I did a series of videos for eCornell during Dreamforce and one of them fits nicely into this series (now extended to 3 parts) so I thought I'd share it as the 2nd installment. I'll probably share a few others over the next week as well.
I did a series of videos for eCornell during Dreamforce and one of them fits nicely into this series (now extended to 3 parts) so I thought I'd share it as the 2nd installment. I'll probably share a few others over the next week as well.
As we move into 2013 it's time to take a look back and see what major events shaped and changed enterprise software in 2012. It was an active year, particularly from the standpoint of continued consolidation in the enterprise software markets. Several hot trends continued to drive acquisition activity and product directions, including cloud, mobile, social, Internet of things and data analytics. Social business has started maturing somewhat and is at least much clearer in specific directions and the best areas of focus for businesses to see real benefits.
The cloud wars really started in late 2011 with SAP's acquisition of SuccessFactors but gained momentum throughout 2012. The major enterprise apps vendors are moving quickly to gain footprint and functionality in cloud apps, as well as define platforms and infrastructure. Early in 2012 Oracle fired the first return shot to the SAP / SuccessFactors deal with its bid for Taleo. Not to be left out, IBM joined the HCM race with its acquisition of Kenexa in August. HCM continues to be a hot area for investment, for more on the 2012 HCM market see this guest post from IDC analyst Lisa Rowan.
The next major cloud acquisition came, once again, from SAP with its acquisition of cloud collaborative commerce vendor Ariba. Ariba provided SAP with a full featured and mature cloud based procurement, sourcing and contract management tools and the largest and oldest supplier network. Maybe more valuable though is the cloud expertise and credibility that Ariba's executives added to the SAP management team.
Oracle filled out its cloud portfolio quite a bit by focusing on customer experience. The Oracle Cloud CX suite, which arguably started in late 2011 with the acquisition of RightNow, added social marketing platform Vitrue, socialytics platform Collective Intellect, social media management platform Involver and finally with the recently announced acquisition of marketing automation vendor Eloqua. Combined with other cloud assets in commerce, sales (Fusion CRM), content, etc., the suite has a broad footprint. I wrote about the Eloqua acquisition here. In addition to Oracle's strong move into CX Lithium acquired social support vendor Social Dynamx and IBM moved to redefine it's web experience products in the context of the overall customer experience.
Social business, particularly around enterprise social networks (ESN), applications to support CX strategies, innovation management and talent and performance management, matured quite a bit over the past year. Much like cloud almost all the major tech vendors get involved in social business technology through new acquisitions, new products and enhancements to existing social tools. Existing social vendors also moved to broaden offerings through acquisition.
ESNs are one of the hottest areas for growth as many companies have / are deploying the technology and working to consolidate existing networks. Consolidation in the ESN market started in 2011 and continued last year, as larger tech vendors moved into the space. Adding to VMware SocialCast, Salesforce Chatter, Cisco Webex Social, Tibco Tibbr and IBM Connections Microsoft purchased ESN leader Yammer for $1.2B in June, Oracle made its own Oracle Social Network generally available in the Oracle cloud, Citrix acquired Podio and SAP completely revamped its offering into SAP Jam.
More and more companies are looking for ways to drive adoption of social processes and increase productivity. Getting social embedded into the enterprise workflow is gaining support and more companies are looking for ways of providing an integrated social experience. The trend is gaining momentum as vendors move from social applications to apps that are social, or have social functionality embedded inside the workflow. At Dreamforce 2012 Concur and Salesforce announced a good example of this concept, Concurforce, an app built on the Force.com platform.
As more companies embrace social technologies internally and externally a few issues are growing that will need some answers as we move into 2013. In particular there is a growing skills gap in consulting expertise to help companies drive successful social projects and sort out ongoing operations. I wrote about it here. In addition to the skills gap there is also a growing issue for many companies that have deployed several ESN products, which often grow virally and at least initially without full executive support. This social network sprawl issue is creating the exact opposite of the desired outcome by perpetuating organizational silos. To solve this companies will have to consolidate in some cases and in other they will need to integrate the networks so that functionally a single ESN exists.
