This fragmentation of customer touchpoints cuts across marketing, sales, customer service, and even product development. In short, customers have moved to the digital world en masse, and companies have not kept up. Yes, it's true that most businesses currently realize they need to evolve. They know they must acquire suite of capable mobile apps, an effective strategy for connecting with consumers in social media, a workable plan for inbound search, and a good way to stay connected with consumers so they can build strong, long-term relationships, instead of merely engage in still-vital yet far less strategic point transactions.

At this point, you may ask -- given that it's often hard to pin down the big shifts in society and culture until after they happen -- what exactly is the imperative for companies to shift from transactions to engagement? For example, in my recent post on the strategic value of customer communities, I highlighted data that shows that customers engaged socially typically results in double digit gains in revenue. More importantly, strategic relationships both online and offline tend to be a zero-sum game. You typically only need one most-valuable business partner for a given function, if they understand your needs and cater to them. In this way, deep digital engagement is the future.

Yet the historical vagaries of how companies have applied technology to the customer relationship has meant that solutions have long been channel-centric, instead of customer-centric. While the majority of companies certainly do have modern call centers, social media marketing plans, e-mail campaigns, a mobile app strategy, an SEO policy, and so on, they are frequently unsynchronized and siloed. It's also highly likely these channels are also not monitored well and fall far short of the participation levels required to achieve ROI. They are also usually not mapped well to the customer experience or the company's overall digital strategy, despite the importance of doing so.

In fact, given the amount of communications and engagement technology most companies now have, it's entirely too common today for customers to have to figure out who to contact at a company to get something done. In many companies I encounter, there is often little connection across the marketing teams, sales teams, to the customer care team, each of which have to little context from others, outside of a few electronic customer records, and with little deliberate plan for how the customer should travel between them.

Just as challenging, new digital channels are accumulating faster than many companies can integrate them into their customer experience. New social networks, mobile devices, app stores, online touchpoints like fan sites, customer communities, Facebook pages, Twitter accounts, etc. seem to emerge on a weekly basis.  If that wasn't enough, customers are more ready to interact than ever before, further creating challenges of scale: Even if a company could integrate a new digital engagement channel into their efforts, these new venues are far more two-way. Customers expect a meaningful response to their attempts to connect with the companies they are interested in or otherwise desire involvement.

So this is the opportunity and the challenge combined: Engaged customers generate more revenue and stay more involved with the companies that respond in kind. Yet it's very challenging to meet their demands for engagement without fundamentally changing the rules of how companies connect with them. Interestingly, there are also growing indications, such as with packaged foods giant Kellogs recently, that digital approaches such as location-aware apps can actually help unify disparate channels, such as offline in-store presence with mobile applications for instance.

While there are a few excellent examples of robust, broad-spectrum cross-channel digital engagement that we can point to (Nike springs to mind, as does SAP, and even recently United Airlines has made much-needed leaps in the right direction), most companies are struggling mightily with the 1) fast-changing customer engagement landscape, 2) internally siloed customer functions, and 3) the often-profound transformation of organization, process, and culture required to properly engage in today's new digital, open, transparent and two-way customer channels.

Related: Gartner: CIOs and CMOs must 'turn sparks into flame'

Planning journeys is useful, but addressing unmet needs has the impact

There is already plenty of advice for companies trying to up their game when it comes to a more modernized customer journey. Almost all of them are being told to map the new journey out in detail, which can indeed define and communicate a useful "to be" end state for the company to rally around.

Personally, I find that defining clear objectives makes this exercise have the most value. What then should companies use as an organizing imperative for such efforts? Fortunately, customers too have similar challenges to company's today: Life is getting more complex, not less. And this gives us some easy targets to start focusing on as we increase integration between digital touchpoints, which customer experience experts like Ernan Roman are suggesting should be the focus:

• Solve a problem. Make a pain point go away, such as seamlessly conveying the current status of orders in any desired channel, or providing an innovative new way to participate in the co-design of a new product or service. Or perhaps do what T-mobile recently did, and use cues in social media to pro-actively engage with customers to save the relationship.
• Make life simpler. Remove the time, effort, and/or friction the customer has in engaging with you. I frequently make the point that companies tend to think of the customer experience in silos, where they are the only partner to the customer, which couldn't be further from the truth. Many smart next-generation companies are surrounding the old guard using concierge services and aggregators to give customers what they really want: Simple ways of accessing information and controlling their lives. Fortunately, taking customer engagement strategy up a level so that companies consider the whole contextual customer experience, as strategically important as it is, is just one useful way of simplifying the customer experience.
• Engage the customer. The core of the problem companies have in onboarding new digital channels such as social media, is that customers will then expect the company to respond and participate in conversations. And engagement at scale is one of the hardest things for companies to do as they are organized today, despite plenty of studies confirming the significant value in doing so. Remove the barriers to doing engaging in scale and make it a success by supplying tools and proactive organizational policiies to orchestrate advocates (employee, partner, and customer) to do the work whenever possible.

The one thing that is ultimately untenable is ignoring customer needs. And although many large companies are making strides in all of these areas, it also seems clear that smart new industry entrants are rewiring their customers' journey for the old guard, disintermediating them or otherwise dislocating their customer experiences in the process. Good examples of this include taxi service app Uber and financial services aggregation firm Mint, to name just two of many startups providing customers the experiences they really want using the underlying assets of other traditional businesses. This then is the real long-term existential threat of not understanding the full journey your customers want to take, and then being sure to provide it for them.

Related: A new reality between the CMO and CIO

Exactly why this is the case has various causes. These range from companies awkwardly adapting to social media and using it like a traditional one-way marketing channel in order to push out unwanted messages to the fact that people typically participate in social networks for more personal, non-business reasons. Yet, that 4 percent still represents a vast audience of many millions of engaged individuals, and there are no doubt millions more who would engage with businesses if there was a compelling reason why, and a good way to do it.

I also believe these figures almost certainly under-represent the leading minority of organizations — the stand-out success stories like SAP, American Express, and Pitney Bowes — that are in fact connecting productively today with their customers and other constituents via social media and online communities.

Most of this is not actually news. The challenges of adapting social media to the classical enterprise are manifest and well known at this point, yet the benefits in doing so continue to become clearer, even as the current data consistently shows that far from giving up, more companies are continuing to gear up to organize for social business.

For its own sake, the motivation for businesses to gather their stakeholders around them in digital communities is increasingly clear cut as the data on outcomes continues to improve. For instance, a major study conducted last year concluded that revenue from customers that are engaged in a company's community is 19 percent higher on average than from those that aren't. Big companies have apparently received the message on this: The same study also found that half of the top 100 brands already had customer communities in some form. If that weren't enough, IDC recently found that online communities are the clear number one area of interest this year for businesses in general when it comes to social media.

The value of a customer community has finally percolated to the executive level, as well: The value of forging strategic digital relationships with customers is now in the forefront of management thinking today. In a typical example of what business leadership is hearing about now, Bill Lee observed on the Harvard Business Review site recently that building communities is where one of the largest reservoirs of untapped value lies. The goal: Holding one's customers closely, and then harnessing the considerable opportunities for making proactive use of their creativity and bandwidth, cultivating closer and more sustained ties with the company, enabling peer-produced customer care, and providing recognition and status, among other benefits. Lee also noted:

[With customer communities] your prospective customers and buyers increasingly learn about you from their peers — including your current customers — while tending more and more to ignore traditional sales and marketing communications from corporate. Companies are now taking advantage of this new marketing reality, becoming more skilled at getting their customers to advocate for them, create peer influence in their markets, and make important contributions in areas like product development and services.

But companies have to either tap into existing communities or build their own. And, at this point, with available social media attention reaching saturation — as with all things digital — is there actually room for new companies to establish their own communities? Or has the window closed on major new efforts, as most industries already have a market-leading community?

To answer that question, we need to look at some basics for what it takes to create a successful customer community.

Related: Should companies drive their traffic to Facebook?

Is it really too late to start a customer community?

Now that companies have been building close relationships with their customers in social media and online communities for a while now, my research has shown several key traits that are generally required to be successful.

The first is commitment, both in active participation from business units — but especially from senior executives — who will stand behind it and provide the needed resources, often for years, in order to see the community flourish. One of the best examples is SAP Community Network's 2.5 million engaged customers/partners, so too is Intuit's millions of Live Community participants, both of which have been around for many years and are considered strategic assets by their organizations.

Second is a vibrant community itself, a voluble mix of customers, business partners, employees, company executives, and other interested parties. Sustaining a community over the years requires active investment in community management, as well as the regular (some would say constant) co-creation of valuable and otherwise hard-to-obtain shared knowledge, experience, wisdom, and other types of content. All of these are necessary to have a "there" there, and keep the community flowing, growing, and evolving.

While there are more, these top two success factors — when taken together — have an important implication for customer communities in a given industry, even for high-affiliation brands: They create what is known in the digital world as a network effect. This basically says that the larger and more successful a community gets, it becomes intrinsically richer and more valuable exponentially through the sheer sum of its members and their combined participation. In other words, network effects — and therefore social networks — tend to be a zero sum game; if a potential new community member has limited time, and we all do, why go to the second-best community, when you can just go to the very best one for the subjects one cares about?

While I'm in the process of mapping out the online communities for top industries including financial services, manufacturing, healthcare, public sector, IT, legal, and so on — and, yes, I plan to share that breakdown here soon — it's clear that in each industry, and often in sub-sectors, there is a definitive leader with most of the other customer communities being either nascent, very niche, or outright struggling. Analogous to the famous Civil War saying, it seems that when it comes to customer communities in a given industry, "whoever gets there first with the most people wins".

Although this doesn't seem to hold when it comes to a few truly exceptional and stand-out brands, it does seem to hold for most companies. In other words, if your competitor is years ahead of you in cultivating customer communities, you can certainly create your own, but even your customers are probably deeply involved in the ones that exist already, as they're currently the most exciting place to talk about your industry and engage with those with similar professional interests.

For some industries, the window of opportunity is still ajar

The corollary, however, is interesting; namely, that if your competitors have not yet gotten very far, there's still time to not only start, but even gain the lead. I see that entire industries typically get the community bug at about the same time. Someone proves that it works, and then everyone jumps in. We've seen this in the technology industry, media, financial services, professional services, crowd funding, and many other areas. However, I find that there are still a few whitespaces open.

But the overall trend is clear. The window is increasingly closed in industries where customer communities have become fairly mature. However, it's still open in some others, but won't be for long. Enterprises that want to establish the upper hand and build an uncatchable community network effort have perhaps a year or two. After that, it will be increasingly hard to play a winning game. And an important game it's becoming, too.

Those that control and wield the primary digital/social relationships with customers in a given industry are clearly slated to become the anointed winners.

There are many interesting implications to this, in terms of what many would otherwise consider anti-competitive behavior, as well as what it means for the future of how business fundamentally gets done.

There's another important decision point that we can't forget, as well. Looking back on how organizations have engaged with the social world, a broad pattern has emerged: You can either go to existing social environments and find ways to connect with your constituents there, following the rules and other constraints you find there, or you can create your own digital communities. I would observe that in the winning stories I've seen, almost entirely, they've taken the right path in the diagram above, creating the communities themselves from the platform up, and owning the data, relationships, and customer experience. Facebook, Twitter, and LinkedIn are important social channels and the key components to customer engagement today, but they're usually not viable customer communities at a strategic level.

In short, if you build it first/best, and give them a good reason to come, they will.

Related story

• Realizing social business: Enterprise community success stories

In contrast, IT is still looked at largely as an overhead expense, something to be contained and reduced, even as digital business has finally experienced a modest renaissance in the last few years as a direct driver of revenue and competitive advantage. Nevertheless, IT spending will be up globally by 4.2 percent in 2013, as companies tackle tablets, big data, enterprise software upgrades, and improved networks.

If you think these look mostly like infrastructure investments, however, then you'd be right. The reality is that the strategic use of information technology for growing and transforming the business is frequently not led by IT today. In fact, that's what the CMO budget growth data point purports to show: That marketing has now become a top consumer of IT in most large organizations.

What's more, beyond the increasingly rapid cycle times of today's online world, and the broad demographic shift of consumers to mobile and social channels, the cloud has become a principle enabler of IT liberation by unleashing a tsunami of on-demand services that can be quickly spun up by non-experts to meet business demand. These are new online services that manage customer relationships, deliver cross-channel marketing experiences, orchestrate digital advertising, and help business users react to the volumes of data that result from these activities to drive operations and support executive decision making.

This is creating a distinct sense of overlap and a blur of corporate responsibility as CMOs evaluate, acquire, and field extensive new IT capabilities for digital advertising, customer experience management, CRM, and other related functions across a growing set of touch points, which now include at a bare minimum traditional media, online media, social media, and mobile devices. A decade ago, much of the service delivery for these functions would be delegated under the CIO, who would support the marketing department and other groups in their IT endeavors as needed (although largely on IT's schedule). Now, as my ZDNet colleague Paul Greenberg recently observed, "marketing is at the forefront of strategic technology investment".

But as I noted just over a year ago in my analysis of the five big IT trends for the next half decade, CIOs themselves are largely not trying to get ahead of this curve. In fact, they are on a largely evolutionary technology road map, and frequently eschew the pursuit of breakthroughs that will give their companies major advantage. Why? Because their traditional role of developing infrastructure and keeping it operating (and manageable and secure) tends to make them risk adverse and focused on business continuity.

Taken as a whole, this inclination to avoid risk, combined with: 1) the growth of application backlogs created by years of constrained budget; 2) a parochial vision of IT as a central function; and 3) compelling new business solutions pouring into organizations from mobile app stores and cloud/SaaS, has resulted in a tremendous volume of pent-up IT demand that simply can't be met through a traditional IT approach.

These tensions have led inexorably to widespread consumeration. Bring your own devices (BYOD) and bring your own apps (BYOA) are the norm today, as business users take the technology reigns into their own hands. This also means that as we enter the era of deep engagement, the marketing department is uniquely positioned to be the internal business leader in managing the technologies on the boundary between our companies and the rest of the world. The CMO thus has both the mandate and the urgent requirement to enable digital engagement in a way that no other group does, and the ready capability to do it without much help from IT.

