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We recently conducted a social business adoption survey, our second this year, and in reviewing the results we're seeing some very exciting patterns emerge. My colleague, Erin Traudt, who manages the enterprise collaboration and social solutions practice in my group is doing a three part series on our IDC group blog on the whole survey so I won't redo that effort here. What I want to look at in detail is the question of why. We are seeing rapidly increasing use of social tools and initiatives across a wide range of businesses small to large and in many different verticals. Clearly businesses are starting to see results from these initiatives, and in the near future we're publishing a ROI study that we have developed collaboratively among a group of analyst inside IDC and other independent IDC partners. Look for more on that publication shortly.
Here are the results from the question of why are businesses doing these social initiatives:
First it's good to see that building brand awareness has slipped downward, important as more companies move from social marketing initiatives, the place where many started using social tools, to a much more balanced use of social tools across the business. Acquiring and sharing knowledge as #1 and #2, and by a fairly significant margin, is an indication of our increasing reliance on online media and socialized content as an important business intelligence tool. The SCRM message is also obviously gaining momentum as engaging customers in a conversation is now #3 on the list. Seeing conversation listed above brand awareness, a shift away from the initial momentum to try and use social as a customer broadcast system is encouraging and shows growing maturity in my opinion.
The potential for using social tools for internal communication and collaboration also seems to resonate, with internal communication at #5, reinforcing a spreading of enterprise 2.0 concepts. This move to more people centric collaboration is another important factor in gauging overall social business momentum. I think, and have said quite often, that businesses must address their internal silos if they expect to see the kind of real engagement that is possible with social customers.
Possibly the biggest surprise in this question is the growing reliance of businesses on social for decision support. Making decisions at #6 out of 14, with over a quarter of the companies surveyed reporting social as a decision support tool, is a strong indicator to me that businesses are really starting to tap into the power of using social tools. It's also shows that socialytics technology is advancing and vendors are providing valuable insight to companies that are using these first generation BI tools. As the technology advances and is more widely used companies will see significant ROI from the use of social data to support business decision making processes. The real potential, to use socialytics tools for predictive analytics will open up exciting new and high value business opportunities.
One last observation from this question is the growing use of social on the partner engagement side of business. It's still early days for this emerging use case, but it appears that companies are starting to extend the use of community and content in other directions beyond customers. I think extending social initiatives to include partners and suppliers has great potential for businesses.
Tags: social business, adoption, decision support, predictive, analytics, socialytics, e2.0, SCRM
Apple's announcement this past week of another apps store, this time focused on offering products for the Mac, is one in a rapidly growing series of app store launches in the last year or so. It's not really a surprise announcement considering Apple's leadership in popularizing the concept but it does have some interesting ramifications for the Mac ecosystem. I doubt that anyone would argue that Apple is an innovative company, but often in my opinion the innovation associated with a new gadget has been more in the business model or support structures for the gadget than the gadget itself. I think that the proliferation of app stores is starting to have some far reaching consequences and has the potential to be disruptive for some larger software vendors.
The basic idea, that Apple could manage and control distribution to a new device goes back to the iPod and iTunes. MP3 players were not new when Apple first introduced the iPod, and were cheaper by a far margin. Now I suppose the iPod's form factor was somewhat better than it's competition but in general the devices features were not particularly differentiating. What was new was the simple way in which consumers could find, buy, load and manage media through iTunes. Other MP3 plays required the user to find music scatted across the web or try to convert the music from CD's and other media. For these players consumers had to manage files and file types / formats, but not so for the iPod. On the iPod the consumer managed the media itself, which was in fact what they were trying to do. iTunes provided an elegant and simple way to manage media.
Fast forward to the iPhone and the apps store. Now I won't claim that the apes store was the only innovation from the iPhone, even though there certainly were already smart phones on the market. Certainly the multi-touch screen and the convergence of media player - phone - mobile computing device are innovations and helped drive the impressive adoption statistics. Still though, I'd argue that the iPhone's (and iPod Touch's) ascendance as the mobile computing platform of choice was in no small part driven by the success of the apps store. I would also argue that Android's fast following has accelerated because of the Android Marketplace.