Mobile continues to be an enterprise priority as the need to support multiple devices with multiple OSs is expected by employees. Tablets continue to grow in popularity and smartphones are a standard. Many vendors have provided native mobile apps with some subset of enterprise features but are feeling pressured by customers to give compete access to enterprise features on multiple devices. Many vendors moved to provide a better mobile framework on which they can provide a richer mobile experience to cuatomers. Among those vendors that made good strides last year include Netsuite, Deltek, salesforce, SAP and Oracle, although they all have more work for this year.
Internet of things was discussed quite a lot as sensor technology gets better and more and more "things" are added to the network. In the area of automation the use of sensors with new software products is providing benefits as diverse as preventative maintenance to inventory control. From a consumer perspective the mobile device is becoming a "Swiss army knife" of sorts and integrating sensor data opens up many possibilities for health and fitness monitoring to commerce. Look for 2013 to see this trend explode across business and consumer.
There seems to be more pressure on IT over the past few years to redefine and change its roles to be more relevant to the business. What has become more of a governance and enforcer role for many IT organizations is getting pressured to find new ways of adding value as more IT buying decisions get pushed out to the line of business executives. In many companies CMOs now manage a larger IT budget than the CIO, particularly as companies deploy technology to drive CX strategies. The move to the cloud is also changing the staffing requirements for many IT shops. Many IT organizations are finding that they need more of a business process focus and less of a deep developer technical focus. Look for this trend to accelerate in 2013.
In general enterprise software has remained a growth area as companies continue to buy technology. Driving this growth are several trends, including the need to provide better mobile support, the need to get technology that helps facilitate critical CX strategies and the need to provide a more collaborative and networked work environment. As a result of the economic pressures that continue to plague businesses many companies find themselves doing more with considerably less resources. The only reasonable way to maintain and increase productivity is though automation and through better software tools. Hot markets in 2012, social, mobile, CX, etc. will continue to be hot in 2013.
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?
I like the term social business, I'm comfortable with the concepts I've used a lot over the last two or so years. I think that it captures the necessary transformation that the post-industrial enterprise needs. As I think about social business I've started to use another concept that seems to help clarify things a bit, people-centric enterprise. But, I've started to think that maybe something beyond social business and people-centric enterprise might help us think through what is really happening or should be happening in the business transformation. There are two very key social outputs (see the IDC Social Business Framework for a discussion on social outputs) that we need to consider, content and community, that represent the force of the social web. In the social context content is often represented by social media and community is seen as a social network. So here's my idea, maybe we need to start thinking of the new business model as the networked enterprise?
To build a new model for business we have to leverage the power that comes for shifting the focus from process to people. Relationships are drivers of people-centricity, so doesn't this really mean we're changing from a hierarchy to a network? I considered other terms that apply, connected enterprise, ecosystem, collaborative enterprise...all are relevant. The business transformation has impact on all parts of the business from sales to field service and from inside to out. There's a concept in economics called the network effect, or the tendency that the value of a product or service increases as more people use it. The example of network effect most often cited by business texts is the telephone, a single telephone is useless but value increases the more people have and use it. We see this effect on the social web to a great degree, social networks like facebook and Myspace are relevant because people are connected there and become more or less valuable as more people join / use the service (or don't, so network effect can be both positive or negative).
From what I've started to observe I think that there could be a related concept to the network effect in a networked enterprise. In the networked enterprise there is an effect that I call network synergy, or value to the business is increased as a result of the increased interconnectivity of it's people. The addition of the term synergy implies that the interconnection of people produces a result that could not be obtained if the people were not connected (in simple form it's the idea that 1 + 1 = 3). So in a people-centric business the increased interconnection of employees, suppliers, partners, and customers produces a result greater than what could happen if the network didn't exist, or in other words increases value to the business. The social business, which has people as its platform, performs at a higher level because of network synergy. The more interconnected the business becomes the greater the return from network synergy.
The fun thing about trying to figure out what might happen next in software and business in general is the ability to evolve your thinking over time as you gain more data and more clarity. I suppose that's why IDC's tag line is "analyze the future", that's effectively what my job is, at least a large part of it. Sometimes the process is sort of like putting together a puzzle that is mostly blank pieces, but the pieces slowly reveal themselves to you over time. The more pieces you reveal the better the overall picture becomes. Ok, enough rambling around inside my head, what's the point of this anyway? The point is this, I started a few years ago thinking and talking about social media, social networking and enterprise 2.0. That evolved into social enterprise which I used to mean the combination of e2.0 and social CRM and eventually we started calling the movement social business. As a part of social business I started to dig into a concept that I think is an important key to understanding what is happening, that is, in the transformation of business people become the new enterprise platform. That people-centricity is absolutely critical to understanding and building the processes and systems that facilitate the social business transformation. I'm starting to think though, that social business is really just a part of a bigger thing, the people-centric enterprise.
