According to Coase's theory of The Nature of the Firm, enterprises form to avoid the transaction costs of buying services or other inputs from other organizations. But that was in 1937. Modern communications, in particular the Web, have reduced the friction costs of doing business with outsiders at the same time as increasing competition — to the extent that it's now often cheaper to use an outside provider than an internal resource. One of the clearest examples of this is the use of SaaS applications or cloud computing resources instead of internal on-premise computing.
The flipside of these changes is that enterprises are no longer the passport to lifetime employment they were in my father's time. Corporate loyalty from and to employees is evanescent, easily dissolved when a business downturn or a better offer comes along. Loyalty between individuals is much more important today. I often meet people who have worked for the same boss but at several different enterprises. Teams that build successful working relationships stick together and recruit each other to new employers as they hop from one opportunity to another.
Social networking has always been an important aspect of business life. It used to happen at the golf club. Now it happens on LinkedIn, Google Groups and Facebook. In the same way that the Web has reduced friction between firms, so it has reduced barriers to social intercourse. All of us now routinely form relationships via the Web with people we've never physically met. What's more, the Web is becoming a mine of pertinent, timely information on all our contacts.
But enterprise computing is still designed for the old, stovepipe model in which every transaction took place within the same firm. There's no connection with the social automation that's happening between individuals. Many enterprises even resist talking about social networking. And even when an application vendor adds some kind of social networking features, there's always the suspicion that they're just painting social lipstick on a stovepipe pig.
This yawning chasm is an opportunity for a new class of applications to emerge that can harness the social networks between individuals and make them relevant to the enterprise. Or perhaps reinvent a new kind of enterprise, better suited to the low-friction reality of the connected Web. Enter the socialprise.
I like the word, but it's not my invention (even though I'm putting my own spin on it). It's been coined by business search and intelligence vendor InsideView, which is using it to help launch a new product "specifically designed to fuse social data with enterprise-grade search and intelligence capabilities." Here is InsideView's definition of socialprise, from its press release:
"Socialprise applications sit at the junction of traditional enterprise applications and social networks, and they are a mash-up of the information and the user experience between these converging universes. Socialprise applications enable organizations to discover and distill highly relevant information from an expanding sea of structured and unstructured data sources and present it in the meaningful context of specific business processes. They address both content aggregation and presentation — and inject it with a healthy dose of collaborative functionality for enterprise-wide applicability."
The new product is not exactly new — InsideView has been around for a couple of years and has already had some attention for its service, which brings together information from various sources and presents it in context where it can be useful to a salesperson. But the new release of SalesView is a more complete iteration that's integrated for use with either Salesforce.com and SugarCRM (with Microsoft CRM said to be in the works) and there's now a free version which will likely help spread adoption.
What I find intriguing is that this is an early example of an application that harnesses the information out there in the connected social Web and puts it at people's fingertips to further a business objective. It's not the whole story of the socialprise, but makes for a page-turning episode in the opening chapter.