Enterprise 2.0 and improved business performance

Enterprise 2.0 and improved business performance

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

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

Driving Improved Business Performance with IT-based Solutions

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

Related: Fixing IT in the cloud computing era

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

Focusing on what matters to the business

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

Which comes first: Enterprise 2.0 or better performance

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

Topic: CXO

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20 comments
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  • Enterprise 2.0 *has* to be about business results

    Over and over again, we find from our own customer base that the link between business results and E2.0 success is a causal one.

    Customers who buy PBworks as an experiment in "social software" tend to see an initial spike in activity, but disengage over time.

    Customers who buy PBworks to solve a specific problem (e.g. as social intranet, customer extranet, or client project management) tend to take some time up front to weave PBworks deeply into their workflows, but then display steady and continually increasing engagement over time.
    chris.yeh
    • RE: Enterprise 2.0 and improved business performance

      @chris.yeh@... Mac versions are always slow coming. MS should have realized by now that Mac users are not only much more likely to switch to competing products than PC users, but have much less to lose if a product doesn't come out right away. So while I'm glad 2011 is on the way with some really great features, Microsoft would have been better off focusing on getting Mac versions out simultaneously with PC versions, not pandering to a PC crowd they have no chance of loosing, and making the products competitive with each other. I'm not just saying this to bash MS and I don't even own a Mac. It just makes sense...much like very soon making a Linux version will also similarly make sense. <a href="http://www.arabaoyunlarimiz.gen.tr/kiz-oyunlari/friv-3.html"><b>friv</b></a>
      Arabalar
  • RE: Enterprise 2.0 and improved business performance

    Overall, Enterprise 2.0 is too generic to measure its effectiveness and value properly. Even as the space gains attention and expands, horizontal social software ?platforms? will continue to have a hard time showing hard ROI.

    Windows wasn?t really valuable until you had Word, Excel & Powerpoints ? the killer apps of the new platform. To understand the value of ?social? in business is to recognize that Innovation is the killer app for social software.

    See just one example of this as British Telecom estimates that more than ?100 million has resulted from cost savings and revenue generation through their innovation platform powered by Brightidea: http://bit.ly/dtdDct There are countless other examples that show innovation incorporates social the right way purposing it on a core business need that is measurable and delivers hard dollar ROI.
    jnoble1
  • RE: Enterprise 2.0 and improved business performance

    First off... what the heck is enterprise 2.0 anyway? Talk about an overused term in our industry... yuck.

    Putting that aside, I think it is too early in the game to measure the value or hard ROI of business social tools. Many of the organizations that we work with at IGLOO Software are in the very early days of adoption. A big mistake that we see companies making - is not identifying the business problem they are trying to solve with social software and determining the potential business benefits to the company. If you start out blind... how can you ever measure ROI.
    dlatendre
  • RE: Enterprise 2.0 and improved business performance

    As with any enterprise initiative, including business performance improvement, companies have to start with the end game in mind. For example, do you need to use E2.0 to improve proposal development? Competitive intelligence? Consumer insight? Our most successful customers are those that use Social Knowledge Networks to address specific problems, desired results, and audiences to be served. Otherwise it?s just throwing a strategy against a wall and hoping it sticks.

    Mike Cassettari
    http://inmagicinc.blogspot.com/
    mikecassettari
  • RE: Enterprise 2.0 and improved business performance

    Part of the problem is that Enterprise 2.0 is
    not a sexy topic among social media
    journalists. It's a lot more fun to write about
    personalities like Zuckerberg and Jobs than
    take a hard look at where value is being
    created.

    This is compounded by the fact that it's hard
    to create case studies, and even tougher to get
    organizational approval to talk about your
    successes.

    I talk about this more here:
    http://bit.ly/aJcytC
    Beckland
    • RE: iPhone 3.0's hidden features (Update)

      Pretty solid numbers indeed, though they don???t focus exclusively on Enterprise 2.0 but on collaborative technologies http://france-pharma.com | http://bluepillsau.com | http://edproblemsolver.com more broadly such as unified communication, video conferencing, and other related approaches.
      drumandyou
  • RE: Enterprise 2.0 and improved business performance

    Excellent article. I think you are getting to the root of the
    problem with B2B social networking and collaboration
    tools. I believe also that what most companies are doing is
    simply cramming business process (square pegs) into
    collaboration tools (round holes). Understanding how
    these tools address business issues is certainly a step in
    the right direction. However, I believe that most
    companies are missing the crucial way to do that... talk to
    the employees that will be using these tools. Until we
    understand the user needs within an organization and the
    ways in which employees want to interact with these tools,
    we will be stuck with another business application with no
    real adoption and huge training costs that still have no
    impact on business efficiencies, profits or innovation.

    Kevin OConnor
    User Insight
    koconnor@userinsight.com
    kevinui
  • RE: Enterprise 2.0 and improved business performance

    I am always of the view that many minds is better than one. The aspect of social tools that I like is the focus on collaboration with a wider number of people. Social collaborative tools can produce higher standard of work in less amount of time compared to the traditional means of a word document. I agree to the many comments being said about difficulties in measuring ROI. The most obvious and immediate ROI would show in the area of customer service and how you measure that in financial terms is difficult.
    lairebecca
    • RE: Enterprise 2.0 and improved business performance

      @lairebecca <br><br>I'd like to get your thoughts on what if any role you think the media might play either as a community builder or intermediary or maybe both. <a href="http://www.arabaoyunlarimiz.gen.tr/komik-oyunlar/">komik oyunlari</a>
      RahinBen
    • RE: Enterprise 2.0 and improved business performance