People-centricity defines our current social and business progression past the industrial society's focus on business, technology and process. Not that business or technology or process go away, but instead they become supporting structures that facilitate new ways of collaborating and interacting with customers, suppliers, partners and employees. The idea also has to permeate system and process design. Here's a simple example from collaboration systems. In the past collaboration was more often that not defined as the ability to share and work on a file, so let's call the system file-centric. File-centricity defines the core of how the system works, it's core workflow. In the defined process you create a file, upload a file, share a file, edit a file, review a file, approve a file, etc. So as long as the collaborative work is about a file the system process is fine. What happens though, when I need to deal with a customer who calls in a service issue, the product they ordered from their account executive is on backorder and won't meet a critical deadline? I probably start by logging the issue in my CRM system of course and then maybe I look up the order history in the order management system...so far so good, I'm doing system-centric tasks. But if the answers are not clearly in the system the work changes. Maybe there is conflicting information in the system so I have to talk to the account executive or the warehouse supervisor (phone, IM, do we have presence or unified communications...email). Perhaps it's a logistics problem or a production problem...all of these are people-centric tasks. From a system perspective the customer service rep needs something to bring interaction with systems, information and people together, not a file.
Working with customers, internal and external business partners, suppliers, logistics providers, at the core they're all people-centric issues. Not that you don't need to share files or work together on files, co-creating documents, sharing information, all of those things support the work and need to be accounted for in a collaboration system, but the focus is on enabling people to people interaction. This concept also extends to process. Current systems do an adequate job of facilitating work process (one might argue some systems are much to rigid, but that's a topic for another post). The problem arises when the work doesn't fit the process. Workers today often spend much more time on problems that fall outside of the business process, or exception processing. Exception processing often involves working outside of systems and gathering temporary teams to work through the issues. These ad hoc work requirements are a necessary part of the business but can take an inordinate amount of the resources. Because they tend to be people-centric, most fall outside the enterprise systems and processes. We need collaboration systems that are social, or people-centric and capable of effectively dealing with the ad hoc nature of information-based work.
This extends to most enterprise systems as well. Project management is really about executing against a plan, or in other words about people working together to accomplish some end goal...which is by its nature social or people-centric. Content management is file centric but if you step above the files and start to think about curation of content, people are once again the key to accomplishment. Many enterprise tasks today have moved to a more people-centric method and the systems have not caught up.
So where am I going with this train of thought...I'm not sure yet. I do know that the concept of people-centric enterprise is important and that it needs to be built into our systems and processes. The shift in focus from process and technology to people is the key to working in a post-industrial information driven business, IMHO. I'm starting to think about a broader research project to try and tie this together across the enterprise and across the underlying systems but the thought is only just starting to come together.
M & A mania is heating up among social solution vendors. Attensity and Biz360, Lithium and Scout Labs, both increasing solution footprint and platform reach. For the last several years start ups have been springing up building out social business solutions and platforms. As is often the case, these new companies initially focused on a narrow part of the overall social business landscape. As they gain momentum (and customers) they learn what adjacent solutions their customers are seeking and start to look at expanding their footprint. This is a natural progression in tech business and something we've seen over and over. It seems that social business has reached the stage where customers are realizing value from their initial deployments and are looking to do more and carry their success farther,
Lithium's focus is on providing a complete social CRM platform for building and managing social support communities. While feature rich, with community management, mobile, knowledge base, reputation engine, content moderation, workflow, profile management, analytics and connectivity with leading CRM solutions, its focus was on the private label or branded customer community. With the proliferation of public social media and network sites and the growing popularity of using those sites for everything from purchase decision research to product support advice, it became obvious that the branded customer community was only a part of the complete picture of supporting and interacting with customers. The addition of Scout Labs' platform to the Lithium platform combines the branded community platform with a platform to monitor, measure and manage interactions on the public side of the social web. Now the branded support community can add the capabilities to hear what customers are saying in real time on public social networks and media channels, better monitor, understand and reach out to influencers outside the community to build relationships, add proactive customer support and engage customers more effectively in new product and marketing ideas with both platforms in the cloud. This holistic view of the customer, especially in the area of support, is essential and really starts to provide support to customers when, where and how they choose, which is IMHO the most important shift in thinking for effective social support initiatives.