How will CMOs and CIOs reconcile today's shifting responsibilities?

I've attempted to describe the realignment and overlap in the work that CMOs and CIOs now both do in the visual shown above. It's clear from this that each function has some strengths over the other in certain areas: IT is better at operations, cost efficiency, and managing exceptions. Marketing is much better at customer experience, using data for business decisions, and moving quickly to seize a perceived market advantage. Some might quibble at whether IT is really better at innovation, but each function clearly has abilities in all of the areas listed, and the edge still goes to IT departments in my opinion. When they want to, anyway.

What's disturbing, however, is that it's clear from this view how much overlap there truly is today between the CMO and CIO. Another key indicator: I've noted previously that I've encountered a growing number of people with the title of CIO of marketing in recent months, showing how marketing departments are staffing up on their own senior IT executives in a quest to better execute on their mandate.

From these trends and others, I predict a couple of significant shifts in many organizations in the next few years to better respond to the evident blurring and overlap of who is in charge of leading technology within the business:

1. Many CIOs will become the chief infrastructure officer. They will be responsible for networks, data storage, devices, and security. They will not be as directly in charge of digital business or technology innovation in the line of business. They will largely not be leading digital innovation.

2. Strategic IT innovation will come from technology-savvy digital natives in the lines of business. These largely seem to be up-and-comers willing to take risks and upset the status quo. They have less to lose and more ability to think outside the box of the local IT bureaucracy. These will build next-generation digital business products and services, transformative new customer experiences, well-integrated cross-channel data-driven marketing solutions, and more that makes the fundamental assumption that agility, innovation, actionable data science, and deep customer engagement are an imperative to grow the business and outmanoeuvre competitors. They will be directly aided and abetted by on-demand cloud solutions in all their forms.

These two shifts won't always be the case in every organization, but I currently believe both of them will represent the broad trend as IT appears ready to separate into centralized infrastructure and decentralized innovation. This will be good for our businesses, good for IT (which is frequently lambasted for slow business leadership), and will overcome what my friend and colleague Michael Krigsman calls the primary "conflicting goals" of IT leadership today.

I'd note that we've also seen this conflict in enterprise architecture and elsewhere in recent years as a combined innovation and infrastructure mandate appear to have hampered the healthy growth and evolution of our organizations.

I believe that we can already see this shift happening today and CMO and CIOs will largely be better off, if they can agree on workable basic rules of engagement. This is likely to look like IT making what the marketing department does secure, safe, and governed, while the CMO tries out the latest new idea quickly and inexpensively. It's a brave new world that seems to be happening because of the pervasiveness of the cloud. It will be a vital set of changes for all of us to watch closely.

Related stories

• The convergence of mobile and social: The next IT battleground

The latest round of discussion about social business and the results so far (or those same found wanting by some estimates) seems to have been triggered by our own Larry Dignan, who recently summarized a discussion that happened last week on the Enterprise Irregulars mailing list:

The gist goes like this:

• The social enterprise is about culture, management, and process. It's not about software

• If that culture and process point sounds familiar, that's because social software may be ERP in a new wrapper. ERP software changed companies fundamentally, but also led to spectacular IT disasters, largely due to people, process, and culture. Social with business process integration won't work

• Internal collaboration also creates social mojo. Collaboration goes well beyond software and, frankly, is difficult.

Now what? Like most technologies, social is following a familiar path. First there's the argument that the software will change everything. Then there's the realization that the latest tech won't magically cure your enterprise. Then there's the blowback. Quietly---and just as everyone writes it off---something else comes along as an enabler. The social enterprise may follow a similar route, but for now, it's disillusionment time.

This led to a flurry of follow on posts, including one from respected industry thinker and veteran of many IT revolutions, Vinnie Mirchandani, whose--some would say healthy--skepticism about social in the enterprise has matured over the years:

Internal social has been somewhat disappointing the last few years. As I have written often, the Enterprise 2.0 category has been long on volume and short on value. But if you look beyond vendor happy talk, and see what creative companies are doing, there is definite reason for hope. GE has used the Facebook app, BranchOut, and LinkedIn to cut out headhunting fees for the majority of its 25,000 openings. That's real payback. Toyota has extended social to the Internet of Things by using Salesforce Chatter as its platform that connects its electric vehicles, customers, and dealers. Both the GE and Toyota use cases are being applied in a number of other industries.

External social is far more exciting, though not necessarily for the software tools. As I saw during the Republican convention last year, my city enjoyed an impressive improvement in positive perceptions. Larger brands are similarly expecting their agencies to do much of the social monitoring. The role of an agency is expanding as companies try complex campaigns across "all three screens," and print, and physical world.

...

Lots of exciting social, high payback stuff is being done by many customers. It would be a mistake to use quarterly results of software vendors to give up on social.

While these encouraging statements might be considered damning the social enterprise with faint praise, coming from Vinnie, this is almost certainly honest accolades, considering the source. These and others posts prompted IDC analyst and blogger Michael Fauscette to presumptively ask "Is social business dead?", noting:

Have businesses given [social media] a good go and, finding no value, are they abandoning their efforts? Okay, right up front here, let me say clearly, social for business is not only not dead, it's thriving and delivering lots of value to businesses! In fact, I believe that the changes associated with social business are absolutely critical for businesses in the information age if they want to attract and retain the best employees and partners, and if they want to meet the expectations of their customers. In our last social business survey conducted Summer 2012, we found that 67 percent of North American businesses were already using some social tools for business, up from 42 percent the prior year. So if that's true, why all the doom and gloom predictions?

Well, frankly, all of this is fairly standard fare, even discounting the fact that bloggers like to express their opinions, particularly if they're contrary.

Social business: A multi-billion dollar industry

However, the last question is worth answering this time: Why the doom and gloom predictions? Certainly, it's a growing and relatively healthy new technology industry, looking at the gross numbers, which say it will be a $4.6 billion industry within the next two years.

In fact, from my most recent summary of the adoption and usage stats for social media by enterprises, the numbers on their surface tell a very different story, seemingly confirming that the gap between business and consumer use of social media isn't exactly a chasm:

• Two-thirds of businesses are now using social technology for marketing and related functions; 37 percent expect social media to be used regularly across their entire business; 9 percent expect it to be fully integrated--AIIM Report 2012

• 79 percent of companies use, or are imminently planning to use, social media. Neary half of the companies who were rated as "effective" in social media said it was integral to their firms' strategy--Harvard Business Review Analytics Services

• 59 percent of companies use social media to engage with customers, 49 percent to advertise, and 35 percent to research customers; 30 percent use social media to research competitors and new products. Half, however, collect no data from social media--Stanford Business  2012 Social Media Survey.

On the heels of all of this information and prognostication is Gartner's latest finding, that by 2016, most large enterprises will have an enterprise social network, even as executive leadership and an overly technology focus often hurt current efforts:

Through 2015, 80 percent of social business efforts will not achieve the intended benefits due to inadequate leadership and an overemphasis on technology, even as enterprise social networks become the primary communication channels for noticing, deciding, or acting on information relevant to carrying out work.

By 2016, 50 percent of large organizations will have internal Facebook-like social networks, and 30 percent of these will be considered as essential as email and telephones are today. The leaders of social business initiatives need to shift their emphasis away from deciding which technology to implement and focus on identifying how social initiatives will improve work practices for both individual contributors and managers.

But if social business has a rocky road, it's because of the very different paradigm it entails from previous technology revolutions, even if the overall progression actually doesn't look that much different from earlier advantages. Part of this is often claimed to be due to the "pull" nature of social media, which means that the medium is used in a very different way than more transactional, non-emergent technology such as ERP, CRM, etc.

It should be noted that traditional enterprise IT often hasn't fared very well, even in its maturity, with ERP projects posted disappointing results in a surprisingly large percentage of cases, even in recent years according to Michael Krigsman. Yet reports of the death of ERP aren't common.

So which is the blame for the rocky road the social business has sometimes taken? The unique intrinsic aspects of social media, especially when compared to previous communication revolutions? Or is it merely the traditional parade of the hype cycle, with its inherent progression of education, disruption, maturity, and reconciliation?

The truth is, social media is indeed a very different creature from many of the technology revolutions that have come before. In particular, the public nature of social data, which often makes it quite challenging for entire industries to embrace, is the sharp end of the disruptive iceberg. In the end, however, the cultural, managment, and process issues are the long pole. As a result, for many organizations, the sheer competitive advantage may be the only reason they will be required to travel the rocky road of social business transformation at all.

Related stories:

• Enterprises grapple with social engagement

• Will social media ultimately permeate the enterprise?

Perhaps the most important uniqueness of social media itself is that the interaction within it is done entirely in public. These online conversations, which are "out out in the open", goes directly to the heart of the magic of the format. Of particular note is the ability to use social data to achieve what were formerly impossible -- or just very expensive -- yet vital business and civic objectives.

The public nature of social media conversations is also leading to increasingly thorny -- and urgent -- debates both within industries and at a national level about who actually owns all of this knowledge, what it can legitimately be used for, and who ultimately controls it.

Yet, despite the challenges, it's clear that social media is inexorably seeping into more and more of what businesses do every day. People praise, complain about, research, question, and seek help from companies around the clock by the millions via social media. Unfortunately, it's almost as obvious that many organizations are poorly prepared to think about and act on the significant competitive possibilities social media promises, all while a small cadre of leading organizations appear to be running ahead and divvying up the landscape.

To explore this latter topic in particular, I attended Oracle CloudWorld in Los Angeles earlier this week as a speaker, as well as to listen to those in attendance.  It's ever more clear to me, from talking with other attendees and in other recent discussions, that the business world is not noticeably accelerating in the same way that the digital world is: In fact, it's falling behind, and badly in some cases as we'll see.

Customer experience management and digital engagement are the umbrella topics -- and buzzphrases du jour as ZDNet's own Paul Greenberg recently pointed out -- that are all the rage today when it comes to external digital strategy.  But the simple truth is that most organizations are stuck in isolated silos when it comes to their marketing, sales, business development, and customer support processes.  Each silo looks at a fragment of the customer journey, have their competencies in that area -- and aren't structured, much less optimized to handle a social customer -- who nimbly moves back and forth across all of these functions over time and doesn't understand the uncoordinated morass they find.

And it's meeting the needs of the notional social customer which is the ultimate objective here, who only cares about the nature and quality of the relationship they have with the businesses they work with, and not how the company is (often poorly) organized to work with them. In short, developing more effective systems of digital engagement will be the broad objective of the next half-decade.

While it remains to be seen how the growing gap between how the market wants to communicate and how businesses work will actually impact companies, though the data also shows that those that don't keep up are paying an increasingly high price as well.

So let's look at what was said at CloudWorld on getting our businesses ready for these changes.

Social will be "everywhere, anywhere" you need it

At Cloudworld, famed social media thought leader Charlene Li of Altimeter opened up the day by walking the audience through her current thinking on social:

Without cloud, social would not be possible. It's not just convergence of people, but data and the content, data and the connections, they create among themselves and their companies.

We know that social media is much more than just Facebook. It's odd that we have to go to a certain place, a location, in order to be social. Social is so much more.

My theme for the enterprise is this: Social will be like air. It will be everywhere and anywhere you need it to be. To optimize its potential, we need to integrate it.

But key to understanding what organizations need to do about increasingly pervasive social media depends on their understanding of their place on the maturity curve, said Li. She enumerated the six steps of social business maturity as 1) Planning, 2) Presence, 3) Engagement, 4) Formalized, 5) Strategic & 6) Transformation, where most organizations are generally at step two right now.

While many business are still at a fairly low level of maturity with social, the devices, mobile apps, and social networks that people are using are leaving vast data trails across an ever-more fragmented set of channels, said Li. Today's new digital touchpoints are changing the relationships that companies have with customers from being "transient, transactional, occasional, and impersonal" to being "long-term, two-way, constant, and much more authentic".  The quite different customer relationship that's emerging with leading brands that have embraced social does have a considerable learning curve, even if it also confers substantial value including higher customer loyalty, satisfaction, and yes, also very real bottom line benefits.

But the real issue with achieving ROI with social, said Li, is that social strategies are often disconnected from what's important to the organization:

They simply have no clear business impact. What's your business goal with Facebook, LinkedIn? I hear people say, "We want more fans, subscribers."

How does that help you move your strategic business goals forward?

I personally think that Li's take on social was the right one: That companies must determine where they are on the maturity curve, and lay the ground work for the next step. Then focus their efforts on updating their business processes and functions to by more social and better connected in a way that improves meaningful outcomes.

What was perhaps most surprising during the session, was when she asked if anyone in the audience had managed to map out their new customer experience. Almost no one raised their hand in the entire ballroom.  Clearly, most organizations, reeling from various and competing impacts of consumerization, cloud, mobile, and social, are having a difficult time navigating the waters of today's rapid technology changes.

Related: Sizing up social business for 2012

Lessons learned from social business initiatives

My talk, later in the day, focused on how the customer journey is changing with the advent of widespread use of big data, social media, cloud, and smart mobility.  While I've explored recently how the customer journey is changing (and predicted a critical mass of companies will take the plunge in revamping their end of it this year), I find that the hard-won lessons of companies that have largely succeeded in their attempts are the most valuable for others to build on.

