Enterprise 2.0 and improved business performance

Summary:There's been some useful and interesting discussion in the blogosphere recently about collaborative social tools and their potential to improve business performance. Especially good takes have come from Hutch Carpenter, Sameer Patel, Ross Dawson, and ZDNet's own Dennis Howlett.At the core of this discussion is this essential question: Can social tools reach the "hard numbers" part of a business enough to make a real difference?

When you have tool myopia, it sometimes seems like every business problem looks like a nail for your particular software hammer. There's been some useful and interesting discussion in the blogosphere recently about collaborative social tools and their potential to improve business performance. Especially good takes have come from Hutch Carpenter, Sameer Patel, Ross Dawson, and ZDNet's own Dennis Howlett. At the core of this discussion is this essential question: Can social tools reach the "hard numbers" part of a business enough to make a real difference? This is a key point: Despite growing evidence, which I've presented here and elsewhere, there still remains for many people a real question about the overall ability of social software to improve how organizations get things done. It doesn't help that 'performance' itself is a loaded word that is shorthand for a wide variety of measures including improved efficiency, innovation, financial results, customer satisfaction, and many other metrics. Thus, even when good data is available, one person's vital performance measure is often another person's irrelevant statistic.
The art and science of performance measurement forms the underpinning of critical business questions about technology deployment in terms of how they ultimately affect the operation of a business. Countless IT projects over the decades have had to prepare the proverbial business case with ROI estimates to obtain funding. All too often these are optimistic estimates designed to support a decision that has already been made -- often due to local biases and parochial inclinations -- instead of dispassionately examining all reasonable approaches and supporting the one that actually makes the most sense with hard analysis.

Driving Improved Business Performance with IT-based Solutions

In other words, calculating the ROI of technology in a vacuum or with a focus on it in isolation or because of novelty is a poor approach, yet this is done with Enterprise 2.0 just as much as any other type of IT solution. Largely due to increased application, Enterprise 2.0 has increasingly been the subject of scrutiny about its effectiveness, particularly around value and performance. Even though many good case studies now exist (see Jakob Nielsen's terrific meta-study of some of the larger efforts), there's still not enough hard data in enough industries about whether social tools generally provide real, bottom-line value to businesses. Despite this, social tools have now become the standard -- even preferred -- way to interact in personal life and increasingly in professional life.

Related: Fixing IT in the cloud computing era

Given this focus on performance and productivity, will organizations eliminate one of the more popular ways of communicating unless they see regular ROI reports that confirm value? Perhaps, given that most organizations still block Facebook and Twitter, though that doesn't stop over 70% of employees from using them at work anyway. However, in my experience, most organizations don't calculate ROI regularly after a project has been funded, but that may change with Enterprise 2.0 given that CIOs are actually continuing to tighten their reign on social networks. And the debates won't go away any time soon: As I've discussed in Enterprise 2.0 ROI discussions last year and with the rise of a more emergent approach to IT, there is a confluence of factors that are continuing to push enterprise social software debates to the fore:
  1. Better IT solutions are often and easily accessible in the cloud and are available for low or no cost.
  2. Workers can (and will) "vote with the feet" to use the tools that they find are the most useful to get their jobs done (shadow IT and related grassroots IT trends)
  3. Calculating actual ROI in Enterprise 2.0 and more broadly of IT in general is notoriously difficult.
  4. There is still not enough objective evidence that key business performance metrics are directly improved by social software deployments.

Focusing on what matters to the business

In fact, I would propose that most of the theoretical discussion around the benefits and returns of enterprise social software is largely out of context. We still focus too much on the tools themselves (which are exciting), the potential for radical organizational change and/or transformation of traditional hierarchies (also very interesting, yet it unnerves those trying to run a business even though such transformation takes a time), and a focus on new collaborative approaches instead of looking for the best way to solve business problems. What is often lost when the primary focus is on Enterprise 2.0 -- defined here as freeform social tools in the workplace, or the "Facebook imperative" -- is a concentration on developing solutions to achieve specific business objectives. When you have tool myopia, it sometimes seems like every business problem looks like a nail for your particular software hammer. Yet there is nagging evidence that having better collaborative tools readily available to workers can still generate business returns, even if they aren't necessarily focused on a specific business objective. Jacob Morgan recently unearthed a new Frost and Sullivan report that has some interesting data about collaborative tools, concluding that:
Companies that deployed collaboration tools saw improved performance in innovation (68% vs 39% that didn’t deploy), sales growth (76% vs 50% that didn’t deploy), and profit growth (71% vs 45% that didn’t deploy). These are pretty solid numbers across the board.
Pretty solid numbers indeed, though they don't focus exclusively on Enterprise 2.0 but on collaborative technologies more broadly such as unified communication, video conferencing, and other related approaches.

Which comes first: Enterprise 2.0 or better performance

So, it makes one wonder if organizations that are more likely to be proactive and are already high performing will adopt Enterprise 2.0 when they believe it holds the potential to drive improvements, or if adopting Enterprise 2.0 will in itself lead to higher performance. It's a chicken-or-the-egg question and one that's hard to answer. But we can look at communication revolutions of the past to make some sense of it. E-mail is a useful historical example of broad-based improvements in collaboration because it originally made good use of the network to help people more rapidly work together on a wide scale. It was also widely adopted both in personal life and professional life, just like Enterprise 2.0 has started to be. But a look at it today shows the two-edged sword that all network software has: It requires overhead personally -- often lots of it on a daily basis -- to deal with. Related: What will power next-generation enterprises? A couple of posts ago I cited IBM's recent experience with social software and how it decreased overall e-mail volume company-wide. But at what real benefit, if it created a corresponding volume of social communication? And social computing tends to make existing conversations more public and transparent, probably creating a larger amount of communication overhead to deal with. Is then social software a zero-sum game with other IT solutions, at least in terms of worker time spent? While social software is so much more than a replacement for e-mail, this comparison does help us focus on what we are going to have to do to make Enterprise 2.0 a practical and useful part of the workplace long term. I've explored the expected three waves of Enterprise 2.0 and it's becoming clear that for it to drive better business performance, we're going to have to get to the second wave, and probably the third, before real business performance is achieved. And we're going to have to put the primary focus on how we meet business objectives, instead of on the tools themselves. Does Enterprise 2.0 drive business performance naturally, or is it in how we apply it? Please put your comments in Talkback below.

Topics: CXO

About

Dion Hinchcliffe is an expert in information technology, business strategy, and next-generation enterprises. He is currently Chief Strategy Officer at the digital business transformation firm Adjuvi. A veteran of enterprise IT, Dion has been working for two decades with leading-edge methods to bridge the widening gap between business and... Full Bio

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