      @lairebecca

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      filhomarques
  • The Answer to Improved Business Performance

    The best way to get business performance and measurable results from next gen IT is to get the bloody CIO out of the way and let business people use the collaboration tools that work - Web 2.0-style - in a true Architecture of Participation. The CIO culture is death. Let's get these negative left-sided brain, half-empty thinkers out of the Real Enterprise 2.0.
    XceliantBear
  • RE: Enterprise 2.0 and improved business performance

    What has been lacking all along is a rational platform for enterprise computing, which is why I've invested 15 years into resolving the problem. <br><br>When dealing with each of the complex barriers to innovation and performance one at a time-- both organizational and technical, we found conclusively and with no doubt left in my mind, that a holistic approach was essential-- then and only then can resolving one challenge (security, overload, meritocracy, misalignment, and trust to name a few) also substantially improve another.<br><br>And in order to provide a holistic system that has any chance of adoption in this environment, and not dominate the universe, it was essential that it be built on true universal standards, working with any other application customer needs also using said standards, and be easily adaptable to changing conditions in natural language- no small tasks all, trust me. On the other side is much better enterprise search, far more accurate predictive abilities, improved innovation & crisis prevention, and far more transparency for management.<br><br>We offer quite a bit of learning material on our site that has been downloaded by almost every large organization worldwide, including all competitors of course-- Unleash the Innovation Within is a good start-- healthcare platform diabetes use case is a good ending.<br><br>XBear is on to something too-- the culture of the CIO community is to a large extent inbred by the entrenched IT vendor establishment, in much the same way as government regulators and industry, which quite often directly conflicts with the mission of the organization -- particularly relating to adoption of innovation, security, and differentiation. <br><br>At the moment I see something going on that is similar to protectionism in K-12 in America -- fear of loss of control, despite models that are obviously far more functional. One difference, thankfully, is that exceptions to the rule exist-- to no surprise they tend to be in exceptional performance organizations -- go figure.<br><br>Thanks for the work.<br><br>Mark Montgomery<br>Founder & CEO<br>Kyield
    markm7
  • RE: Enterprise 2.0 and improved business performance

    I think yes, its a great piece of info. Small businesses and big enterprises are gonna drive lot of liquidity into collaborative efforts!
    But then the big question is: How does it matter for Enterprises?
    The phenomenon of social media is starting to have a very significant impact on how we think about none other but - Work!

    The SOCIAL shift whispers the notion that without a common goal, it is nearly impossible to form an effective team and so, an Organization.

    Indulge in an exciting and promising session on collaborative culture for Enterprises: http://www.impetus.com/featured_webinar?eventid=23
    apeksha.amity
  • RE: Enterprise 2.0 and improved business performance

    I think that small businesses are most likely going to adopt the implementation of Enterprise 2.0 when compared to large businesses. One of the reasons for that in my opinion is because it requires people collaborations in order for E2 to be efficient within businesses. As we understand that if only one person participate to it, it is not going to be very valuable. For example --- "telephone, if only one person has and uses telephone, what is good about that?"

    What i am really trying to say is that, it is always easier to start with a small number rather than a huge number, right? I have found that not many people these days fully understands how E2 works (like myself, only just started to get an idea of what it is), I think it will take an amount of time for everyone within a company to obtain the knowledge and use it efficiently for their job.
    ctkcrystal
  • RE: Enterprise 2.0 and improved business performance

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  • RE: Enterprise 2.0 and improved business performance

    Excellent article. I think you are getting to the root of the
    problem with B2B social networking and collaboration
    tools. I believe also that what most companies are doing is
    simply cramming business process (square pegs) into
    collaboration tools (round holes). F.Ex: <a href=http://www.kayserimeskenemlak.com>Kayseri Emlak</a> Understanding how
    these tools address business issues is certainly a step in
    the right direction. However, I believe that most
    companies are missing the crucial way to do that... talk to
    the employees that will be using these tools. Until we
    understand the user needs within an organization and the
    ways in which employees want to interact with these tools,
    we will be stuck with another business application with no
    real adoption and huge training costs that still have no
    impact on business efficiencies, profits or innovation.
    Kayseri Emlak
  • RE: Enterprise 2.0 and improved business performance

    At the moment I see something going on that is similar to protectionism in K-12 in America -- fear of loss of control, despite models that are obviously far more functional. One difference, thankfully, is that <a href="http://www.bursaemlakx.com" alt="bursa emlak">bursa emlak ilan</a> exceptions to the rule exist-- to no surprise they tend to be in exceptional performance organizations -- go figure.
    bishiyoq
  • RE: Enterprise 2.0 and improved business performance

    Enterprise software will never catch the eye of mainstream media like consumer software plus I feel that there is still a feeling out period with how to best use these social tools in the corporate environment. Things are definitely headed in the right direction, however. <a href="http://www.jailbreakverizoniphone.com/"><font color="Black">Jailbreak Verizon iPhone</font></a> I know that in our organization that using collaboration tools like Jive have allowed much freer sharing of information - information that previously was just tucked away in emails.
    tysonclark
  • RE: Enterprise 2.0 and improved business performance

    As we understand that if only one person participate to it, it is not going to be very valuable. For example --- "telephone, if only one person has and uses telephone, what is good about that?"

    What i am really trying to say is that, it is always easier to start with a <a href="http://www.estilomuhendislik.com">Hava Perdesi Fiyatlari</a>
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    <a href="http://www.estilomuhendislik.com">Hava Perdeleri</a>small number rather than a huge number, right? I have found that not many people these days fully understands how E2 works
    seocu