From my research over the last year, and which I presented at CloudWorld, organizations which had the best results in changing how they engage with the marketplace via new digital channels typically discovered the following:

• The customer journey is being truly reinvented, often in ways we don’t expect. Moving CRM to self-service mobile apps, using customers to co-create customer care, applying social analytics to find the highest value new customers, and using advocates develop and amplify social marketing are all examples of how CEM is evolving in new and innovative ways.
• Successful transformation requires a significant commitment to reach useful ROI levels. Like BASF and CEMEX, two excellent examples of businesses that made large-scale transformations to social last year, each spent a lot of time and effort obtain buy-in broadly across the company, fostering executive leadership, and connecting their enterprise social networks to the actual work of the business itself. Each went well beyond just acquiring a social toolset and assuming the rest takes care of itself on its own.
• You can’t be social all by yourself. The network must do most of it. The fundamental principle of social business is anyone can participate. The best efforts tap deeply into this and leverage social networks to create and deliver the value.
• The social business efforts that succeeded clearly laid a strong foundation for change. Social business transformation means setting the expectation that long-standing ways of working will have to be fundamentally rethought. This means not just expecting innovation, but seeking it out quickly, and then validating it. And most important, setting this expectation with with workers, partners, and customers. This most significantly includes investing in culture change.
• Skills for social & cloud governance as well as data science are the most lacking. People with these talents will remain in short supply through 2013, so organizations must cultivate the skills internally or wait to acquire them externally.
• Changing our thinking is the hard part. You can't buy software and suddenly be a social business. You have to disrupt long held assumptions. Changing ourselves is maybe the hardest part.
• Rarely are the people operating our existing business the ones that will create the next version of them. But the former is unlikely to let go of the reins lightly without a stake in the new model. Yet becoming more social often means some disruption of the old guard.
• Tracking the right measures and feeding those measures back into the change processes creates the most impact. Using big data technologies with social media has already shown major promise. More and more success stories I've encountered recently use them as an integral part of their operations.

The challenge for organization's today is learning a very new discipline (social business, in the parlance) -- namely actually connecting and working with the marketplace via digital channels at scale -- all the while the technology changes keep on coming, faster than they can usually be aborbed using traditional IT approaches. As I've observed before, this pace will be untenable in many organizations until they figure out the hard lessons required to change the way they apply digital broadly to their lines of business.

Related: 2013 predictions for enterprise social media

One significant obstacle stands out at this point: The lack of social media familiarity and expertise in organizations at a management level. It's now clear that this has kept social media at arm's length for too long. A Harvard Business Review column this week observed as much:

Too many companies have kept social platforms separate from their essential businesses.

A closely related issue is that the discipline still represents a very different way of working than many organizations are used to. But whatever the issues, and there are good many, the organizations I've spoken with in the last year now seem to realize the social world isn't going away any time soon. Many of them are now making plans accordingly.

Such plans must take much into account today: The galaxy of products and social media services that exist today, the many competing strategies and techniques that organiations can use -- and even the endless parade of social networks themselves -- have led many an organization directly towards analysis paralysis. Many have been content to wait for the pioneers to take the arrows for them and just copy what works. Fortunately, some of the leading organizational trends we are seeing today are focusing much more operationally and practically than ever before. in particular, as a primary objective, attempting to create actionable order out of the social media chaos. The move from the part-time social media committee to the fully staffed social media command center is a prime example of this evolution.

In fact, many enterprises are now busy reorganizing their social media efforts to scale them up, make them have greater impact, and to address what seems to otherwise be an unsustainable pace of technological change. The goal largely remains the same as ever: To capitalize on the rich potential that many organizations feel they're not yet reaching with social. This usually means ways to better connect with their primary stakeholders (workers, customers, partners) in the new channels of communication to which many of us have moved, while also tapping into more effective ways of working and creating mutual value there.

There's good news in our social business journey as well: The tools, platforms, strategies, and techniques of social business are at their highest level of maturity ever, even though that's not always saying much in emerging areas such as social analytics, the shift of social to mobile devices, and the rise of line-of-business integration. Despite this -- and actually, because of these advances specifically -- we're going to see a high-water mark in 2013 as organizations put social in the center of the way they operate like never before. This is not a supposition, but trends based on what some top companies currently have planned this year. I'll try to cite them as we go along below.

Eleven Predictions for Social Business in 2013

Last week I summarized the major trends in social business in 2012. Now it's time to take a look at what's on tap for this year. Here are eleven of the most significant areas of interest for enterprises as they seek to better adapt to social media and become more effective at creating significant value with it.

1. Companies will begin full integration of social media across the customer experience. While this started in earnest last year, we'll see companies begin updates to their entire customer experience, with social as a key aspect and equal citizen with other touchpoints, such as phone, Web presence, mobile apps, etc. What will really set this apart this year is that companies will use social media to conduct primary activites, including marketing to prospects, closing sales, supporting customers, gathering new product ideas, and even improving their supply chain. That this will happen widely will be greatly assisted by the fact that many major enterprise line-of-business applications have recently added social media capabilities to the way they work.
2. Social media will become subsumed into regular business applications. One of the bigger trends in social software recently has been "connectors" to bridge social media with existing business applications. Need to connect a community around a MS Office document? That's easy to do now in most enterprise social networks. It's the same with content/document management, marketing automation, customer care solutions, business intelligence tools, and more. In 2013, many enterprises will understand how these work, get better at turning these connectors on, and make them available to workers. In addition, updates to traditional business applications will continue to add more social networking features (often through social media startups they've acquired) that allow improved collaboration and sharing. In other words, regular software will become noticeably more social this year as well.
3. Social marketing and social CRM will grow substantially but remained siloed, for now. These two areas in external social business have been particularly successful in recent years. But even as social media encourages a consistent and self-guided customer journey across marketing, sales, customer care, and product development, this is something that the internal fiefdoms of enterprises are still struggling to support (marketing is usually completely disconnected from customer care in most businesses, for instance.) Despite successes in some areas -- and even though the very best marketing is often terrific (and widely-observable) customer service -- these two areas will only begin moving towards each other this year. The rise of mobility may be the Great Unifier here. I've predicted before than mobile is the wildcard that will bring these two functions together, as most companies will typically have one primary app they use to engage customers with, including marketing and customer care.
4. Large companies will begin creating and moving to strategic engagement platforms. According to recent data from Gartner, companies realize that having sustained relationships with their customers in digital channels is a top priority. They are now building communities, mobile apps, and other enivornments in which to maintain long-term customer relationships. A great example is Chevrolet's new 'Find New Roads' effort, which is an attempt to create a strategic way to engage with customers over the next decade. The development of powerful new consumer engagement platforms as a strategic corporate asset will be a growing priority in 2013.
5. Data scientists will become the top hire on social media teams, with community managers and social architects vying for the 2nd spot. Pretty much the hottest job in tech last year was the burgeoning information jockey whose job is to make sense of the vast pools of Big Data companies have been accumulating in recent years. Social media is one of the greatest sources of information in this regard, but it's also useless without someone to craft usable lenses into it. Enter the rise of data scientists, the lack of which was one of my Big Data predictions for last year which came poignantly true. Cultivating thiss skill wil be big in 2013. Community managers and social architects will also be urgent hires in many firms in 2013, but good ones will also be in particularly short supply.
6. Social media will become a leading source of business intelligence. While this has been the subject of countless predictions in the last several years, it'll finally become mainstream in 2013 as the tools and skills get ready for prime time. Everything from real estate to finance and just about every other industry will be affected by the real-time views into what's vital and will change the art of the possible. See my gallery of the 10 major examples of the ways that social media and big data are already making this happen today in many industries.
7. The fusion of mobile/social will continue to be a major challenge. Making social media an effective and enjoyable experience on mobile devices such as phones and tablets, particularly for business uses, is still in its infancy. While some companies are rolling their own branded social/mobile apps, I currently expect that enterprise social softare vendors will do most of the work ultimately. They will even make significant progress this year. However, I also estimate they will still not achieve parity with their consumer app cousins in 2013, which in turn are usually still not as good as their Web native counterparts in general. But investment here will be critical given the broad demographic shifts to mobile. Enterprises must continue to put pressure on their vendors to bring their mobile experiences for social apps up to with parity with other service delivery channels.
8. Social fragmentation and silos will vex social media strategists more than ever before. Sometimes it feels like we have too many social networks, too many apps, too many digital identities. All of these will make it hard to manage, govern, and secure social media for many businesses, much less take take advantage of them at scale. The fragmentation helps perpetuate so-called "dark social", where it's hard to see what's actually going on. And the issue will only get worse as everything becomes more social. While the top social networks will have continuity and presence across touchpoints as they are used as the "connective tissue" between individual Web sites, business applications, and other media, enterprises will still be looking at solutions to unify identity, social activity, social apps, and social data in order to keep it under control. For now, be prepard to manage a few top level identities and a bunch of smaller ones at an employee level. Fortunately, unified enterprise identity management for the closely-related arena of SaaS and cloud services is getting much better. It may in fact end up offering a partial solution for enterprise social identity as well. In the meantime, concerted efforts to sort out social silos and address them proactively and comprehensively will help for the short-term.
9. The limits of internal-only social media will be increasingly felt. More integrated, outward-inclusive, and holistic strategies will emerge. The evidence is mounting that internal-only social media sharply limits what's possible and often leads to adoption ceilings of 30% or so, as workers are limited in who they can actually collaborate with, leaving them for tools with more reach. Many companies I spoke with this year were interested in broading their definition of engagement and creating environments to more broadly connect their stakeholders, wherever they are. Leading social business products from companies like Salesforce, IBM, and Jive have all added features fairly recently to enable cross boundary social engagement (worker to customer, for example), and these will actually be used more broadly than ever before in 2013.
10. Open standards for social media will continue to reflect the needs of startups, not enterprises. I've been bullish for enterprise social media standards such as OpenSocial in the past. With the W3C gearing up to get serious about the vital topic of social business standards this year, we'll see if we can reconcile the two worlds of consumer and enterprise social media, the former which tends to drive most of the conversation on the topic of standadrds. Many companies have forgotten how hard it was to achieve what the IT industry did with open standards in years past or the great advantages it brought us as businesses. The conversation will get interesting again this year, but will not definitely sort itself out. However, I urge all enterprises should get their say in, or be left behind as startups create even more de facto standards that very likely will not serve the unique needs of our businesses.
11. Security and compliance for social media becomes a significant industry in its own right. Many industries have a hard time participating in social media at all. Financial services, insurance, legal, and health care are good examples of these, but really, all public companies often face severe restrictions on what they can do, which in turns sharply limits the benefits of social media that they can access. Global firms have even more challenges as they face an incredibly complex patchwork of local, regional, and national laws on social media usage and customer privacy around the world. This has led to a cottage industry of startups to help sort it all out and provide a safety net under which companies can be assured they are following laws and regulations. I'm tracking more and more entrants into the space and we'll see the industry grow enormously to make it easier and safer for enterprises to engage in social media in its many forms. The availability of such capabilities will help move social business forward greatly this year.

Of course, a great deal more than what's on this list will actually happen in 2013, including a number of things we can't yet imagine. For example, I suspect we've not seen the end of the social media uprising meme (see Mashable for a great list of the particularly historic ones in 2011). Many think this is increasingly leading up to a Corporate Spring. However, if the behavioral data on consumerization is even close, this is already under way as workers use the tools they choose and pay for to communicate and collaborate.

However, the move to social media this year will not in fact be revolutionary for most organizations, it will simply be practical necessity. As I like to say, a billion people have changed their communication and interpersonal habits over the last four years. Companies can ignore this for perhaps a bit longer in some cases, but not if they want to stay relevant or healthy. It's going to be an exciting year for social business all around, not just because much of the hype has receded, but because we're now just getting work done, as so many recent examples have shown.

Please contribute your own predictions or share links to your favorite social media predition list for 2013 in comments below.

Anecdotally, with a growing complement of hard-won experience in the tools, technologies, and techniques of social business last year, companies are poised to have full contact with social media in 2013 like never before. From a statistical and trend perspective, the most recent data shows that we've now moved beyond the end of the beginning. Social media is no longer largely unknown and ignorable, but the exceedingly familiar and increasingly indispensable for many businesses.

However, as organizations experimented with and widely deployed social media in their various functions, 2012 also became an breakthrough year for teasing out the more intractable issues of the medium that are likely to vex many enterprises in the coming years. As companies grappled with the cultural, organizational, technical, and process issues that the open and participative nature of social media brought to the fore, we began to see some of the way through the challenges as well.

The social business software industry didn't stand still in 2012 either, from a big vendor perspective in particular. New and existing players either made significant updates to their social business tools and platforms, or revised their go-to-market strategies and end-user solutions to match. Along the way, significant new niches established themselves within the space to support the unique needs of the enterprise, particularly around analytics, security, and compliance. Organizations also sought to scale-up their social media efforts as efficienctly as possible to get at the benefits in a meaningful way.

Related: The social enterprise: Nine insights

But perhaps the most important development of the year was the maturation and accumulation of experience in how to make social business work in large enterprises. The complex dance that early adopters were forced to learn in trying to balance the constantly changing social business landscape leveled out a bit finally in 2012. For once, the seemingly endless growth of consumer social media seemed to align better with their organizations' own evolution through the early tactical experiments, subsequent pilot projects, and broader enterprise-wide adoption.

There are now signs of real maturity in the industry, such as the emergence of social media mission control rooms and well-funded centers of excellence, combined with real staffs and budgets, that are moving social media into the day-to-day operations of many organizations. While not all, or even most, organizations are quite this far along, a critical mass appear to be, and it's encouraging that we seem to be headed in this direction overall.