Content of any type is not useful unless you can find it, organize it and interact with it. In the enterprise companies have tried many different schemes to try and get business content collected in a central repository, organized, tagged, version controlled, and searchable. This has often taken the route of "content management" systems. Content management systems to varying degrees, do an adequate job of getting some content into a controlled system environment. There are challenges with content management systems on two fronts though, getting content into the system in the first place (getting employees to participate in inputting content in some way) and getting the right content into the hands of the person who actually needs it. Search helps find content and tagging can increase searchability of course, but the whole system is only as good as the ability to input and tag the content, which inherently requires broad participation. To me it seems that the problem isn't management of content but the opposite, liberation of content.
Curation of content is a concept that is gaining momentum across various media types online. If you want to learn more about curation you can check out CurationNation. The idea though, revolves around involving human interaction with content to filter and organize. Combined with the power of the social web, curation has the potential to change the way we collect, consume, organize and share content online. Socialization of content could take the form of curation if a social system was applied to the process.
I had the pleasure this week of chatting with Patrice Lamothe, CEO of French startup pearltrees and since that meeting joining and using the pearltrees system. Here's a screenshot of my account:
The concept is fairly simple really. Pearltrees is a social network with tools and processes to capture, organize and share web content or pearls. As you browse and read things online you can capture those "things" in your pearltrees (web pages, blogs, Tweets, etc.). The social aspect of pearltrees then allows your content to be viewed, searched and linked together by others with similar interest. You can add pearls from others into your trees and share the pearls in pearltrees, facebook, Twitter, email, permalink and also embedded in other web pages. Here's an embedded pearltree from my account:
Overall I'm starting to think that pearltrees is useful and that curation or socialization of content has a lot of application in the enterprise. An enterprise private label version of pearltrees, although not available today, could form the center of a social content process that would address many of the current content challenges for businesses. I'm enjoying using pearltrees for my own research although I'm looking forward to a non-flash version so that I can use it on my iPad, which has become my primary content consumption tool. (They are working on an HTML5 version for later this year)
I was working on a Prezi for a presentation next week by the same title as this post and as I worked through the flow some ideas that had been hanging around in my head sort of came together. The nature of an analyst is, I suppose to try and fit things neatly into a taxonomy, especially technology. We've tried to sort out social business in those terms over the last year but in many ways it just won't fit, mostly because the technology is secondary to the overall business cultural change that is the real focus. That said, I have started to fit things into three categories and now that I've done it visually I think it might be useful to share. The three broad categories are technology enablers, social output and social outcomes.
Let's look at tech enablers first. These fall into three categories, social platforms, social applications and embedded social features. Here is an excerpt from the Prezi that explains this in more detail:
The next focus area is social output. These fall into two categories (at least), social media and social networks.
And lastly the outcomes, customer engagement, employee empowerment, partner enablement and supplier engagement.
And lastly I've embedded the entire Prezi so you can see this in context. Some of the introductory material you might recognize from my recent Directions Prezi but I think the whole flow is useful. Also, if you haven't heard my CardScan customer service story, which is only represented by a pic in the Prezi, then the short version is that I was turned from a disgruntled customer to a brand advocate through rapid service via the channel I preferred, Twitter. Take a look and let me know what you think:
A lot of the current focus on social business revolves around social CRM and customer initiatives. I guess that's not surprising since it is both a customer driven imperative as more customers adopt the social web, and also an area of quick and obvious business benefit (when done correctly anyway). I have this nagging feeling though, that approaching the transition to a social business from the outside in may not be the best approach. After all, the social customer that we hear so much about is also becoming the social employee, and I wonder if you can really successfully change your relationship with your customer when your own organization is "unsocial"? How can you, as an organization develop a meaningful and ongoing conversation with customers when your own organization is so silo'ed that marketing doesn't talk to customer service or product development doesn't talk to sales, etc.?