So what's really unique about an apps store and why are they so popular? An apps store generally has these characteristics:
cloud based Internet access
one click (or simplified) automated buy, download, install
central management and control of what is offered
guaranteed device (or system, solution, ecosystem, etc.) compatibility
consistent user experience
simplified and automated upgrades
community based rating system
Apps stores are popular with consumers / end users mostly because they simplify the process of finding, buying, installing and maintaining software. The electronic distribution keeps costs lower as well. The app store democratizes software distribution, creating a more equal playing field for large and small vendors. Large marketing budgets can still influence buying of course, but because of the contained nature of the process it has less of an effect. The apps store leverages the power of community with reviews, ratings and recommendations giving buyers a more credible source for selecting what they need and want.
For the Mac ecosystem the new Mac app store could create quite a disruption and open opportunities for new, innovative vendors to quickly gain share in a fast growth user base. Finding good software for your Mac hasn't always been an easy process. Yes the large vendors have some products but are they the best solutions out there? From Microsoft for example, the Mac versions of the Office product line has lagged the Win versions in functionality (I'll refrain from any other commentary on the products). Finding a quality product in general often involves reaching out to your network, lots of online searches and a bit of trial and error. Even installing those packages once discovered can be confusion for the non techie, since there are a few variations of the amount of automation you'll find in different packages. Creating a centralized Mac software community around an apps store with all of the associated automation and ability to centrally locate various alternatives will be popular. I'd guess that the model will be popular with smaller and niche ISVs as well and will see a lot of new and interesting products, perhaps even a whole new class of micro software products. Will it be popular with the larger vendors, I doubt it. Because of the hyper-competitive nature of the apps store pricing tends to be low and there is considerable pressure to keep prices low. Adobe premium prices its creative suite software for example, and depends mostly on enterprise sales to keep ASPs high. Could the app store bring new competitors to this market? Among users the perception that there will be good free and low costs apps available adds to that pressure. Freemium and free ad supported software is also very common. It will be interesting to see how the larger vendors respond.
Apps stores are growing out of there consumer beginnings and moving to the enterprise as well. Several companies are launching or have launched enterprise apps stores and are starting to build a robust ecosystem of partner apps to support and extend their own solutions. If the enterprise app store keeps to the same basic characteristics as the consumer counterparts the opportunity for disruption is great. That's one of the big questions though, can enterprise level solutions be distributed through an apps store process? This is different from providing a catalog of partner apps or even a marketplace. A true apps store has to simplify and automate the buy, install and maintain process, an increasingly difficult task as software complexity increases. There are some products that could be provisioned through an apps store model though, so would CIOs embrace this or would it be a way for line of business to work around IT controls? Questions that will no doubt be answered as more vendors join the growing app store movement.
Tags: app store, software, Apple, Microsoft, gadgets, technology, distribution
I think there is a strong potential for activity streams to become the new user interface / experience for most workers. The concept of bringing together people, content, data and applications in a people-centric, user configurable stream is very powerful. It also provides a web 2.0 like experience while facilitating collaboration in a people-centric model and a way to more effectively handle enterprise system exceptions. All of this is great as long as workers actually use the activity stream. Adoption has long been one of the greatest obstacles for enterprise software implementations. This is maybe even more true when the system is a new layer across existing functionality, not that it doesn't add significant value, it does, but the reality is that in general users tend to resist change. There is a type of worker that would be easier to move to an activity stream (both from a role or function and from a mind set) and those that would resist (or refuse).
In the enterprise certain roles tend to spend most of their time in a single system and some roles work across various systems whether by design or by necessity. For example customer service representatives (CSR) spend much of their time in the customer service system. They might also have to use email, IM and maybe some order inquiry system (if it's not integrated into the CS system). Sales representatives / account executives tend to spend most of their time in email and sales force automation. For sales there is also a trend to move to mostly mobile computing, at least for field sales and for integrating social network sites and other social data sources into their workflow. To add a social layer on top of these apps would probably meet with mixed reactions. For the CSR it would not be practical for them to spend most of their time in an activity stream, their job makes heavy use of a complex system that could not easily be replicated in a social layer. The sales rep on the other hand, could and would probably find the activity stream a better and more efficient UX for daily activities, especially if integrated into the SFA system for updating forecasts and dealing with exceptions. The activity stream in their case provides better social collaboration, integrated social data, integrated email, exception processing in a friendlier environment and native mobile support.
