Social media's rocky road in business

Social media's rocky road in business

Summary: Despite all-time high levels of adoption in many organizations, the early results have at times been decidedly mixed. However, this has long been the case with emerging tech, whether the next big "revolution" was ERP, CRM, cloud, etc.

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Those who track the online discourse on enterprise social media are surely aware that the trough of disillusionment is likely at hand. Yet the dreaded industry trough, brought about by the over-heated promises and inflated expectations bandied about from just about every quarter--including thought leaders, journalists, vendors, and yes, even end-users themselves--is often considered a largely inevitable step in the process of maturity of any new technology.

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.

Social Business Trough of Disillusionment

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.

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Topics: CXO, Collaboration, Emerging Tech, IT Priorities, Software, Enterprise 2.0, Social Enterprise

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3 comments
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  • Social Media is for the new generations

    That have grown up with it. Workingin IT for the past decade and a half i find Social media in the enterprise to be annoying at best and a poor comunication tool and less than useful collaboration tool. Face to face is still the best wat to collaborate,build team and interpersonal relationships with longevity. The only caveat to that is that often times organizational heads schedule too many meetings just to hear themselve talk and discuss obscure process rather than further progress on any given task. If the same information can be summed up conscicely in a one page email then send an email.
    ammohunt
  • Old way vs. new way

    Being around since the dawn of the net, I'm used to researching various things by asking virtual strangers (who have strangely become virtual friends) and usually getting some sort of response. It's not often first-hand experience, but might be qualified advise or second-hand accounts.

    My younger wife, however, embraces the new way and the results are nothing to sneer at. When she emigrated to the US three months ago, she joined a Facebook group of people going through (or have gone through) the process and had her questions almost immediately answered as soon as she asked them. When a few weeks ago she discovered she was pregnant, she joined another group and again gets instant answers from those who have experienced the same issues. She is also in a group of nurses and they have been helpful in providing advice on what she needs to get her certifications here.

    A few weeks ago, LinkedIn disabled a feature that I heavily used. I didn't know they did this, as I was being prompted to install an app then told I had too many (I had exactly none) and had to remove some before I could add it. I probably had 15 responses, some comiserating, others offering alternative remedies (unfortuntely, reclaiming lost data was not among them). Still, it was a very rapid reponse to a not-so-pressing issue.

    The new way is very cool to those willing to make use of it. There are books out there on how to monitize this if you are in the business of selling things or services. Judging from what I've read, it works on a small scale...targeted and interested customer lists, for example. The problem seems to be more with mega-corporations that need to cash in with needs several orders of magnitude higher. A small business selling something with a particular demand can put together a list of, for example, 3,000 high-quality customers (opt-in, wants to be informed of the products, motivated customer, etc). Such a list yields on average (I'm taking stats from a book at face value) $1 per customer per month, regardless of the product (bigger ticket items will naturally sell in smaller quantity and vice-versa). You can't scale this to 1 billion users (in the case of Facebook) because there is no universally common element. This is why tracking and profle-based advertising is getting so popular, and why these companies cannot be expected to respect user privacy. Hopefully the find some acceptible method and we don't lose the aspects that are cool about it.
    jvitous
  • Social Media is the King

    Considerably, the article is really the freshest on this notable topic. I concur with your conclusions and will certainly thirstily look forward to your forthcoming updates. Saying thanks can not simply be sufficient, for the exceptional lucidity in your writing. I can instantly grab your rss feed to stay abreast of any updates.
    johngflynn657