. Anemic by Enterprise standards.

But leverage is coming. I’ve been reading a galley copy of The New Polymath by Vinnie Mirchandani, due out later this summer, and its clear how enterprise application infrastructure, based on customer expectations is ripe for a re-haul. It’s not just about the cloud and its also not just about SaaS vs On Premise business apps. Simpler, better, faster-to-update ways of GTD in context, and in a way that connects people, are about to hit. And that opens up organic as well as M&A opportunities on the technology supply side.

There’s quite a few opportunities’ that are large enough to have significant impact, but I’m going to touch on a few areas I see when talking to end customers, discounted by the pace of innovation, to date.

• Decision Facilitation: Yes, in-person meetings and email are time consuming, expensive and often un productive. The answer is not to simply move those to digital interactions powered by Enterprise 2.0. That’s a first step. But that can also mean moving the same unproductive discussions to a digital platform and arguably more of them since its less time consuming. We still need to wrap a decision facilitation layer around it to drive better results. OpenAPIs, activity streams, data and document access all in context is where its at.
• Exception Handling: Somewhere between your Enterprise 2.0 platform and your structured employee, partner and supplier processes, lies a wide open gap. It’s a myth that we can get by with process laden technology since it solves 70%, 80& 90% of repeatable process tasks. The other 10%, 20%, 30% is where things can go horribly wrong and cost millions. Weaving in a social fabric to deal with those exceptions to standard process outcomes is barely tapped today.
• CRM 2.0 (or socialCRM) is DOA with Enterprise 1.0. You can have the most sophisticated customer community but remember, prospects and customers are looking to bypass marketing and talk to experts deep inside your org and partner ecosystem. You cant have a vibrant and successful community if you’re rely on a 1990s style latency riddled, portal/intranet/extranet inside the firm. Even a “facebook for the enterprise” that cant methodically wrap around real time customer interaction demands is but a first step.
• Performance: I joined a panel on SugarCRM’s SugarCon event last month with Esteban Kolsky, Jeremiah Owyang and Diogo Rebelo where we discussed who owns Social  Data in the enterprise. Traditional BI tools extract results from structured data systems. New performance applications will blend social and analytical data to improve discrete business performance outcomes  – HR and Talent, Spend Management, Communication Performance. Etc. Ultimately moving from “here’s the report” to “here’s what to do about the data”.

Each of these can spawn vastly different value propositions for end customers.

Jeff’s spot on when he talks about simple consumer constructs starting to influence how Enterprise users interact with people and data. And all of the opportunities, above, will expect this as a price of entry. The big consideration though for large mature enterprises will be to avoid siloed efforts and the need to form a central collaborative back bone that’s still flexible enough to show concrete improvement around specific business tasks (sales, marketing, innovation, etc). Last month, Oliver Marks and I  presented at Interop on Performance Acceleration via Enterprise 2.0 and this was further validated by a very mature audience of technology managers and executives.

I’m expecting to have a lot of interesting conversations on this topic over the next few weeks. Tomorrow I head to SAP SAPPHIRE, then to the International Forum on Enterprise 2.0 in Milan where I’ll be talking about 21st Century Enterprises and the Role of Social, and finally at the Enterprise 2.0 conference in Boston where were going to be focusing on business value of E2.0.

I’ll update this post after I’ve processed what I learn.

SuccessFactors, a very well known provider of business software, particularly with an HR and Workplace performance focus has acquired enterprise social business software provider, CubeTree.

The terms of the deal from the press release are as follows:

SAN MATEO, Calif. and REDWOOD CITY, Calif.  – May 3, 2010 – Today SuccessFactors, Inc. (Nasdaq: SFSF) announced a definitive agreement to acquire CubeTree, Inc. a visionary leader in the rapidly growing social business software category. SuccessFactors is acquiring the company for $20 million in SuccessFactors stock at closing plus a contingent cash payment three years from closing to bring the value of the total consideration to $50 million.  There is no contingent cash payment if the value of the stock issued exceeds $50 million at any point during the three year period and to the extent the holders have disposed or hedged their holdings.  The guarantee is considered contingent consideration and will be recorded at fair value and marked-to-market each quarter through the statement of operations.