So the question is how to deal with workers whose role (or mind set) doesn't lend itself to adoption of the new social layer? For these workers the better approach would be embedded social functionality that mimics the activity stream but in context to their role and preferred application. Currently no enterprise vendor is providing that level of functionality embedded in and in context to the enterprise application. There are some large enterprise vendors that are working on this but today it is not fully available. Yesterday I spent some time with Socialcast exploring a new offering that was announced this morning, Socialcast Reach. Socialcast currently provides one of the most full featured activity streams on the market and with Reach, has added the capability to embed the stream into other apps in context. I recently posted on enterprise silo's, a problem that I think enterprise software tends to exacerbate. While I don't think technology by itself can overcome the silo problem, approaching the enterprise collaboration problem from both sides, by providing a social layer and then embedding that social layer inside other apps where people naturally work and need real time interaction around exceptions, issues and opportunities, could certainly help to break them down. Tying both streams together has the greater possibility of getting used, which is the real barrier to the success of any software, especially social or collaboration. The wider the use, the more useful the software, which in turn increases its value and its adoption.
Tags: social, e2.0, embedded social, activity stream, Socialcast
The shiny object that I see a lot of activity around these days is engaging or having a conversation with your customers. Now don't get me wrong, that's an important part of the change to a social business, but I have to ask, how do you think you can effectively engage your customers if you can't talk across your current organizational silos? The industrial business model with its hierarchical model, was designed in such a way that silos were a natural outcome and in some cases (many cases) compensation models actually reward silo'ed behavior. Overcoming the silos and building a collaborative workforce is a key component of a social CRM strategy, which I suppose might not be intuitive to most organizations. And when I talk about collaboration I'm not talking about traditional file centric collaboration, I mean social or people-centric collaboration, which is significantly different.
Take a look at your silo'ed organization from the customers perspective to see why this is important. First, as a customer I want to have one continuous conversation with you, not fractured, piecemeal conversations where I'm constantly re-educating you on who I am and what I want. Have you ever been shuffled around inside a company trying to get a problem resolved and have to repeat the problem 6 or 7 + times before you can get to someone who owns and solves your problem? Frustrating doesn't cover the feeling. It's your job to share information and keep everyone up to speed, not mine. Second I don't want to have multiple conversations with you about the same thing (at least not normally, I suppose there are some exceptions to this one). This is the time of mass individualization, I want to be marketed to the way I want and that usually means tell me something once, not 3-4 times (multiple email marketing for the same thing, for example). This extends to different groups telling me the same thing multiple times as well, which often happens when sales and marketing don't collaborate. Basically I want an engaging experience and that doesn't come from silo'ed organizations. Think of the power of having one view of the customer and one continuous conversation that extends all across your company from sales through support and even product design and development. We have to tie the organization together and this might even include people outside of the firewall like suppliers, partners, etc.
One of the fundamental barriers to a collaborative enterprise are the systems themselves. Software is often created, packaged and sold in silos and integration is hard. Having common data models, service definitions, and architecture in our heterogeneous IT environment is tough. Now I'm not advocating that we go back to the monolithic software suite approach to IT, it's just not practical and rarely meets all of then business needs, especially in vertical specific functionality. We have to start to think of enterprise workflows (not processes, which don't accommodate ad hoc in a flexible) in a holistic way and build software that is integrated in a way to work across the business and effectively handle ad hoc information and work.
If file-centric collaboration tools don't solve the problem, our enterprise systems make the solution difficult and our organizational dynamics are not collaborative what do we do? I think there are a few tactics to start on the road to removing this major barrier to social business:
Organizational fixes
System fixes
By the way, you might want to take a look at my IDC group's new blog on our Insights Community site on social business. In particular I'd point you to a new post on "The Donut in the age of Social Business" from CRM analyst Mary Wardley.
Tags: social CRM, customer, ad hoc, activity stream, collaboration, e2.0, change
I was having a conversation the other day with a colleague about trends that are impacting and driving change in businesses and as often happens lately we ended up on the subject of business networks. When discussing new concepts we have no choice but to apply words that have existing, accepted meanings, even if those terms don't quite fit what we're trying to say, and add other adjectives to help translate the picture that you have in your head to mutual understanding. For the last few years, as I've focused my research more and more on emerging trends in the enterprise, I've found this task very challenging. Using the word social in some business context for example, is fraught with issues as people try to shoehorn their own understanding of the word into some new frameworks. The word network, I've learned, is another ambiguous term when used in a business context. It seems that the word's techie baggage, while appropriate to some extent in understanding where I'm trying to go with this idea, causes some confusion. The challenge then is to find the right adjective(s) to start to move people in the right direction, or perhaps, even though it's not my favorite activity, delve into a more detailed definition of business network.