The Stand-Out Social Business Trends of 2012

So, with all of this in mind, what did we see in 2012 that stands out in retrospect as an inflection point or major development in the realm of social business? From my analysis and end-of-year conversations, here's what took place:

• The re-unification of social business. While 2011 was dominated by the realization that social media must be connected to daily work to have real impact, 2012 revealed that organizations had created numerous social silos that fragmented their efforts and people, especially when it came to the walls they erected between internal and external social media. Yet, a growing body of evidence clearly showed that when social business environments had the least barriers and most connection between them, the measurable business outcomes were substantially higher. Many organizations I spoke with this year are now planning to address the disconnect between internal and external efforts better and reduce their social media silos.
• The big vendors moved into social business. While IBM has long been a leader in social business, up until recently, the other software giants either had minor side bets or had platforms that could be social, but was not their primary function. This all changed in 2012 as Oracle, SAP, and Microsoft each doubled-down on social business by making substantial new public commitments to it, major related acquisitions, or introducing new software products. Or all three. SAP announced their far-reaching Jam effort, Microsoft acquired Yammer, beefed up SharePoint 2013, and updated their social business vision, while Oracle's Larry Ellison finally put his company into the industry at the CEO level. Of all of these, only Microsoft's moves seem to have made it rather challenging for social business practitioners in the short term, as the reformulation and resurgence of Redmond's social business offerings seem to be causing widespread re-evaluation of platform decisions in many of the companies I've talked to recently.
• Social business became data-driven. You couldn't sit through a presentation last year without hearing about the confluence of big data and social media, and more specifically how it will allow companies to zero-in on ROI. While the experiments to validate the latter almost certainly abound in a pilot project near you, the former became reality as hundreds of companies got into the social data business last year. The goal? To turn the mass of global conversations in social media into relevant insights that can improve results in marketing, sales, customer care, product development, and more. Numerous software firms added social analytics and business intelligence features to their existing products, while a great many new startups received funding to see if they could strike the right balance between usability, timeliness, relevance, and actionable information. What's more, enterprises were kicking the tires of these capabilities in droves, with virtually every company I spoke to last year closely watching the space and trying out numerous offerings.
• Mobile hampered social business projects more than it helped them. I almost wrote that the rise of smart mobile devices and tablets significantly impacted social business strategies in most companies, but that should be obvious to just about everyone. What's less obvious is that the strong user pull of mobile devices, which are (potentially) perfect for delivery of social business user experiences, made it awkward for older efforts still rolling out their pre-mobile social marketing and workforce engagement efforts. Projects that sought stop-gap solutions often delayed their own timelines overall or provided subpar interim solutions. Even more vexing, the level of quality of mobile apps for enterprise social business efforts, either homegrown or from vendors, was generally quite a bit lower than the consumer-side. While vendors such as Jive and Salesforce greatly improved their offerings, users that wanted to engage socially on mobile devices were often disappointed this year. However, there's no question that the situation will improve in the fairly near future, yet it will be painful for a while as companies sort out and reconcile their (usually separate) social and mobile initiatives. In the end, I suspect, software vendors will be counted on to provide most of the default user experiences in this regard.
• Social business merged with main customer experience. Or at least, organizations finally began to look at it this way. While social media used to be very much off to the side of the mainstream experience, with a community tab, some targeted social marketing widgets, or a row of 'follow me' buttons in a side bar, social justifiably became a first-class citizen of the customer experience in 2012. While a few brave souls in years past have thrown away their traditional digital experiences and made them all social, a new view has arisen to merge and combine the traditional and social customer experiences into something more holistic, natural, and expected by today's consumer. While organizations will likely take years to realize it in practice, it was encouraging to see this vision on so many drawing boards this year.

Where there other social business happenings in 2012? There certainly were, and you can find great roundups of these from industry analyst Michael Fauscette and Leanne Chase at The Community Roundtable. However, in my analysis, the five major issues above were the most impactful and relevant to social business initiatives overall. Organizations wishing to fast-forward their efforts can capitalize on these major crux points in the industry's social business journey, and avoid taking the long route along the way to becoming more effective digital businesses.

What did you see as the biggest social business trends of 2012?

As I look back, it's clear that we've now have more and better data points captured this year than ever before. There's little doubt now about the big picture: Social media is now being used in en masse for marketing, sales, operations, customer care, supply chain, and amongst our workforces. Yet the while the benefits are clearly uneven -- some companies are achieving truly stand-out ROI while others only see minor incremental value -- the trend is literally all in one direction: Social media adoption is growing steadily and is now used in the majority of organizations today in some capacity.

Last year, I benchmarked all the availabile data on social media adoption vs. social business, and it was obvious that businesses were about 2-4 years behind the rest of the world in adoption.  The leading edge of this graph has not changed much this year, but the lagging end seems to have.  A wealth of studies have emerged this year to show that social media not only has a firm footing in most organizations, but has become top of mind for C-level executives.

Related: Is it time for a C-level social media executive?

As expected, some business functions are ahead of the curve when it comes to adopting social media. Marketing has long been an early user in particular, but social workforce (aka Enterprise 2.0), Social CRM, and social product development have proceeded well. Others are decided behind the curve, even though there are strong examples in each case. These include social HR and social supply chain.

Related: Enterprise 2.0 a bright spot for software in 2012

Social Business Maturity Stats for 2012

So, what does this year's social business maturity data look like? Below is a summary with links to the details of the findings themselves:

• Two-thirds of businesses are now using social technology for marketing and related functions. 37% expect social media to be used regularly across their entire business. 9% expect it to be fully integrated. -- AIIM Report 2012.
• 79% of companies use, or are imminently planning to use, social media. Neary half of the companies who were rated as 'effective' in social media said it was integral to their firms' strategy. -- Harvard Business Review Analytics Services.
• 59% of companies use social media to engage with customers, 49% to advertise, and 35% to research customers. 30% use social media to research competitors and new products. Half, however, collect no data from social media. -- Stanford Business  2012 Social Media Survey.
• 46% of companies globally planned to increase their investment in social media this year. However, only 22% of middle managers felt prepared to properly incorporate social media into their work. -- IBM 2012 Social Business Study.
• 52% of executives say that social business is important to their companies today. 86% says it will be vital in three years. 28% of CEOs say social business is vital to their organizations, about twice the rate of CFOs and CIOs. -- MIT Sloan Management Review 2012 Social Business Global Executive Study.
• 71% of companies today say they provide customer support via social media. 18% handle over a quarter of all customer care this way. -- SAP and Social Media Today Report.
• Social workforce projects generally engaged less than half of their workforce, and 96% of external and internal social efforts were not connected, despite evidence of high ROI there. -- Social Business Council 2012 Engagement Study.
• 27% of companies now have someone dedicated to social media in their company. Those that have dedicated departments, 83% are staffed with 3 or fewer people. -- Ragan Communications and NASDAQ OMX Survey.
• Update: Nielsen's extensive new Social Media Report 2012 was just released. It reports that 47% of users employ social media to get customer service. One in three prefer it.

A few things stand out from this list. One is that more formal work than ever is taking place at highly respected organizations to understand the usage and efficacy of social media to businesses. This includes leading universities and think tanks including Stanford, Harvard, MIT, and many others.  This will help decision makers and business strategists have the clearest view yet on what works and how to most effectively transition to becoming a social business.

The second is that organizations are clearly in the very midst of this transition. Most have sprinkled social media around the edges, experimented, and have begun the journey.  Only the late majority and the technology laggards are left at this point (see visual above.)  If you haven't started by now, you are in a distinct minority for the first time since social media arrived on the scene.

The final point is that the statistics above -- and I'm fully aware that they are largely self-reported figures that should be taken with a grain of salt, though they paint a compelling picture in the aggregate -- are just the tip of the iceberg when it comes to the data available for organizations to make decisions on where to invest with social media and if they are above par, on par, or below par when it comes to applying what has become one of the greatest communication revolutions in history to their business.

To go more fully into this data, I'll be posting a gallery here shortly. In the meantime, please post your favorite statistics on social business from 2012 in comments below.

Yet a growing set of compelling examples is showing us unique and vitally useful outcomes that are only possible in social media.  For those just catching up with the story, part of the uniqueness and power of social media is that it generaly makes the information that's shared -- using social networks, blogs, and other forms -- public by default.

This is in contrast to earlier forms of analog and digital communication, where we were required to have perfect foreknowledge of who should be involved in a conversation, such as their phone number(s), e-mail address(es), or other contact  info. Everyone else was automatically excluded from the process and the contents of the discourse itself was largely invisible and left little behind. 

In sharp contrast to this model, as we've learned through a decade of global online experimentation, is that it's often best when we don't overly call-out the precise identities of those we wish to converse with. Instead, we've discovered that it's better for us to let those who find value in what we're saying to find us (typically via search or recommendation by friend or technology.) This enables us both embrace and enable serendipity, emergence, and open innovation and this -- as MIT's Andrew McAfee recently pointed out for the business world --- lets us bring enough of the right people together dynamically to create the most interesting and useful results possible. 

The result is a rich tapestry of conversations and information that everyone can join in on if they desire, or benefit from later on.

Related: Social media taps more directly into the power laws of digital networks

It's also turned out that the default public mode of social media, though it can also cause no end of headaches for companies in industries where information tends to be very private and controlled, allows us to realize certain very significant new scenarios that older communications technologies simply couldn't (or sometimes, just wouldn't.) What scenarios you ask? The most important and broadest one is letting us perceive virtually all global conversation across social media in real-time and then analyze it. While observing such conversations has been possible for a while, the timeliness hasn't been easy to achieve. The same for effective and meaningful analysis.

Scale is the first part of the problem with such timely analysis of social media, especially when it must be thorough and accurate. As I pointed out in my last post, that there are hundreds of large social networks, millions of blogs, and countless online communities and forums to look at and engage with. Important and business relevant conversations can be found in far-flung corners that must be examined, or we potentially pay the consequences. As Douglas Merrill observed last week in the Harvard Business Review blogs, adding new signals is one of the single most valuable ways to improve data analysis.

Thus, forging an integrated picture that truly conveys the constant and endless stream activities and insights within social media conversation is a relatively new phenomenon, enabled by a growing raft of so-called "big data" technologies like Hadoop and Mahout.

Related: 'Big Data' or 'corporate spying'?

Isolating relevant meaning from the noise is the second part of the problem, because the form and content of social media is relatively unstructured and informal. It's also filled with rich media, particularly pictures, as well as video and audio. Given the vast diversity inherent in the nearly 1.5 billion worldwide participants, including their language, cultures, customs, and idioms and it's clear that even if we can actualy process all of this conversation quickly enough, making sense of it all is as big -- and probably much more substantial -- a challenge.

Yet perhaps it really doesn't have to be all that hard, depending on what we're trying to accomplish. In collecting compelling examples of what we can do by simply by listening to and analyzing social media, it quickly becomes pretty obvious that we don't necessarily have to boil the entire ocean of scale and semantics when it comes to making social media strategically useful. In fact, some of the best examples often take relatively simple data sets and infer the meaning by combining them together with straightforward geographic visualizations, for instance. That said, the more signal and analysis we apply, the more accurate and useful the insights will be.

Related: How social media and big data will unleash what we know

While it's clear that we're still in the early, formative stages of social media analysis, it's equally clear that there is a great deal of business and civic utility in applying its techniques to our lives and work today. I've collected 10 good instances of what's possible, with thanks to Tom Raftery of Greenmonk for identifying some of the stellar examples in this gallery.

Gallery: Ten examples of big data extracting value from social media

Note: The stream graph in the visual above was generating using Twitter StreamGraphs. A stream graph is a common technique employed to visualize the shape of online conversations over time. This graph shows the most recent 1,000 tweets involving ZDNet on the afternoon of November 7th. It shows that conversations about 'Microsoft', 'Skype', and 'mobile' were the most interesting -- or at least the largest -- public conversations of that time period about ZDNet.

But the vagaries of social media -- with its deep roots in trust, authenticity, and genuine engagement with people -- means real commitment is required to succeed. And of a rather different kind. The cynical need not apply, nor the pretenders to the throne. While the energy and zeal of the Marc Benioffs of the industry certainly seem to measure up, it's unclear if the old-school firms can make the transition and fully support their customers' transition to new engagement models.

Or can they? A great exploration of this topic by Nilofer Merchant on Harvard Business Review today reminds us that IBM's stock price recently reached its highest point in the century-old company's history, just as their effort to become a social business is hitting its zenith.  Maybe big companies can innovate and evolve, if they can truly change.

And now perhaps it's SAP's turn. Yesterday, I received a preview of SAP's latest take on social software from Sameer Patel, who is Global VP and General Manager for, SAP's Social Software Solutions. (Disclaimer: He's also a good friend.) I came away fairly impressed. Before I get into the details, I should note that Sameer's spent the last few years exploring why social media is so successful in the consumer space, yet taking its sweet time getting to our urgent business problems in the enterprise world. It's not that enterprises don't have social software, they do. But they're not yet consistently effective at producing the results that are possible, despite increasingly strong success stories from some companies.

Probably one of the best summaries of Sameer's thinking is contained in his widely read Social Business Facts and Fiction post earlier this year. And you can see much of these ideas in place with his leadership of SAP's new social business offerings, which you can see depicted below from one of the slides in the briefing I was given yesterday. If this seems like an unusually personal perspective on an enterprise launch, I'd just remind you that social business is about people. In the end, the story of how SAP got here with social business is one made by the teams involved and their ideas. And it's now one that the market will decide if it resonates.

Now, let's get to the details of the SAP Jam (the name of their enterprise social networking component) announcement and its related functional offerings that I think are smart in terms of putting social networking deeply into the context of our work and how it gets done.

SAP's Jam and Collaborative Solutions

SAP Jam comes from to SAP from its SuccessFactors acquisition, which you can clearly see if you follow the main product URL. Many customers are going to ask how this relates to Streamwork, their previous social business offerings and Sameer has been clear to say that Jam is going to be the long-term go-forward platform. Many StreamWork functions are available in Jam already and Jam will be the foundation of SAP's social business functions going forward.

Here are the key aspects of Jam that are worth noting:

• Full-strength enterprise social network.All of the standard features you'd expect are contained in Jam, including activity streams, feeds, status updates, and so on. Filtering, a key but advanced feature to prevent non-essential information from overwhelming users' feeds, is also present. Support for OpenSocial is coming, as is a rich iPad client with video chat and record. Support for rich media of many kinds is available now.
• Strong content-centric features. The work in most business revolves around documents and SAP Jam gets this. Strong features for content creation, sharing, commenting, and editing are present throughout. Though some niche enterprise social networks get this, as does SharePoint, it's smart that Jam puts this front and center.
• Situated social solutions for functional use cases. The need to put social directly into business processes has been part of a vital industry discussion recently about making social networking more connected to -- and therefore more beneficial to -- our daily work. Thus these new functional solutions -- which cover the gamut of common workplace processes -- separates SAP's approach to social from most other general purpose social business solutions, which provide social in one place, but don't really get into the specifics of what an organization actually does. As you can see from the diagram above, SAP will provide situated social solutions across customer, employee, and supply chain/partner engagement. This includes opportunity management, marketing campaign management, social customer care/support, social HR functions like learning, onboarding, and performance improvement, and eventually supply chain management, including bidding, vendor collaboration and ideation, and more.
  