 

Couple of thoughts:

• $50 million doesn’t seem like a whole lot when compared to your average enterprise software deal but there’s more to it. Whilst CubeTree counts SAP, Cisco, LG, and Adobe as customers, I’ve confirmed that at least 2 of these companies do not use CubeTree across all employees. So the pricing seems warranted.
• On the $50 million thing, another point to consider. Many founders/CEOs of E2.0 companies have been open about that fact that social software is not hard to build (form an IP stand point). So effectively the exit for most will end up being an execution play or a technology transfer. In that context, $50 million on the table looks pretty good.
• Based on my interaction/work with the space as a whole, HR or employee productivity focused offerings are very serious about adding social and collaborative features to process. It’s the most natural fit in the enterprise. SuccessFactors is ensuring that they have a forward looking solution. And the timing is perfect.
• Cash is king of course, but the $30 million payout may well be a good bet for the CubeTree team. And it also goes easy on SuccessFactors’ wallet. Following little or no innovation in the last decade with respect to Enterprise Software, we’re at the beginning of a new cycle of overhaul when it comes to enterprise systems of record. In some cases its due to the need for SaaS, in others, its the need for better engagement. And as we see here, you get both. The likely hood of upside for CubeTree and its investors is better now that its been for a while.
  • For that cross section of customers that use both SuccessFactors and Saleforce.com, they now have an alternative to SalesForce.com’s Chatter, should they choose to look for one. Ben Kepes covers this.
• For the Enterprise 2.0 segment, my sense is that this is actually very good news from a valuation stand point. There are a few players such as Jive Software, Socialcast and Socialtext that have been attracting somewhere between reasonably sized to very large customers for a long time. And the emerging Enterprise 2.0 services ecosystem (disclaimer: My firm is one of those) will only raise awareness for the applicability of these technologies to address business challenges. If CubeTree could secure $50 million after it’s relatively short life, the prospects look good for other prominent players in the space that have a marquee customer base and as important, highly engaged platforms.

About a year ago I sensed that standalone Enterprise 2.0 faced serious commoditization and the lack of process and context was going to be a big problem. I still consider these to be significant impediments to getting to IPO for most vendors. That said, Chatter and now CubeTree serve as excellent reference architectures for other traditional enterprise software companies to see how process injected with engagement can lead to accelerated business performance for end customers. And subsequently look to make a purchase or build their own.

Congrats to both companies.  I’ve heard nothing but good things about CubeTree when its come up in conversations and it’s great to see that they have found a good home.

On the heels of SalesForce.com’s announcement of ChatterExchange this morning, FinancialForce releases Chatterbox – a rules based overlay on Chatter that allows businesses to associate the use of collaborative constructs with discrete business activity. For those of you not familiar with Salesforce.com’s Chatter, I covered the initial release, here.

For all the benefits of Enterprise 2.0 software, the biggest stumbling block has been this lingering feeling that its a solution looking for a problem to solve. And so even if you got past the skeptic managers and secured the green light to give it a shot, come adoption time, the use case for collaborating and socializing business conversations in the open via a microblogging application in favor of email just never came naturally. And at that point starts the real scramble: backfill use cases that might appeal to certain users, conduct training programs, institute herculean behavioral change management processes and devise incentive plans to get active usage up to a respectable level.

Welcome to the Enterprise Context Web.

FinancialForce, traditionally in the business of bringing Finance and Sales together on the force.com platform has built a rules and workflow facility to incorporate those very important social and collaborative elements and data triggers that make a given business activity whole. All on top of Chatter. Here’s how the finance and accounting community can collaborate over bean counting topics, using micriblogging constructs:

• When an outstanding credit on a customer account goes over 90 days – finance and sales professionals linked to that account can be immediately alerted, then they can quickly identify the reasons for non-payment and act to try and solve the problem to help cash flow and prevent further sales to that client being held up.
• When a specific supplier has been paid or a new supplier engaged – to help procurement and marketing departments better manage their suppliers and improve relationships.
• Customer accounts that show no activity for a specified length of time – may indicate service deficiencies and help ensure customers are contacted regularly.
• New sales over a specific size or won against a key competitor – to keep management and marketing abreast of sales trends.

Where unstructured and, really, knowledge access and sharing was conducted directly in email, via Chatterbox,  now accountants and finance professionals can now tap into the larger community for expertise and critical customer knowledge to understand exceptions in a process (say, an overdue invoice from an otherwise timely customer). If Chatter is adopted as the central collaborative backbone at the organization, it can now becomes the common watercooler to show up at with specific business data and context and where collaboration happens. Far beyond the out of the box process integration with Salesforces’ CRM application.

I still don’t believe that this eradicates adoption planning and more importantly incentive structures that encourage wide scale usage, out of the box. As I discussed with the FinancialForce folks, with respect to finance and accounting professionals, making it second nature to use a microblogging format to notify people over email needs to be preceded by showing the value of ambient outcomes. Accountants by the nature of their job do in fact need to conduct a lot of business in private and so subconsciously knowing when to going private vs. open might be a bit of a struggle. Add to that, most finance and accounting folks especially at smaller companies already know the 5 people at the company that might have the best answer for what generally are very specific questions. And on the topic of receiving data alerts in the microblogging stream, well, native enterprise apps have had email alerts per se for decades. Where process knowhow and training comes is to show communities wrap around critical alerts to respond to an event, thereby enrichening the outcome. Data events bring context out of the gate and that makes adoption and showing business benefit far more straight forward.