The problem with the word network is also part of the strength of applying it to the current emerging business environment. From IT networks that are flexible, scalable, configurable, fault tolerant, accessible from multiple points and on multiple devices, we can borrow concepts that businesses need to begin to apply more broadly. The downside I think, to using the word network is that when many people hear the word they start to think of the physical connectors, the Ethernet cables and routers, etc. that make up the LAN or WAN and that's very limiting. Or perhaps they think of it in terms of the social web, which can also be distracting even though again some of those characteristics apply.
Sitting in the Philadelphia airport early this morning in one of those inviting white rocking chairs they provide, sipping a cup of tea and prompted by the sight of so many people connecting and carrying out business, I had an idea. When I think about business networks in the context of all of the other technical and cultural change factors that I see in our post-industrial information economy, maybe what I mean is "organic business networks". The word organic could be confusing though, but when I think about it in this context I am thinking that it has similar traits to organic computing. Organic computing is a computing system that is self-optimizing, self-healing, self-configuring and self-protecting. More broadly organic models are generally patterns and methods found in living systems used a metaphor for non-living systems. So applying an organic model, organic business networks are networks that represent the interconnectedness of the emerging information business environment. Organic business networks connect people, data / information, content, and IT systems in a flexible, self-optimizing, self-healing, self-configuring and self-protecting system. People are the primary nodes of the network but the other nodes, data, content, applications and systems, are no less important.
A business functioning as an organic business network would incorporate the characteristics of a social business, as I listed here, but go beyond this basic idea, using social business as the operational paradigm but using the organic business network as the mode of operating it's business. The two concepts play off each other, social business is the "what" and the "organic business network" is the how. An organic business network lets the business work outside of traditional "firewall" boundaries and is the continuously adapting implementation of an optimized business strategy. In this approach value creation can move to the optimal point in the network depending on strategic influencers like economy, market dynamics, customer behavior, prospect behavior, partner behavior and needs, supply chain dynamics, predictive business outcomes, etc. An organic business network driven company is the anthesis of a hierarchical, rigid, reactive, process constrained, and silo'ed organization. Instead the business can adapt to changing conditions, leverage assets effectively and thrive in a hyper-connected, global competitive, information driven environment. What do you think, does that add a little clarity?
Transforming business to a networked environment is mostly about changing business culture to become more social and connected but it doesn't mean that specific tools aren't needed to support that transformation. Two things come together to create great change, technology and culture. The social web is a driving force that is empowering people to change business culture and forcing people back to the center of activity in the enterprise.
To create a next generation enterprise, businesses need to take two concepts from the social web and apply them across all business functions, community / network and content / social media. There's more to it than this simple statement of course, but fundamentally that's the approach. Traditional enterprise software was built on the concept of managing through rigid business processes and controlled workflow. With process at the center of the design people-based collaboration was not possible in the system, instead the focus was on file-centric activities. Process, file-centricity, workflow driven systems are too rigid and are not focused on the activities that a networked business in the information era needs to carry out business in a flexible and ad hoc global hyper-connected ecosystem. A new type of software designed around people instead of process is emerging. Today businesses are facing difficult and often competing issues with enterprise systems and the newer emerging social software tools. Rationalizing both in a business IT environment that is increasingly choosing to stretch out the usable life of currently installed systems rather than upgrade or implement more modern software at the business core, while implementing / adding new modules to get needed new functionality is a real challenge. Adding social features, platforms or applications to what Netsuite CEO Zach Nelson likes to call the "enterprise hairball" is essential for competitive advantage, continued innovation and frankly to provide secure, enterprise scalable alternatives to consumer web tools that employees are already using to work around the lack of effective enterprise tools.