  Sameer also indicated that exception handling, a particularly high value social business use case according to industry thought leader John Hagel, will feature promently in these function solutions, such as collaboration around financial projections.  First up is SAP Social OnDemand, which uses analytics to turn social media conversations into business insights. This solution is aimed at helping marketing and customer service organizations engage with customers in order to increase brand loyalty, manage risks to reputation, and take advantage of new business opportunities.
• A modern and up-to-date vision for social business. As we'll see in my final analysis, SAP has done one other thing that's very important. It's offers an integrated vision for social business that is holistic and consistent across the entire organization, from marketing and customer service, to workforce and supply chain, using a single platform, yet with individual yet integrated solutions that focus on the unique elements of what each part of the business does. SAP's strategy and products around Jam and its associated functional tools is also designed around close and sustained engagement with the real-world, which I'll explore more in detail momentarily.

From an analysis perspective, and from my brief tour of the product yesterday, I can conclude that SAP is seriously attempting to provide an effective solution that's aimed at what the industry largely believes are the remaining gaps in making social business perform at its best. It's hard to say however, given how many companies have already adopted some form of social network or set of social tools, if there's a lot of room for major new entries. Yet I suspect, at the very least, given the careful intent to get deeply into what companies do using social engagement (and its enormous captive audience of installed base), that SAP can get some big wins and stay there.

Jam and some of its related functional solutions will start coming available starting in November is my understanding and will work on-premise, in the cloud, and in hybrid configurations. Pricing is unannounced but I was led to believe in my conversations yesterday that it would be very competitive.

Evolving the Big Picture of Social Business

SAP's vision for social, part of which you can see in the slide above, is a view that we're starting to see more and more often as companies begin to think more holistically about the new social channels that surround them and reconciling with the increasingly empty legacy channels they have. In this new view, engagement is the fundamental process that matters most and gets work done. Engagement is also where companies have now realized they need the most improvement. SAP's vision slide above shows that analytics and engagement tools are required to make use of these new channels. Customers, employees, and partners are all connected together in a useful way that ensures business processes are the focus and use social to create an absolute minimum of friction in terms of lack of information or a connection to the necessary resources or people to get any given piece of work done.

So, broadly, we see that in order to address the main objectives of social business, namely a much better connection between people they need to work with and the information they need to have, we see that we need two big operational elements place:

1) A virtuous engagement cycle that is grounded in listening and filtering of the entire social world for that organization's relevant interests, and;

2) The ability to engage in scale, with any conversation inside or outside the organization, in any engagement channel (social or not) in order to meet business objectives related to its functions (marketing, sales, product development, customer care, operations, recruitment, supply chain, etc.)

In this way, SAP's vision provides some of the key working elements for this revised and updated take on social business in a couple of crucial ways. This includes making analytics and engagement a first class citizen, as well as bringing social engagement to various individual business functions (something they will do increasingly over time.) What's less clear yet is whether they can make this vision scale up to the size of the full social business universe for all functions. But then again, that's the central challenge that we all have now.

Founded in 2009, the the Social Business Council is a peer community of those working on realizing social media within their organizations, and its focus in particular is large enterprises. It periodically shares its data from members publicly, and the latest report is a snapshot of organizations in North America and Europe.  Disclosure: I currently work for the Dachis Group, the company that owns and operates the Social Business Council.

While much of the talk in the industry lately has often been of the imperative to become a social business (take the Dreamforce event last month as a prime example), the report leaves little doubt that social media has broadly moved into the enterprise. However, it also paints a picture of the trials and tribulations that comes as an integral part of the package when it comes to achieving social business adoption and transformation in large, distributed, global organizations.

The answers to many of the questions were graphed in the report and provide a highly useful snapshot into the state of the art with social business. Perhaps even more useful were the freeform responses allowed to provide additional -- and often more nuanced -- insight into how social business is faring at these organizations. In fact some of these are highly illuminating and were both positive and significantly less so.  Good examples of freeform responses in the report include:

[Our enterprise social network] is growing, but extremely difficult to grow beyond 50%. Change management and investment of resources to handhold the remaining audience for adoption is not available.

And this from one of the more successful participants:

It is changing the way we work and truly flattening the organization. Trust and transparency are key to the success of this effort.

Perhaps less sanguine was this response:

As one of the advocates for the installation of the platform, it is frustrating how it is not being promoted internally. Its akin to having a telephone system installed where only 10% of employees get a phone or are even told about the existence of phones!

While the report itself provides the best details, some of the questions surface important snapshots of what is actually happening within companies as they adopt social business approaches. A case in point: As I've cited many times in my talks and workshops, perhaps the biggest question I'm getting about social business these days is about who should 'own' social business in the organization. While I believe the short answer is having a centralized support resource (with full time staff, community managers, and management authority to govern the effort) that empowers and enables decentralized uptake and action across the organization, the council survey paints a picture of what's actually happening today, as seen in the chart below:

Based on the survey data, IT departments far and away control and own the social business environment within most organizations (74.5%). Coming in second is Corporate Comm, at 38.2%. Knowledge management, marketing, and other groups round out the major areas that own the platform where social happens in their organization, but represent a small minority of respondents. While multiple responses were allowed, and it might not seem surprising that IT should own the technology component of social business, it does highlight a signature challenge with social business: That social often becomes just another software roll-out project. Why is that an issue? The report emphasizes that the cultural and change management issues are just as important as the technology adoption:

The challenge with introducing social collaboration software is not limited to the new technology itself, but rather with introducing new modes of behavior for corporate employees. Early adopters repeatedly emphasize how the cultural aspects of the social collaboration journey are far more rigorous and demand serious attention.

This is a realization that is still underappreciated, even as it's well known among social business practitioners, namely that social both requires and causes often profound changes in thinking and working in those that adopt it. These changes may not align well with parts of the organization that haven't gone through them and makes social media a real challenge to meaningfully adopt in some companies. That's not to say there isn't a lot of value in doing so.  With sources like McKinsey's new report on social business famously claiming there is $1.3 trillion in total economic value to be claimed by companies that achieve strategic adoption, you can bet that the challenging yet highly promising road to social business will continue to be followed.

Related: Social business and enterprise usage: The lessons

Finally, the report also zeros in on the level of engagement, which highlights another important social business topic, the use of tools that many often feel are optional. The chart belows shows respondents' reported level of engagement. Just 9% said they had over 50% engagement, while the 34% says between 30% and 50% of users logged in to the social network internally. As we can see from the social business success stories I explored earlier this year, companies like BASF report substantial and highly useful levels of adoption, but it often falls well short of the entire company.

In my explorations of social business adoption, global companies typically have this challenge. Because they're large firms that have many divisions, subsidiaries, and far-flung regional headquarters, there are many corners in which users might find themselves where they have little knowledge or connection with company's social network.

We should also remember that e-mail has the same issue.  Many types of workers, particularly hourly ones, aren't issued e-mail credentials either, depending on the tasks they perform. Seeking 100% adoption in these cases isn't the goal, not does it need to be. Instead, it should be adoption that has sustained and meaningful business impact. From my experience, and borne out time and again in the case studies we captured in Social Business By Design (John Wiley & Sons, 2012), high-levels of adoption are not necessarily required to get impressive business results.

So, in short, large companies are rolling out social networks, they are encountering challenges that include cultural change, limited resources, and the sheer length of time it takes to effectively engage at scale across an entire organization. That said, the report stresses that members feel their their efforts are a success overall and -- perhaps most importantly -- that all of them are continuing their social business journey.  For the largest and/or most complex organizations, it's now clear that road to becoming a social business will take many years, but one that is increasingly seen as a required move in order to grow and evolve while remaining successful and sustainable.

Whether or not you actually believe this vision generally depends on who you are.  There are certainly still some skeptics about social business, despite a growing number of success stories (and some cautionary tales.) SaaS itself is certainly less controversial and a foregone conclusion in many enterprises for non-mission critical functions. The broader vision of cloud -- as a place where our data, software, infrastructure, supply chain, customers and even workers reside, all on-demand -- is finally taking shape in IT circles and lines of business alike, though generally more slowly and steadily that vendors might have us believe.

Related:

• Salesforce.com's Dreamforce '12: By the numbers
• Salesforce demonstrating great momentum
• Dreamforce: Innovation among the internet of things and customer stories
• Salesforce's Benioff talks Facebook, LTE and more
• Sir Richard Branson dishes business advice at Dreamforce '12
• Salesforce launches Chatterbox, Identity, incremental updates

Those in IT whose responsibility is connected to business continuity or operations have nightmares about the loss of control, security concerns, manageability, and governance of the whole SaaS, social, mobile vision of the cloud that seems to be forming. Those on the business side worry about these issues too, but generally much less. What does seem clear is that we're on the verge of yet another shift in the technology landscape. Our software and data is finally becoming highly integrated in a way we couldn't imagine 5 years ago.

As we've seen here at Dreamforce, the future of cloud, mobile, and social are heading for new levels of maturity, depth, capability, and interconnectedness. We can also expect the apps and suites of the near future to be layered with big data-style analytics and dashboards so you can actually understand what's going on. Intelligent context is also arriving as a force and major feature of enterprise applications, allowing solutions to connect to and query a variety of data sources in the background to make work better as it happens.

All of this is seemingly impressive and compelling, analogous to the work Apple is doing with iOS in integrating a blizzard of modern yet complex functions into a relatively seemless and usable package. In fact, I've likened social networks such as Chatter as a social 'operating system' of sorts for enterprises.

But that's not all. The user experience of enterprise software is growing up too. Most of what I saw on stage this week at Dreamforce had polish and an end-to-end, soup-to-nuts feel of completeness to it, even substracting the fact that the presentations were carefully packaged and rehearsed. This is something I'm seeing in next-generation enterprise software suites in general (though less so from traditional vendors), but not until recently in the social business space. It's very encouraging and an important milestone.

I look forward to seeing customers that move from struggling with hard-to-use enteprise software to modern apps that offer highly usable consumer-style user experiences.  Consumerization of IT has had an impressive impact in improving user experience and setting the bar on how easy things like data integration should be.

Cloud and SaaS grows up, but are enterprises truly ready?

Yet the tension remains between the cloud and businesses today. The cloud is bigger, richer, and offers more variety than any IT department ever could (by many orders of magnitude), but at its core it's always someone else's show. Any enterprise that joins up merely adds itself to a truly vast entity, becoming only a very tiny part of it (ironically in much the same way an individual customer has very little influence on a large company.)

As I wrote last year in my analysis of Marc Benioff's social enterprise vision for its customers that 1) hosting in the cloud and 2) its original roots primarily as a sales tool might hinder broader adoption of its solutions by large enterprises. Based on what I saw this week, the latter issue in particular is steadily disappearing as the company has made many acquisitions in adjacent spaces and seem poised to successfully integrate them well beyond its original vision into marketing, customer support, HR, and more.

From this perspective, I think the company is both poised for much-needed horizontal growth into a larger space, as well as a harbinger of what's to come: Highly integrated turnkey enterprise solutions that make it easy to onboard, adopt, operate in a deeply connected cloud-based business environment.  In particular, the point made at the keynote session yesterday that marketing has largely been a bucket of unconnected solutions in most organizations and is ready to grow up into real enterprise solution, like ERP and CRM, is probably correct, though harder in practice due to the inherent innovation and outside-the-box thinking that's typical of the space.

Yet perhaps the most important subject in all this is the maturity of the social business space itself. Social marketing and social workforce were the earliest areas where social media first moved into the enterprise. Both of these functions have experienced a tremendous amount of activity over the years, with resulting lessons learned that have led to a second generation that is more mature, integrated into the business, and cross channel.  Along the way, social CRM, social HRM, and social innovation have emerged as significant industries in the social business space as well as more parts of our organizations became social.

Just as importantly, the industry has also provided us much needed supporting capabilities that we discoved were essential for using social media effectively in the enterprise. The two most important of these are social analytics and social media management. For its part, social analytics have given us a vital feedback loop needed to access the ROI, while the latter has provided a toolset to ensure enterprises can actually exert essential control and oversight over their social business functions across the business.

Related: The convergence of mobile and social: The next IT battleground

Social moves beyond functional silos, gets strategic

In heartening to see all of these capabilities come together in the next generation of social business offerings. Salesforce is a great -- but by no means the only -- example here and it's obvious now where this is all heading. Between Chatter, Work.com, Service Cloud, and Marketing Cloud, along with the analytics capabiities provided by Radian6, Salesforce is coming close to offering just about every major social business functionality required by the modern enterprise in a consistent, integrated, cloud-based, mobile-enabled way. This sets the right bar for the industry and genuinely helps us move our organizations forward with social business.

The top issues in social used to be simple: Understanding and articulating the business case, attain early adoption, and figure out the high-value use cases. With the rise of coherent social business suites (Jive and IBM are close and in some cases ahead with this vision) that get us beyond the tactical issues of cobbling together technology, we can now tackle the social business issues of today, namely measuring and optimizing ROI, better integrating social with our business processes, strategically organizing for social business across the enterprise (instead of primarily in functional silos), and engaging with the world at scale.  While we have many challenges lying ahead of us as we learn to tranform our cultures for a more connected, open, transparent, and participatory world, I think we've finally moving into a place where our actual capabilities can at last match our needs and vision for social business.

That's not all either. As a social networks get larger in size and longer in the tooth, they must add employees and venture capital firms to the mix as well, who want good returns on their time, effort, and investments.  These groups end up pulling the business in different, competing directions. However, the tension resulting from the cross-purposes between all of these constituencies isn't really surprising. After all, social networks -- like businesses -- are themselves made of people. Differing agendas, objectives, and priorities are part of the mix, like any community of individuals.

But of all these, it's developers and advertisers that are coming into focus recently as moves by popular social networking services such as Twitter have begun alienating the former as they appear to proactively cater to the latter.  In particular, this week's scrubbing of 3rd party app source names from tweets means that Twitter is essentially white-washing its developers' app presence from its feeds. What does this mean exactly? Going forward, when one posts to Twitter from Hootsuite or Tweetdeck or Instagram, no one will be able to tell which app was used.