One smart thing that FinancialForce has done is to not limit the use of Chatterbox to its core financial product. By offering Chatterbox as the rules engine for any application on the Force.com platform, it limits its reliance on the financial and accounting user and that’s a really smart move.

Microblogging and data access is not new to the Enterprise Social Web. Pure play Enterprise 2.0 providers such as Socialcast and Socialtext both offer similar features and the upcoming release of Tibbr from TIBCO boasts this as a central theme to its own microblogging offering. But it’s all about distribution. And force.com brings awareness and distribution. And the rules engine offered by Chatterbox brings needed context to enterprise 2.0 constructs that’s been missing for far too long. As my friend Megan Murray commented to me, that’s Peanut Butter and Jelly or Carrots and Peas. Finally.

Dennis Howlett, an accountant by trade originally is optimistic, saying:

One off surgical help is useful, but the larger opportunity comes in activity pattern discovery where what� Sigurd Rinde might call Barely Repeatable Processes are captured and become actionable in the context of business processes that matter. Does this excite you or is it a huge yawn? I know where I am placing my bets

Some links on Chatter Exchange here as well and Paul Greenberg puts it all in context on his Social CRM ZDNet blog

Will it make it? I think so. Is there still a need for proper strategic planning and follow through for large scale uptake? No question about it. But that’s no different from any other enterprise software category. One things for sure – having the software make it simpler to illustrate business cases out of the box makes it a hell of a lot easier to pass the initial litmus test.

Finally, social starts to embrace process.

Lots of strong reaction to Union Square Venture Partner Fred Wilsons comments about Twitter (his portfolio company) today.

On the issue of third party applications that leverage Twitters API, Fred commented that a lot of the apps today are filling holes in twitter instead of building substantive businesses.

Much of the early work on the Twitter Platform has been filling holes in the Twitter product. It is the kind of work General Computer was doing in Cambridge in the early 80s. Some of the most popular third party services on Twitter are like that. Mobile clients come to mind. Photo sharing services come to mind. URL shorteners come to mind. Search comes to mind. Twitter really should have had all of that when it launched or it should have built those services right into the Twitter experience.

The media jumped on it. In a post titled “Holy Cow Did Twitter’s Top Investor Drop A Bombshell On Twitter App-Makers Today”, Nicholas Carlson lays out some strong reaction from the Twitter App community.

But we talked to sources at a few Twitter apps, and one of them told us Fred’s message is loud and clear. This source heard, "[Twitter is] going to do mobile apps and URLs. [Twitter is] way playing down the role of other apps. [Twitter] desperately need somebody to do vertical/gaming stuff, since that’s what we aren’t going to do ourselves. Bit.ly (as a URL shortener), TwitPic (as a photo uploader) and Tweetie (as an iPhone app) are now considered ‘core’ to the platform. They will either be bought or competed with."

First, Twitter is infrastructure. And true to that mission, it supports the building of applications and services that sit above it. Over time, applications and services start to get commoditized and adopted widely across the ecosystem. At that point, features offered by these apps are considered infrastructure and as history has proven, get pulled into the core of the application. Phone companies provided phone lines and tele marketing businesses built a value add service on top of that. Similarly, utility companies provided juice that allowed us to go from analog to digital with many of our appliances. If you agree that Twitter is infrastructure, the same thing is happening here. Over time the economics change. AT&T now offers business services that sit on top of its phone lines. That’s natural evolution as the service gets commoditized and there’s wide appeal. The market expects it to come as part of the base package and the stability and assurances that come with such a move. And the same thing is happening here.

Second (and this did not come up in Fred’s comments), Twitters success to-date largely mirrors traditional media – its broadcast for a majority of the users. Not conversations or other kinds of synchronous activity that those of us in the early adopter community have embraced. Don’t know about you but I’ve lost count of the number of mainstream users that fully realize the value and promise of Twitter only after they use a third party client such as HootSuite or Tweetdeck. So unless your only interested in following celebrity tweets, engaging with users or discovering new users via Twitters native interface is nothing short of awful.

Twitter needs to fix that as its price of entry stuff. And so coming out with its own spiffy client is imperative. And there’s similar arguments to be made for URL shortners and mobile clients – both critical to engage in a 140 character constrained world. And critical to Twitter if its to be able to successfully haul the water in the long run.

So it may come of as a harsh warning, but it’s natural evolution.

UPDATE: And just two days after posting this, Twitter announces the purchase of Tweetie, a Twitter client built for the iPhone and the Mac. Marshall Kirkpatrick at ReadWriteWeb has some good analysis on this breaking story.