So how do we move to socialized enterprise software, and what is it anyway? Vendors are coming at this issue from a few different directions. Start-ups, without the baggage of current systems to modernize are generally building social platforms and / or social applications that can add needed functionality to the enterprise on top of existing systems, integrating when possible / necessary to the legacy enterprise apps. As you might expect these systems are modern, and functionally rich but have the inherent difficulty of not fitting into the context of other enterprise systems. They generally make the worker step out of the enterprise software to do the desired social activity. Traditional vendors have started down the path of adding new social functionality by building or buying some specific social software that is in addition to existing systems but mostly to date have missed the opportunity to embed the social features in the existing apps themselves. This is changing though as the social business movement gains momentum and these vendors start to see the demand for this type of functionality. This idea of embedding the social functionality into the enterprise is essential over time, even if today the only way to get useful tools is to add the software on top of enterprise systems. Let's look at a mind map of what socialized enterprise software needs to incorporate:
The underlying architecture should be built on open standards and use current SOA technology to enable integration and broader system compatibility. The social foundations are really table stakes for social applications, necessary to enable the use of communities and content in building social business activities. Collaboration, that is people-centric collaboration is not an afterthought for social business software, it's core functionality. Collaboration must allow real time and asynchronous communication, it must be context aware and support the need for forming ad hoc teams as necessary to deal in a flexible business environment. Teams also need a flexible definition, the days of firewall limited collaboration are over; partners, suppliers and even customers are members of the enterprise workforce and are essential for co-innovation. I've written quite a bit on socialytics so I won't rehash that all in this post but there are a couple of key thoughts I'll reinforce. Socialytics need to be embedded into enterprise software, just like collaboration and the most valuable use will often be at the intersection of enterprise data and social data. More and more socialytics will move from reactive analysis to predictive analysis as the tools get more powerful and we learn more on analyzing behavioral patterns and interactions. You will notice the mention of activity streams as well. I believe that in the short term activity streams can provide a new user experience across the top of existing enterprise software and will eventually be the UX of choice for many business activities.
If you take these basic principles and apply them to a specific software category what might that look like? I should add before we look at social CRM that I believe that the days of silo'ed enterprise software applications is also numbered. It's getting much more difficult to talk about CRM without talking about product design software, or collaboration or... at some point the software has to flow together and provide integrated activities for getting work done, do we care that it's CRM or PLM? Anyway, here's a mind map of some system additions you might see on top of existing CRM functionality for SCRM:
I want to say this again, SCRM is built on top of existing CRM functionality, if you can't do transactional CRM, you can't do social CRM. I'm sure there are a lot of additional functions that could be added to the above, I'm just trying to show an example. You will notice some common additions across all functions, like embedded collaboration and communication channel optimization. This goes directly to the point that in many social functions one of the underlying keys is enabling conversations when, where and how the customer, partner, supplier and employee chooses, not in a rigid system that is defined by the business. We still have a long way to go to get to this point in enterprise software, but with the increasing demand from customers for enabling technology the availability of these tools should increase quickly.
Tags: social software, social web, network, software, enterprise, e2.0, SCRM
My mom always said, "if you can't say something nice, don't say anything at all." I spent the last day and a half debating whether to write about this story at all. I mean Wall Street said plenty as the stock dropped yesterday on the announcement and my colleagues all around the analysts community are commenting on it, so what else can I add? But my need to talk outweighed my other instincts (and I promise to say something nice too) so here goes.
My first reaction was, "What? really? no way!" Like most of my colleagues I have debated who might be the next person to step into this procession of CEO's from Carly Fiorina to Mark Hurd and I have to admit I didn't have Leo Apotheker on my short list. HP is facing several challenges, the reduction in R&D spend over the Mark Hurd era has left them light in innovation; HP is facing a strong competitor in Oracle post Sun and continued competition from IBM; HP's employees are demoralized and were very unhappy during the Hurd era; and HP, in the new mega-vendor competitive environment, is very light in software. So does the selection of Leo address these issues?
Apotheker brings some strong assets to HP and some baggage. I suppose that's not an usual situation but there are some factors that make it easy to question this decision. Leo's short stint as CEO (although he was co-CEO for a longer period) and the reported low morale of SAP during the 7 months of his CEO tenure do cast something of a cloud on this move. Of course you could argue that his high profile issues at SAP, other than his much maligned decision to raise maintenance, were more a function of the poor economy and inherited issues that stretch back several years than due to his own leadership. So what does he bring to the table?
That said, there are still a couple of real questions. The culture at SAP, where he spent over 20 years, is very engineering focused, HP on the other hand, has a very customer focused culture. Leo has no hardware background, although he inherits an executive team that is very strong on that side of the tech business. And maybe most importantly, he is not seen as a motivational leader, but much more of a tough operational manager. Can he turn around the current demoralized workforce?
In what may be the more important part of the announce, or at least as important, HP's board is bringing Ray Lane onboard as the non-executive chairman. Lane, also a software guy and ex-Oracle, which I suppose could be seen as a return shot for Oracle's hiring of Hurd, is seen as much more of a leader and perhaps his hiring is aimed more at the morale and innovation issues that plague HP. One thing is certain, HP is positioning itself to compete more broadly against IBM, Oracle and Microsoft with this move. It will be interesting to see what acquisitions are next up for HP and whether they will be moving more strongly into the SW side of tech in the near future. Is a large SW acquisition in the future of a revitalized HP?