While the source of the app that posted a tweet may not seem very important to users, it's critical for a developer that has spent their time and money creating a new type of Twitter client and relies on its visibility to succeed. And this where the rub is, because developers were arguably instrumental in building Twitter into what it is today. When I talked with Alex Payne, Twitter's API lead, back in 2009, he reported nine out of 10 users of the entire service were already using 3rd party clients to post and consume tweets. Developers had literally became the public face of the service for most users. What's more, they helped provide the myriad user experiences and features that no single company could provide by itself.

Related: Twitter edges out third party clients with tighter API rules

Now that the service is enormously popular, with over 500 million registered users as of this year, Twitter apparently wants to deal itself back into being the primary intermediary with the user. Increasingly restrictive rules for what developers can do continue to be announced. For its part, Facebook has also lowered the boom several times on those that helped build it out in its early days, when they needed every 3rd party app they could get back in 2007 to propel them past MySpace, the market leader at the time.

Of course, as I observed as Facebook prepared to go public, the dual opposing pressures of protecting customer privacy while endlessly inventing ever more sophisticated ways to monetize their data was going to be a tall order indeed. For the most successful social networks today, both of these issues will ultimately end up penalizing 3rd party developers that have invested in the platform. At the same time the host social networks will end up trying to preserve the most valuable aspects of the data only for themselves.

Those who've following my writing over the years knows that I'm quite bullish on strategically using open APIs as a way to scale partnership and harness innovation as cost-effectively as possible. It's a brilliant strategy for startups, and the smart use of open APIs directly led to the success of Internet giants such as Amazon, Twitter, and Facebook who've all used them to rapidly create marketshare, network effects, and vibrant partner ecosystems. Today, few startups launch without an API coming a short while later. But the end game for 3rd party developers seems increasingly bleak for social networks, at least how the services are designed as businesses today.

Where will the innovation in social go?

Then there's the issue that the current social networking monoculture, where the vast majority of people are using a few large services, hasn't changed much recently. Because of this, I think a strong argument can be made that they have inherently begun to limit innovation and create stagnation in the marketplace as they attempt to consolidate control. But with the recent provocations to developers (API restrictions) and users (privacy concerns) and the rise of a some compelling competing services, it may not be situation that lasts very long.

Declan McCullagh over at CNET summed up the situation well earlier this month:

Facebook and Twitter have gone out of their way to alienate the developers who helped make those two companies' upward trajectory so steep. It's not malice: rather, it's a business model that's morphed into becoming a one-stop-shop for users combined with big media deals like Twitter's Olympics partnership with NBCUniversal. (Put another way, just as investors worry about currency risk, app developers run a platform risk.)

Yesterday afternoon, for instance, Twitter slapped new restrictions on developers who make apps like HootSuite, Tweetbot, and Echofon. Their user count has been capped: if they have, say, 10,000 users at the moment, they can't exceed 20,000. There are new display guidelines that turn out to be mandatory, with Twitter threatening to "revoke your application key" -- the Twitterverse's death penalty -- if they're not followed.

Unfortunately, even just the talk about suffering a social networking "death penalty" is enough to make loyal business partners -- which is exactly what developers are -- think twice about investing any more of their funds, time, resources, and reputation into someone else's ecosystem, for it all to be taken away capriciously.

Users themseleves largely won't care much about this situation, unless their favorite 3rd party app is restricted in some way. But they're increasingly wary of their private data being held captive and exploited.  This is confirmed by the new Wave 6 report on social media usage in 62 countries, which noted recently that concerns about how much of their personal data is kept on social networks upticked sharply in the general public.

While the current monoculture of major social networks seems unlikely to change soon -- note: there are still nearly countless (and growing) numbers of minor ones -- the rise of Pinterest in the U.S. and Sina Weibo and Renren in Asia, shows that there's still room for more.  As large social networks cater less and less to the 3rd party developers that helped make them successful, this will create openings for hungry new social media startups willing to tap into the crowds of developers looking for easily tapped fertile new ground.

However, it still remains to be seen what a developer backlash will truly mean, other that shifting developers into creating their own social networks. In fact, one of the more interesting experiments along these lines is the new service App.net, which is a new Twitter competitor that claims to put users needs first and foremost. Note: By users it seems to means both end-users and developers, a smart move in my opinion.

App.net story is interesting and is riding the crowdfunding trend, meaning that it has legs from real people who are putting their own money into it. The service recently raised over $800,000 from over 12,000 contributors.  More importantly however, is that there are already over 40 mobile and desktop apps available after only a few weeks, showing a similar developer appeal as Twitter did in the early days. How will they make money without being beholden to advertisers? Users must pay to reserve their user profile and developers must do the same for API access.

What makes it special though, is that App.net is a new way to structure a social network that doesn't have the inherent contradictions that the major players have now.  Whether it is ultimately successful or not, I suspect it'll help prove that there are alternative -- and perhaps much better -- ways to design the business models of large-social social network services.

Related: Should companies drive their traffic to Facebook?

How do we resolve the tension between user privacy and data exploitation?

So what are the real lessons here? One, that social networking is a business, just like any other. It must have revenue to pay for the servers, talent, and network bandwidth to scale up as it grows, just like any cloud offering. Second is that long-term data ownership and control represents the competitive landscape of the 21st century.  Finally, the first and second points make an extremely slippery slope from which ultimately even the best market leaders can fall.

I think the juggling act to ensure users, developers, advertisers, and the service itself are happy (you guessed it, pick two) is going to be a painful one to watch play out in the social business era. Perpetuating the current model practically invites responsible entities, such as governments, to create a patchwork of laws and regulations to try and solve the problem. Not surprisingly, these laws and regulations already exist in many countries and more are likely. In fact, success may ultimately be only be achieved by a few adroit and savvy companies that can find a new way forward. Organizations betting on social can learn a lot from watching all that happens here.

The numbers speak for themselves when it comes to the recent mass migration of the global population to smartphones and social media. The majority of the developed world now uses both, with just over a billion smart device users worldwide currently according to estimates, and approximately 1.4 billion users of social media by the end of this year. Many of these users are also in developing nations, and have begun to employing a combination of mobile devices and social media to realize significant -- and occasionally momentous and inspired -- changes to the world around them.

In terms of meaningful real-world impact of these technologies, mass self-organizing activity of all types has been enabled and greatly amplified by social media, mobile devices, or increasingly both (see Arab Spring, Kony 2012, SOPA, the Nigerian Constitution, and many other recent examples.) The reach of today's global mobile and social networks, combined with motivated users and applications that explicitly tap into what makes them uniquely effective (read: the fundamental power laws of networks) are creating a growing level of genuine change in the status quo of politics, society, culture, government, and business. Though certainly, there's still quite a journey ahead.

The root causes of this mass collaboration phenomenon are deep and tied directly to the relentless pervasiveness of new types of networked devices and applications. Now a second shoe seems to have fallen as well and it's a crucial one: The world at large is starting to wake up to the fact that we're all connected together, continuously, to everyone else in the world. What's more, we're now figuring out ways to optimize and make the very most of this fact, one almost certainly unique in all human history.

Geography, cost, time, discoverability, and even language have largely fallen as significant obstacles to communicating and collaborating with everyone in the world. Or perhaps more importantly, at scale, with any community in the world.

Both social and smart mobile devices have directly had a large hand in reducing these barriers to practically zero because of their innate network effects and ease-of-use.  Mobile apps and app stores have also done much to put the powerful new services in everyone's hands, while social media has simultaenously connected the world's population together in ways we almost entirely craft ourselves, to such an extent now that the Web itself is perhaps at risk of becoming outmoded as the most important global venue for information.

The impact of smart mobility and social on the enterprise

These same changes, as far as they sometimes seem from the halls of our local IT department, has long been taking place in our organizations, though they're more pronounced now than ever.  I've explored in the past the topic of shadow IT, a fast growing phenomenon best described as the cloud becoming a more appealing and far easier place to source applications, information, and just about anything else one needs to get work done. Rather than going through official channels to get what you neeed, that is. Browser-based applications (SaaS, Web apps), search engines, app stores, and social networks are just a few examples of channels far, far larger, richer, and more useful when they're outside the organization, as opposed to to the local and often quite limited technology landscape of the typical organization, even today.

Related: Shifting IT delivery to tablets: The strategic issues

It's no wonder then that Gartner predicts that over a third of all IT will come directly from such sources soon, rather than official corporate IT channels. Businesses must adapt to an increasingly fast pace of technology change, which in turn is pushing the business world to change more quickly as well.  Specificially, this ranges from an onslaught of competitive new products and services to how customers are marketed to, sold, and supported.  Business users are tapping into the best technology resources they have to drive local improvements, and this includes the latest and most popular channels where the world is spending time (for example, social is now the #1 activity online as of 2012.)

Organizations looking to stay current and relevant are scrambling to address the current and near-future digital landscape, which will be the primary way most companies engage with their customers, workers, and even their supply chain. I've dubbed such proactive organizations next-generation enterprises, which are companies that don't wait for disruption but seek out and add each new major technology development as a key tool to improve how they exchange value with the world.  As part of this adoption challenge, mobile and social have now become top concerns for many companies this year, even if they're unsure how to best apply them to their business.

Mobile and social colliding as much as cooperating

However, it may not be so easy to reconcile the current state of smart mobile devices with social media. Never mind that a large percentage of mobile apps are already social (with sharing buttons and close integration with Facebook, Twitter, Dropbox, etc.) Most organizations ignore the increasingly vast array of sensors in smart mobile devices that makes it even easier for the social applications collapse space and transport the real-world over the network in useful ways. I see that most business overlook the fact that mobile devices are essentially based on proprietary platforms that we have little control over. All of these are key issues with mobile/social convergence.

In fact, I'm surprised by how many companies still block Facebook (up to 67% by some estimates) and Twitter, essentially driving their workers onto their own IT systems -- usually mobile devices -- to talk with customers, prospects, industry colleagues, and co-workers in social channels. (Though in countries like China, social networks such as Weibo and Renren are more relevant, but not yet a prime integration target of mobile platforms vendors.)

Related: Will Apple's partner approach trump Google in mobile?

But despite the growing of integration of social networks into the operating systems of mobile devices -- Apple is the leader here with support for Twitter, Facebook, Yelp, and others -- there is a number of fundamental issues in conflict that have significant implications for companies that must make the shift to mobile and social in a way that preserves what matters most to them.  Yet, even though I see the shift to mobile as the #1 priority with most CIOs currently -- there's not always a full appreciation of the extent to which social is intertwined with it.

Top 6 implications of mobile/social convergence

For those tracking the collision of social and mobile, here seem to be the biggest issues:

• Convenience and reach. Mobile devices will soon become the main way that people use social networks. Your enterprise social strategy, both internally and externally, should now be mobile-first, even though you can't forget legacy devices yet or even any time soon. To help, here is one of my most detailed explorations of how to reconcile social business and mobile service delivery.
• Challenges of social on proprietary platforms. Unlike the open standards of the Web, mobile applications are based on proprietary technology. Whether an organization is building its own apps or 3rd party apps, there will be a tension between the lack of standardization, platform lock-in, and vendor competition that will impact the openness and transparency that makes social media so effective. Facebook's difficulty in opening up its platform on mobile devices or engaging in effective advertising are good examples of such constraints.
• Mobile sensors will drive innovation and business value. Smart mobile devices aren't laptops that are lighter, they have a rich set of new sensors (compass, GPS, accelerometers, gyroscopes, multiple cameras, NFC, and more) with operating systems designed to take advantage of them. This can enable many interesting business scenarios such as multiple-point video chat ala Google Hangouts, transcripted recorded of meetings, voice integration with social media, and many other communication advances. While unified communication platforms are focusing on these even more than enterprise social media, both will ultimately take advantage of it to drive productivity internally and better engagement externally, such as with social customer care.
• Mobile apps integrated with social networks. Put simply, non-social apps are getting connected to social networks, mostly public ones for now, but also enterprise social networks when it makes sense (see my recent discussion on OpenSocial for details on how this is happening now with social -- but not mobile -- applications.) The IT world has recently learned that enterprises must connect their systems of record to their systems of engagement to get maximum benefit of both technologies. Unfortunately, mobile application integration with social networks has not yet progressed much beyond the OAuth phase and this is going to be a growing issue in keeping a level playing field.
• Digital business models shift to mobile platform providers. Those who own the platforms make the rules, and this has proven the case with mobile platforms when it comes to business models. App purchases, in-app purchases, advertising, and more are all under the strict control of Apple, Google, and other mobile platform owners. Those looking to monetize their mobile services will have to closely work with them, unlike the Web, where any business model that is legal (and sometimes otherwise) is potentially viable and under the control of who creates it. As companies seek to turn IT into a profit center and use new digital channels to operate their business, the vendor-imposed rules of mobile platforms are going to become a greater issue.
• Information flows more potent, yet harder to control in converged social/mobile. Social networks and mobile apps provide higher levels of reach and scale, yet makes it much harder to control the information that moves within and across them. As it was with Web 2.0, control of hard-to-create data will be as important as ever but even more challenging given how quickly and easily information can be spread, copied, and lost. Organizations will have to become ever better strategic data managers and experts in Big Data techniques to make the most of mobile and social channels.

The constraints yet enormous power of next-generation mobile platforms, combined with the shift to social channels -- both inside and outside of organizations -- is going to be a major test of IT departments, who have to do a double upgrade of their skills, technologies, infrastructure, architecture, and support capabilities to order to embrace both effectively.

In addition, and just as challenging for IT, the more profound and impactful benefits of social/mobile will ultimately come via the shift to digital business models that take tap into the mass self-organizing (aka social business) aspects I cited earlier. However, if organizations focus on the major issues -- most of which I believe are summarized above -- and are willing to invest appropriately, I believe mobile/social convergence will have limited negative impact and considerable upside. Those that ignore the issues, however, almost certainly have a painful learning curve ahead.

What issues are you running into as your organization goes mobile and social? Please share in Talkback below.

But these large numbers tend to obscure the fundamental changes that currently seem to be taking place under the rubric of big data.

The first of these is the data-first ethos that's embodied by trying to tap into and process ground truth (by seeking out the best raw data) and then deriving insight from what is uncovered (domain-specific business intelligence), rather that trying to find data to support one's already-completed strategic decision making.