Don't get me wrong, I'm not suggesting that you can't or shouldn't start to engage customers in new and different ways, in fact I believe it's a must do action. Social customers are creating a wave of change that will be increasingly difficult to resist. What I am suggesting is that you also need to start to deal with the overall cultural transformation that is happening and address internal issues as well. Here are some ideas:
- Build a social company policy (see this post for ideas) and train your employees on what you expect.
- Liberate the content. Get data into the hands of the people who need it to get their jobs done. Old content management (read content protection or lock up) isn't the answer. To turn content or data into useable information it has to be easily accessible. We need people centric content tools, not file centric.
- Look at incentives: do you reward individual or group efforts? Are employees incented to work together and share? Do you establish common objectives and goals?
- Where are decisions made, only at the top or throughout your organizations?
- Who owns social in your company? If your answer is marketing (or any 1 existing department for that matter), which is the most common answer by the way, I think you have significantly greater challenges succeeding with your social initiatives. I believe you need a new approach to bringing social into your company, and that the initiative needs to be led by an empowered leader on par with your CIO.
- Social tools are already being used in your company. Yes I know you may think you block them on your network, but trust me, you have not stopped your employees from using available social tools for business. Take inventory of what's being used and why. More than likely you will find that employees are working around systems that simply are not getting the job done. You can't address this by shutting things down or punishing employees for doing what they believe they must to get their jobs done. Instead use this momentum to correct issues and bring the work-a-rounds out into the light and figure out real solutions to these problems.
Technology won't change your business culture. There are a lot of tools though, that can assist in the transformation. From an internal perspective we need to focus on people as the platform and enable them to interact with each other, with content, with data and with systems in a paradigm that resembles current consumer Web 2.0 tools. There interfaces have proven efficient and effective. One of the places to start then, might be with a social collaboration tool like Salesforce.com's Chatter, Novell Pulse or SocialCast. Breaking down the walls around people, content and data are critical to the broader concept of removing silo'ed organizations and engaging with external constituents more effectively (customers, suppliers and partners). Oh, and the tools better support mobile...
Social CRM is "the" hot topic these days with "experts" popping up everywhere. Last year I joined in the "let's try and define it" debate but I've moved on from that. I'm now convinced that simpler is better and I'll just agree with my friend and true social CRM expert Paul Greenberg that SCRM is really about having a conversation with your customers when, where and how the customer chooses. I've said repeatedly that social business is about changing culture NOT about new technology and that goes for SCRM as well. Now don't get me wrong, I love new technology, and certainly there are lot's of new SW products that do or could help facilitate social business and SCRM. The problem though, is that I'm starting to see SCRM talked about like it's some new module of the CRM system, you know, an add on module that magically makes your company's customer strategy social. I had a request from a client last week for a market sizing and forecast for SCRM, huh?
CRM is a customer strategy and many companies have chosen to use SW and technology as a part of that strategy. SCRM just extends that customer strategy in a few ways. Let's look at that idea a little:
What: The social web created multiple new ways for people to connect, communicate and build relationships.
How: Social tools like blogs, photo and video sharing, etc. that create social media; social platforms and apps that facilitate building social networks; social apps that open up new communication channels like micro-blogging, social platforms that facilitate the creation of communities that can use all of the previously listed methods of social interaction and the ability to carry the conversation anywhere on line that the customer chooses.
Why: Customer behavior has changed because of the social web. The availability of information has increased dramatically and the places customers look for information, support and advice have moved away from the company and it's own web presence. The social customer is just as likely to ask for help from their trusted network on Twitter or Facebook as at the company support portal. This means you, as a social company have to open up to these new communication channels and connect them to your older CRM systems and processes. Simply put, join the conversation.
None of his replaces the need for a CRM solution and customer strategy, it's an extension of strategy to change the way you engage with the social customer. Engaging your customers and building an "experience" for those customers will increase loyalty and involvement with your brand. It also open up new ways to increase customer satisfaction by delivering products that the customer wants, marketing in ways that meet customer expectations and preferences, and delivering support when, where and how they choose. By doing this you acknowledge that the customer owns their relationship with you and that you are willing to work to be relevant.