The Enterprise Value of Social Software
In our last post, we discussed cloud computing, one of the building blocks of the digital infrastructure that is driving the changes described by the Big Shift. This time we explore a second building block, social software.
Social software is a key enabler of the move from push to pull
If executives are wary of cloud computing, they are flat-out skeptical of social software. When most non-IT executives hear "social software," they stop listening at "social" and imagine internet-aided water cooler chatter. They fear the loss of worker productivity — digital technology provides a seemingly endless array of distractions in the workplace. Executives cannot help but lose sleep over the potential loss of confidentiality and expanded opportunity for airing personal grievances.
These risks remain whether or not you employ social software within your enterprise. Ignoring social software can be a mistake. Applied against specific operating problems, social software can enable companies to respond efficiently to changing demands. It can provide the platform for scaling and amplifying connections and tapping into the knowledge flows within a company. The potential result: better meeting customer needs, increasing the knowledge of participants and sustained performance improvement. If extreme improvement is necessary to survive in the Big Shift, skeptics who ignore the potential of this tool will likely finish last.
We explore the ways that social software can drive short- and long-term operating performance improvement in our soon-to-be-released whitepaper, "Social Software for Business Performance." Here, we'd like to examine how social software supports all three levels of Pull: from Access to Attract to Achieve.
What is social software and why should you care?
In our use of the term, social software encompasses the software tools and platforms that allow dynamic, informal, and shared communication across an expanding group of individuals. In our personal lives, most of us are familiar (or becoming familiar) with social software tools, but most of us have not experienced them extensively in the enterprise.
Unfortunately, social software advocates haven't done a very good job of communicating the value these tools bring to the enterprise. While social software may well improve relationships, build trust and community, and tap into a greater diversity of ideas, these vague promises do little to convince skeptical executives concerned primarily with business performance.
This is a shame because social software can be tightly linked to business performance improvement. There is nothing vague about the impact the customer support technicians at OSIsoft experienced — a reduction of 21% in average- time-to-issue-resolution, a key operating metric that drives the company's financial performance, Similarly, one of a leading manufacturing company's business units reduced the hours required to ensure Sarbanes Oxley compliance by 61% through the targeted use of social software. These are measurable numbers with real financial value.
How does this all relate to The Power of Pull? Pull is the ability to draw out people and resources as needed to address opportunities and challenges. Social software has the potential to drive real value for companies through all three levels of pull described in our book.
Social software connects us more easily to the resources we need
The first level of pull, Access, involves the ability to find, learn about, and connect with the right people, information, and other resources to address unanticipated needs. One of the consequences of the increasing importance of knowledge flows in the Big Shift is that tacit, rather than explicit, knowledge is increasingly important in business. But tacit knowledge is also difficult to pin down. It resides in people who may be scattered across departments and geographies. No org chart or directory is going to help you find the tacit knowledge you need.
Social software allows the user to reach out to a large number of relevant participants and bring them into a virtual discussion around a specific problem or challenge, so tacit knowledge is shared and new knowledge is created. But social software also captures, and makes searchable, these informal conversations.
One example of how ease of access can directly drive value for the enterprise is exception handling. Consider a scenario common to many businesses: a customer calls with an issue, one that does not fit neatly into the categories of issues addressed previously. Resolving an unexpected customer request requires working outside of standard processes. Whoever is handling it wastes a considerable amount of time just trying to identify the correct people required to help find an answer or determine whether an unusual request should be approved. Workers in these situations lack a single source of trusted answers to common questions and have difficulty in finding the appropriate people to get involved in developing an answer. Similar problems occur over and over because the interactions with the customer and relevant functions are never formally documented.
Exceptions occur in every organization. In our informal surveys, we have found that as much as two-thirds of headcount time in major enterprise functions like marketing, manufacturing and supply chain management is spent on exception handling. Whether it is a customer that requires non-standard financing terms, a brand manager who needs to find the code for an unusual pallet configuration, or a software developer trying to resolve an issue in code that has multiple dependencies — each is an example of where traditional enterprise applications are insufficient and standard operating processes break.
Social software amplifies connections, increasing the company's opportunities for serendipity
The second level of pull, Attract, is about drawing out relevant people and resources, even those we are not even aware of needing. It is important because in the world of pull, we often don't know who or what will be valuable to our endeavors. We don't know what to look for and then find it — we call that serendipity and it sometimes feels like luck. Attract is about shaping serendipity.
As use of a social software tool becomes richer, it can become a platform for increasing the opportunity for serendipity. Users have more interactions and generate more detailed profiles of themselves as a by-product of their interactions — both their explicit knowledge and their expertise is exposed to others who need them but were not looking for them.
This serendipity, the discovery of important and needed resources without even knowing what to look for, is exactly what occurred for the Enterprise Social Media Experiment team on the SAP Developer Network (SDN). What began as a discussion between a small group of participants grew into a global collaborative development effort between developers from different parts of the world who met on the network. As the group identified and began working on a new application development effort, others searching for information about related problems or with a shared interest were drawn into the discussions and, where they could contribute, into working on the solution.
Social software provides a platform to achieve sustained performance improvement
The third level of pull, Achieve, is about reaching our full potential, as individuals and as institutions. It focuses on how to use the first two levels of pull to drive more rapid learning and sustained performance improvement. Companies won't be able to achieve sustained and extreme performance just by connecting workers to resources more efficiently in one-off situations. The real value comes when the one-off interactions develop into relationships and the relationships begin to facilitate sustained collaboration. Individuals and companies achieve their potential when they can tap into and create tacit knowledge through long-term collaborative relationships .
Innovation results from teams interacting around challenging problems. Again, the ESME example shows the value a social networking tool can provide in enabling this type of team formation and collaboration among dispersed and disconnected individuals. Teams require a platform where they can securely create and interact. Social software can provide the platform and tools for the creation spaces that we suggest will drive knowledge creation and accelerate talent development.
Focus on improving specific operating metrics to really evangelize for social software
The only way to accelerate and sustain usage of social software in the enterprise is to target implementations against very specific operating performance levers. This will help managers to see how social software directly impacts the traditional performance metrics that they care about. This will be a more effective, and ultimately more valuable, approach than trying to measure a financial ROI for social software implementations. Calculating a financial ROI requires too many assumptions, and it distracts from a more explicit focus on the key operating metrics that drive line managers.
Once you have embarked on a social software implementation, measuring the improvement in specific operating metrics and looking for opportunities to tell and re-tell the stories of workers who became more productive through the use of these tools can make the connection to social software tangible for others in your organization. That, more than mandating adoption or fine-tuning an ROI calculation, has the potential to drive sustained, rich and productive use of the tools in your company. Our working paper on social software will provide a more detailed discussion of our methodology.
What do you think? What has been your experience with social software? Have we helped to overcome the understandable skepticism that it is just a distraction and waste of time and effectively highlighted to potential role that social software can play in driving operating performance? What are the challenges that you see for greater usage and acceptance of social software?