One of the better known examples of data-first thinking is the famous "Moneyball" story, as told in the 2003 book by Michael Lewis, relating the story of how the Oakland A's bucked tradition and switched to heavy data analysis to identify their highest performers, with considerable success. Though only one data point, this story -- and a growing list of others -- are leading many believe that data-first thinking may be the solution to many long-standing problems to help combat everything from crime and disease to pollution and poverty.  It's also perhaps the key to resolving somewhat more mundane challenges in our businesses as well.

The second major change is the shift away from the relational data model as the definitive standard for how to process information for the first time in over a generation. To be sure, the growing adoption in customer-facing technology of emerging platforms such as Hadoop and NoSQL-style databases, is still most prevalent in Web startups and consumer services. Yet the peta and exa-bytes of today's data volumes in many business contexts practically demands technologies that scale well in the face of unrelenting datasets and shrinking time scales that are growing exponentially.

For a variety of reasons too long to enumerate here, the relational model has at long last encountering both a serious challenge to its hegemony as well as real challengers that can frequently do better at handling todays data volumes and types. And though many organizations will continue to use relational technology to create some of their big data solutions, it's no longer the only option, particularly as the growth in unstructured data is now much faster than classical structured data.

The third change is the move towards making big data a more operational component of the way organizations work and how externally-facing products function. While data scientists are often required to get the best outcomes, the results of their work are often applications or data appliances that are usable by just about anyone. Just like Google enabled the layperson to query the entire contents of the Web with a few keywords, the next generation of enterprise big data seems to be about connecting workers with the data landscape of their organizations in a way that doesn't typically require IT wizards in white robes. Thus business solutions based on big data technology must be a readily approachable end-user technology for the average line worker in order to have a sustained and meaningful business impact.

Related: Bursting the Big Data Bubble

The data points on enterprise adoption of big data

Let's take a look at what organizations are actually reporting when it comes to big data implementation and usage today. Looking at a broad cross section of companies both large and small, the O'Reilly Strata Conference survey published a useful breakdown this year of what its attendees were doing with the technology:

• 18% already had a big data solution
• 28% had no plans at this time
• 22% planned to have a big data solution in six months
• 17% planned to have a big data solution in 12 months
• 15% planned to have a big data solution in two years

Admittedly, attendees of this particular conference were more likely than average to be adopters of big data, so these numbers are a little optimistic, even given that big data is a big tent for a great many technologies that handle large data volumes and analytics.

However, the story becomes even more interesting when we look at specific sectors. For example, the insurance industry recently reported that 15-20% of insurers are actively preparing for big data solution. Government, one of the larger potential beneficiaries of big data according to the seminal McKinsey report on the subject, is itself experiencing relatively slow adoption, with a recent survey of public sector CIOs and IT managers reporting it will take three years to start processing their data this way. If we look at function, instead of industry, we can see that sales processes are likely poised to be revolutionized by big data. A recent analysis by CSO Insights reveals that 71% of companies expect big data to have a significant impact on sales, despite only 16% currently doing so, a gap that many organizations will clearly want to close.

Related: The enterprise opportunity of Big Data: Closing the "clue gap"

However activating on the large set of changes that big data entails will clearly happen incrementally, yet broadly, in most companies. There's technology, process, infrastructure, and management that all has to be put into place, plus the hiring of data scientists that understand your business (or learn to), as well as such still-esoteric concepts such as DevOps, which will marry the operational aspects with the development aspects of big data to quickly solve business problems by applying data-first analysis combined with just-in-time R&D and deployment.

In addition, companies will also have to deliver on a big data "stack" in the enterprise. This stack will invariably consist of the following components, designed out of a conglomerate of open source software, commercial applications, on-premises and cloud infrastructure, combined with data from just about everywhere. The visual above also depicts this notional big data stack and you can see another, more technology and product-specific view I pulled together last year.

Breaking down enterprise big data

• Technology. In general, these seem to be breaking down into three major families, two of which are new and one of which is legacy. There are Hadoop and its variants, the NoSQL family, and relational databases which have added big data features.
• Infrastructure & Development. This includes Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), Data-as-a-Service (DaaS), Open APIs, DevOps, and data scientists, the latter which craft solutions from an array of internal and external components from this palette.
• Big Data Applications. This list of popular application models for big data includes business intelligence, social analytics, decision support, visualization and modeling, behavioral prediction, and business process optimization (BPO), but there are many others..
• Domain-Specific Solutions. Once the big data tech, infrastructure, and app are in place, businesses must focus their efforts on extracting industry-specific value for them. Top industries and/or functions for big data (ones most likely to benefit) include marketing, R&D, scientific/technical/engineering/mathematics (STEM), health care, financial services, retail, and insurance.
• Big Data-Powered Business Processes. To be useful, big data solutions must then be incorporated into an organization's business processes including operations, line of business, and support functions. In particular, the high-value and common business processes will provide the largest ROI.

To summarize all this, it's still early days yet for this era's growing data deluge. In fact, one of the best quotes of the year about big data is from Ben Werther, who recently observed that we're still "in the pre-industrial age of big data." Most organizations aren't yet doing it at scale, but the writing is on the wall that significant competitive advantage can be had for those that want it. As I predicted earlier this year, social analytics will be one particularly bright spot in big data this year, and organizations already have a good array of tools and vendors to pick from.

Ultimately, the biggest challenge will be in integrating big data effectively into updated and revised business processes. Thus again, change itself will be the large overall obstacle as technology out-paces the ability of most organizations to absorb it. This will likely push big data into the cloud for most organizations look for strategies to speed adoption, further hastening cloud-related migration of so much of IT. This may not be a bad thing.

Yet it's still a giant industry and remains relatively healthy overall. It remains the case that it's the enterprise where the big value -- and money -- in software lies. In fact, the latest data from Gartner puts the global enterprise software industry at $120 billion in 2012, which in contrast to IDC they put at 4% growth from last year overall. ERP, office suites, business intelligence, and CRM round out the largest individual categories for software at the moment. Interestingly, SaaS and cloud, which get an inordinate amount of press compared to traditional software, will only account for about 13% of software spend this year, showing steady yet relatively modest growth.

So, what specifically are the hot spots in software this year? In addition to virtualization -- a technology primarily used to improve the cost effectiveness and agility of data centers -- the two shining lights in the industry will be in areas where social media plays heavily: Enterprise social software and team collaboration applications. However, as any actuary will tell you, growth is much easier (and less significant to the market) if you're a tiny industry. So the question is, where are we with the overall size of the social software industry today?

To help with this, IDC recently released numbers on this as well, projecting "strong" 40% annualized growth from 2011 through 2016, going from less than $800 million to $4.5 billion by 2016, ultimately making the Enterprise 2.0 industry nearly half the size of the CRM or business intelligence software industries.

Related: CRM investments ramp due to social media and smart mobility

While this data does not necessarily come as a surprise to myself or others who follow the space, it does show that social software is finally coming its own and becoming a respectably-sized industry, even if it won't exactly break into the top 5 anytime soon.

Yet the Enterprise 2.0 landscape is also a highly fragmented space with only a few key leaders -- with IBM and Jive largely carving up the very top end of the space -- emerging in recent years. I tracked a vast number of commercial and open source Enterprise 2.0 offerings a few years back and not much has changed since then.

Social software grows up, gets practical

These days the market leaders in enterprise social software tend to be established, stable, and have increasingly complex and sophisticated offerings that can meet the diverse demands of large, global organizations. While there's long been the notion that it's the very simplicity of social software is what makes it emergent and able to adapt to the vagaries of community requirements and business needs alike, two factors seem to be driving an increase in variety and richness.

The first factor is the maturity of the social media space itself. It's now expected that social software have activity streams, rich user profiles, groups, blogs, wikis, microblogs, forums, analytics, connection to common business apps, security features, APIs for integration, seamless external/internal functionality, and much more. This has finally led to an arms race that only the more established vendors may ultimately be able to keep up with.

The second factor is that the number of use cases for social software in important verticals and business functions keeps proliferating. Social media can now be used effectively for marketing, customer care, workforce collaboration, product development, supply chain, and so much more to reduce costs, increase effectiveness, and improve innovation. It can be used in financial services, insurance, manufacturing, and healthcare (and that's just a partial list.)

These days, many of these industries benefit from social applications that zero in precisely on what those industries do and focus on their unique aspects, for example companies like SocialWare make products that help financial services firms ensure regulatory compliance with their social software. While general purpose social software platforms can certainly be used in all of these areas, high impact application of social media to the way we work often requires application-specific constraints on conversations and the resultant community activity. This means social customer care benefits from conversations organized around support, social supply chain focused on ERP transactions, and so on, along with software that supports these applied uses.

Related: Will social software startups "collapse into the orbit" of the big vendors?

In practical terms, the implications of the first factor is that although the general purpose social software is climbing the sophistication curve and maturing, we're seeing a second wave of social software aimed at the second factor: Focused applications in specific areas of the business and industry verticals.

It's also the case that the larger and more mature enterprise social software products remain expensive when compared to new startups, and this is creating further market opportunity. The result is that new entrants are continuing to emerge in the space, driving innovation in many areas. In fact, at the recent Enterprise 2.0 Conference, it was easy to quickly find 10 new products largely by walking the expo floor aisles, which I've summarized in an accompanying gallery.

Ten new enterprise social software products

These products are typical of what we're seeing in the growing space, covering a wide range of social software needs, ranging from workforce collaboration and social analytics to marketing optimization and Social CRM. Although some in the industry may have gotten a bit tired of waiting for hockey stick growth, it's now clear that the industry continues to attract innovation just as it's poised for substantial growth in the next few years. In short, it's the exciting time for those getting started in social business today.

Coming next is my analysis of the interesting and important conversations that came out of last week's Enterprise 2.0 Conference, the benchmark event for the enterprise social software industry.

While a few companies in both enterprise and consumer social media have stood out and created their own destiny, for instance Facebook most recently joined LinkedIn and Jive as stand-alone masters of the social universe as public companies, most companies in the industry with a decent value proposition are instead going the acquisition route.

So, as the social media industry in all its forms matures, we might be seeing the broad outlines for the end game. Or, as it turns out, at least the ongoing game. Firms that offer successful collaboration software, social customer service, social marketing, and social media analytics are all currently in play or likely targets as they reach an interesting size. Yet, most don't have the kind of traction to achieve a dramatic IPO or even a major acquisition that would please their investors. In fact, I find that there are still too many social media companies and they haven't shaken out enough yet.

Yet there is significant pressure for acquirers to make moves now. Fueling these particular flames are data such as iDC's latest prediction that social software and team collaboration will be two of the three big areas that lead growth in the software industry this year. Industry leaders just can't afford not to get invested where the market has traction.

Thus, given the large IPOs that are possible for companies that can build the right offerings out the right pieces (see: Facebook) or have a desperate need to continue growing (i.e. the major software vendors such as Oracle, SAP, Microsoft, and IBM) the lack of a shakeout won't stop them. In fact, some would say it's smart to acquire companies early, when they first show promise, rather than wait until they prove their mettle and skyrocket in value, and therefore acquisition cost.

Unfortunately, this isn't always good for the acquired companies or their customers. As social media startups get picked over and rolled up by larger companies and either 1) incorporated into existing products or 2) inserted into a suite of often only tangentially related offerings to increase the completeness of it, several important issues are coming up:

A) Loss of focus on social. Many of the acquiring companies have a wide variety of product offerings, interests, and competencies. Acquisitions dilute the company being absorbed, often losing much of what make it special in the first place. The founders, often the driving force behind the startup, largely get cashed out and marginalized in the new organization. The result is blunting and erosion of the unique elements and underlying strengths of the acquired product, particularly with social software, which is very different than traditional enterprise software.

B) A retrograde shift to the old enterprise world. Many of the acquiring companies in social are traditional enterprise software vendors that are decades old. While I've worked with IBM, Microsoft, SAP, and Oracle over the years, and like and respect them, they often just don't have the sensibilities of today's highly consumerized, social, mobile, and cloudy world. It's one of the reasons that the big vendors want their hands on the exciting new startups: It's a great way to get fresh blood, even though the proverbial "pickle" (the startup) tends to be brined (the giant enterprise vendor) far more than the brine gets pickled. This is unfortunate for businesses, because we're at several major tipping points for how software operates, is sold, is delivered, and provides value.

Related: Consumerization of tech: The new enterprise disruptor

How social startups are being metabolized by the industry: A breakdown

All this said, I recently performed an analysis of the major software acquisitions in the social computing space over the last few years and came away with a few interesting conclusions. You can see a view of this in the social industry "solar system" above. I partitioned this view into:

1. "Big social", the giant public social networks like Facebook, Twitter, and LinkedIn.
2. The new guard, or the newest generation of enterprise software vendors.
3. The old guard, the long-standing firms in the space that have survived numerous generations of software innovation.
4. The startups, these are the social startups themselves, though I've only listed the ones that have been involved in acquisitions.

From this we can see that the established industry players with large war chests do most of the acquiring. For example:

• Salesforce: BuddyMedia, Rypple, Assistly, and Radian6
• Jive: Proximal Labs, filtrbox
• Oracle: Collective Intellect, Vitrue, and RightNow
• Facebook: Instagram, Gowalla, Glancee, divvyshot, Hot Potato, Friendfeed, Lightbox, ShareGrove, and more.
• LinkedIn: Slideshare, and Rapportive.

As Gartner Analyst Michael Maoz had this to say recently about how weak the majors are at the new disciplines, combined with the tendency of smaller yet more innovative startups to fall into the gravity wells of big vendors:

Don’t fight it, and don’t regret it: large vendors do not innovate at the ‘edges’ where you are seeking to best engage the consumers who buy from you. Social media, digital marketing, ad placement, content personalization, presence-based services, collaboration and social network analysis, reputation management – all are outside of the capabilities of the ‘majors’ but not outside of their price range. They will re-platform, invest money, expand the scale.

IBM, Oracle and Microsoft, and now Google, Apple and Facebook are (perhaps) the only majors with legs. The rest are likely to collapse into the orbit of the true planets. It is all ok. Eyes wide open and with a clear vision for where you are going – and you will be able to innovate most rapidly with the innovators.

Unfortunately, while this may be true and enterprise customers should expect it, it's not always the best for them.

Where are the customers in all this maneuvering?

However, what gets lost in all of this what's best for those who are customers of these companies. The pageantry and spectacle of M&A in the technology industry often takes on a life of its own. While investors want to get their returns, in the end, companies that put their customers first and foremost tend to do better than those that do not (in fact, the latest data show that leaders in customer experience outperform their industries by 22.5% while laggards underperform by 46.3%.)

In fact, many of the enterprise customers I work with greatly value startups as a way to hedge their bets with entrenched vendors. They are often quite disappointed when they get rolled up, realizing that they will become just one of thousands of customers. Worse, what made the product they used a shining light in their industry is at risk of becoming just another cog in a vast set of increasingly anonymous enterprise offerings.

What are companies to do then? With the increasing disposability of software in an app store supplied mobile IT landscape and frequent lack of leadership from IT when it comes to social media, organizations need to place well-hedged bets. The constant parade of vendors won't matter as much. Businesses therefore must assume that the software landscape is much more fluid than it has been even in the very recent past. New players will come and go more and more quickly, and companies must start focusing more on open standards for social software (both data and interoperability) and less on specific vendors, in order to retain flexibility and agility.

Related: Reconciling the enterprise IT portfolio with social media

In the meantime, social media is seeping in around the edges into the architectures of our organizations in a major way. Portfolio management and rationalization of social media solutions will soon become the next big challenge. At the same time, even though I tracked over 100 major social business solutions back in 2009, I'm now seeing as many new startups in the Enterprise 2.0 space as I did back then. Innovation and entrepreneurship in social business both are picking up, not slowing down.

In my next post, I'll explore these new emerging points of light as we head into the Enterprise 2.0 Conference in Boston next week and lots more news in this space. I'll post as much here as I can, in the meantime you can also catch my workshop on next-generation enterprises there, or come to the book signing for our new management book, Social Business By Design, sponsored by MoxieSoft.

It’s ... dumb to keep driving traffic into Facebook. You should drive traffic to your sites and your communities by pulling from Facebook into what you’re doing. That way you have control of the data and make sure that you’re not just selling stuff back to Facebook, which you’re going to buy again.

While most companies are not in fact dumb, just digitally inexperienced, there's a vast wealth of strategy inherent in these few simple words. First and foremost, the challenge that many companies have with moving to social is that they regard it much like they did digital when they first encountered it: As a tool to use in the same way as existing non-digital methods. So mass mailing became mass e-mailing, brochures became company Web sites, and ads on billboards, magazines, and TV became online ads, and so on ad infinitum. Most companies are at the same place with social today.

Much has been made over the years about the two way medium of the Web and how it inherently transforms the relationships companies have with their customers. That's because it creates sustained contact and engagement with the marketplace that can be used in many valuable ways. From the first inklings in the Cluetrain Manifesto over a decade ago to the now global revolution of the social Web today, large companies have generally received this signal very poorly, and when they do, it's been the proverbial paving of the cowpath, meaning they move to the new channels and then just continue to do what they did before, the old way.

So if companies must now be social in order to reach their customers and the marketplace, shouldn't they be on Facebook, the world's largest social ecosystem? Ray doesn't necessarily believe so, and neither do I, at least not primarily. Though the best case for engaging externally on social networks is probably on Facebook, most companies must go well beyond this to get to strategic value. The issue -- and the key to getting something valuable done -- is defining exactly when companies should engage with Facebook (or other social networks), and how. To answer this requires understanding the ground rules of network-oriented business.

Related: The power laws of social business

Understanding the strategic social landscape

Even though the Internet industry lived through revolution in detail, most companies haven't yet absorbed the principles of Web 2.0, which laid out the strategic playbook for how to assert and establish ownership of your corner of the network (or really, all corners.) One of the core principles was -- and is more relevant than ever today -- that control of data is what ultimately separates the winners and losers. Specifically, the concept says that the winners on a network will be the ones that can successfully create and maintain control over strategic sets of data over the long haul.

Thus, your strategy should be connecting meaningfully to all relevant constituents of your business (workers, suppliers, and customers), engaging in long-term digital and social value exchange over the network, capturing all the data that this activity creates, and mine it strategically for value, perhaps even letting others have limited access to it, for a price. Creating strategic data sets is relatively easy in the social world today, since most activity within it is visible. This can be captured, measured, and analyzed, allowing just about any trend about anything to be discerned and tracked. Having this data be yours -- and not having to share it with the platform you're using -- is a key to competitive advantage.

So, let's get back to being on Facebook. Giving them a front row seat, and even outright ownership of your customer's data (at least when it comes to interacting with you), is almost certainly a setup for trouble long-term. Creating Facebook pages or social experiences for your customers on any external social network means giving up control of the relationships you create in them, along with all the data they represent to companies that you have little control over. As Ray pointed out, you'll just end up paying them for the privilege of accessing your own data, and worse, they'll be able to monetize it however they like, eliminating much of the competitive advantage you could have by doing that yourself (and being the only one that could, with your data.)

Related: CRM reaches the heart of small business

But not every company can afford to create their own community or mine it for data. And this is exactly whey social networks like Facebook and Twitter can be so important: They are vast social ecosystems which can be intelligently and cost-effectively harnessed for their audiences that can then be diverted to a company's own communities for useful purposes. In other words, used smartly, they can do most of the work for us, but by taking a few simple precautions, companies can keep most of the benefit.

How to own your social destiny

In fact, the strategies for using social networks in a way that retains control and maximizes value for businesses are fairly straightforward, you just have to know the rules. More importantly, much of what most companies do in terms of their operations will be done this way in the near future. It's far better not to move your core operations to external social networks. The strategies to ensure success here are:

1. Leverage Jakob's Law. Coined by Jakob Niesen, it's one of the most important rules of social business that exists currently: You must design your products and services to reflect the fact that people spend most of their time on other people's sites. Take advantage of this by creating digital bulwarks (presence) on all social networks relevant to your business. In other words, at first, go to where the customer is today.
2. Create your own strategic communities. While you might in fact want to leave your Twitter followers and Facebook fans on Facebook, the smart move is to divert them to your own communities whenever possible. You can use the power and size of external communities to fuel the growth of your own. When possible, make social activity focused on specific business objectives (mutual support, product design, beta testing, pre-sales, etc.)
3. Design graceful on-ramps that connect external social networks to your own communities. Anything truly useful should be done in your ecosystem, so make it easy to move from your social network presence to your own communities by making it clear where to best engage with you to get things done.
4. Instrument your communities and then listen, analyze, and engage. Have a backstop that captures all the activity in your communities, store it, and use it strategically. Building capability in social business intelligence is key here, as is opening up the data to others to make use of in creative and powerful ways.

In short, it's unwise for businesses to use Facebook naively when organizations can easily create their communities of their own and control the data. However, Facebook makes it so easy to engage with customers that most businesses start there and never leave. It's easy for companies to check-in, but they generally won't check-out, however organizations prepared to organize strategically can achieve much better outcomes.

To succeed externally with social business, companies must become competent at harnessing social ecosystems wherever they find them, making them onramps to their own communities, and asserting control over the relationships and data that comes from them. They can then make wise use of them to drive their business objectives, avoid disruption, and provide the best protection for their customers.

The global data on social media usage certainly confirms this, but fails to capture the uniqueness that each culture and region bring to the table. Countries do seem to have broad tendencies that characterize how they use social media. Some societies are more technocentric, or more private, or less (or more) tolerant of risk, and so on. Others seem to have a distinct barrier between how things are done in private life versus what's acceptable in how work gets done in their organizations. So, after my trip to Australia recently, it was time to start visiting Europe, and Germany was the first stop.

Thus I ended up spending a good part of last week in Berlin getting a sense of that country's experiences with the more serious side of social media, namely when we apply it for work purposes and what we often now call social business. Europeans tends to be more conservative and rigorous about how they apply IT to their businesses, and this is true of Germans in particular. I believe this also tends to make them less strategic in some cases as they prefer to focus on specific near-term business problems as opposed to widely enabling generational technology shifts in their organizations.

Yet it's been striking how effective German companies have been at adopting social business recently, particularly internally, aka Enterprise 2.0. Industry leaders such as Daimler, Vodafone, and Sennheiser have all begun the journey in recent years, but are just some of the examples.

Currently the fourth largest economy in the world in terms of GDP, Germany has had an interesting pattern of social media adoption in their citizen's private lives. While 66% of online adults in America use social networks regularly, considerably less than half of Germans do the same. In contrast however, mobile social networking is quite advanced there, with the same data showing at 77% of German Internet users now access social media via mobile devices.

But how specifically does adoption of social business fare in Germany? It's a society that's famous for its structure, order, and hierarchy -- something often considered anathema to the free wheeling nature of social media. Normally, I check to see how social media is proceeding along first. In general, I find there is a strong correlation between consumer usage of social media and the uptake in the workplace. For example, Japan has one of the lowest rates of social media adoption in the developed world, and it also has one of the lowest workplace rates of adoption of social business.

Related: Social business in China and Russia.

While social business adoption data about Germany can be somewhat hard to find, I was able to uncover a recent citation from IBM's Sandy Carter, who found just recently that 70% of German companies are currently using social media for business purposes, with 40% of them using it for customer acquisition. If this number holds, it's surprisingly high given the lower rate of consumer adoption, but not altogether unexpected. If nothing else, Germany companies tend to be pragmatists and they will seek value where they can find it.

A Teutonic social business story

At the Social Business Summit 2012 Berlin, which was my primary reason for the visit (Disclaimer: My company held this event and covered my travel), we heard from German chemical giant BASF -- with 2011 revenue of €73B and over 111K workers -- about their global social business effort aimed at better connecting together their workforce.

I've been following BASF's story for a while now, and even detailed their story here on ZDNet a few weeks ago. It's an impressive example of the dedication and time required to change the collaborative landscape of a very large firm with its own distinct culture, habits, and challenges, such as many geographic regions and product lines. While the BASF presentation on the project is perhaps the best treatment of the project, Cordelia Kroo -- one of the project's leaders -- provided a stellar breakdown of their experiences and results so far.

Cordelia kicked off her session stating the practical focus of the effort: "One should start social business with strategy, not because every company is creating an internal Facebook." She also noted that it takes involvement from all levels of the company, saying, "you need support from the top and engagement from the bottom," to make enterprise social networks deliver results. Cordelia's group periodically received requests for an "official expert approval process" to ensure that contributions from new or unvetted employees were understood in light of their actual expertise. However, like virtually all workforce collaboration efforts, the ultimately found it unnecessary; the transparency of social media and ability to evaluate ones interlocutors personally addressed the issue satisfactorily. The results did too: Cordelia reported that there has been no false actors in over two years of operation of their internal social networks.

But what about business results? What did BASF encounter? This is always one of the tricky questions about social business ROI, a notoriously difficult subject with IT in general. That's because most companies, even very well managed and disciplined ones typically don't baseline important business KPIs before and then after rollout of their social business effort. Yet, Cordelia was able to produce a steady stream of success stories, one in particular which provided significant double digit improvements (details in the slide above.) Finally, Cordelia observed, as we've seen in so many Enterprise 2.0 initiatives, that community management was absolutely critical to the success of the effort, to create the necessary support and oversight to users to make the connect.BASF (the name of their community) successful.

Social business and Jazz: Intellectual cousins?

Another provocative session in Berlin was given by Michael Gold of Jazz Impact. He uses the collaborative and improvisational models of Jazz music to teach about innovation in collaboration, including social business. I had the good fortune to spend some time with Michael as he explored his ideas while he prepared for his session and it's clear that there are fascinating lessons learned that can cross pollinate between the two disciplines.

As Michael said in his far-ranging presentation (which, to prove his point, typically involves working musically on stage with someone new he's never met before), "100 years ago, Jazz disrupted music - just as social media are challenging businesses today: From conducting to improvisation". Michael's point was that we have to be prepared to move out of our comfort zones to be able to accomplish something truly new using the powerful new methods available to us in the social media era. The real barrier to better and more open collaboration however: "The biggest challenge to moving to open engagement is the inherent resistance to change", says Michael. And to find that resistance, we typically have to only look in the mirror.

Perhaps Michael's most significant statement was this however:

Systems based on open engagement that enable rather than control will generate results that far exceed the combined input of the resources involved.

This a key insight as we move away from the 19th and 20th century models of work (farming, manufacturing where repeatable outcomes of a fixed process were key) to a far more dynamic model of knowledge work where the primary endeavor is to continually develop creative new solutions in a fast-changing business environment (and something I've explored in detail with the concept of next-generation enterprises.) In this way, social business is very much the Jazz model for business compared to the orchestral and centrally conducted model.

Although there were many other great speakers that day and space is limited, I'd be remiss in not calling our my colleague Dave Gray's terrific line during his presentation, where he began with the observation that "there is a conflict between today's organization and the future." Based on his research into how organizations are evolving, he predicted that in the near future, "everyone will operate as a fractal version of the CEO." Meaning that in a networked, deeply connected company -- instead of hierarchical organization -- everyone will have the responsibility to locally drive the business forward in all the ways that top leaders were previously supposed to be responsible for. In fact, this is something that might only be possible in a scalable, repeatable way with the connected approach of social business.

Related: Social business in Australia.

In fact, the change in how we must structure our organizations is something the social business community has been discussing more and more recently, in terms of organizational models of the near future, such as Stuart Boardman's recent post on the subject.

That's it for now, but I'll be keeping the updates coming here as often as possible. The next stops are Hong Kong, then Denver, and London. I hope to provide detailed updates on the state of social in all its forms while I'm on the the road this year. In the meantime, you can get more detailed case studies, a roadmap, and a compelling case for enterprise-wide transformation in our just published social business management guide, Social Business By Design.

See also:

Enterprise 2.0 success: BASF

Social business success: Burberry

Salesforce eyes international expansion one country at a time

Is it time for a C-level social media executive?