Patchwork Elephants in the Ecosystem

These are the slides from my presentation at the Social Media in Enterprises session. In brief, I looked at 3 key areas of Enterprise value Creation:

Innovation

All the work we have done implies that being able to create and sustain innovation in an enterprise is key to long term survival. When we look at social media's capability in the space, it seems it's main beneficial use is to leverage more brains than are within the enterprise. Looking at the ways these are being done now, there seems to be a 2x2 emerging on 2 axes:

- Active v Passive social engagement, ie listening vs engaging

- Light vs Heavy analysis - buzz monitoring vs datamining

Lightweight, Passive Systems - Buzz Monitoring and Zeitgeist measurement are typical uses, heavily utilised by PR/MR companies

Lightweight, Active System - Crowdsourcing of simple market research, product information etc to understand. Prediction markets are a typical emergent application

Heavyweight, Passive Systems - Datamining, mashing of many data sources to deduce much more detailed information

Heavyweight, Active Systems - automating the Delphi Technique (getting expert opinions) is much easier on modern systems. Complex prediction markets and auctions for answers from the global hivemind have been used for pharmaceutical, mining, financial and other industries.

Operational Excellence

There are 3 main areas of value creation in the operational areas:

Revenue Creation - this falls into 2 areas, ie increasing sales volumes and per unit value. So far, Social Media has mainly been used for indirect volume generation (buzz, viral marketing, prospecting) rather than direct (sales) and not a lot in influencing increasing price (though there is increasing evidence of it being useful in cross selling).

Operational Cost Reduction - There are two main categories - reducing churn and reducing operating costs. Social Media is heavily used in customer service, and shows promise in churn reduction - very valuable in high churn industries. Social Media in its eraly days was heavily touted as a tool to reduce operational costs - wikis etc being the tools of choice - but like all office automation promises, it is yet to live up to the promises made (and if you look at the discussion in the session, you can see why - this requires a lot of replumbing of the workflows to operate)

Capital Cost Reduction - there are two main areas - maximising exiting capacity utilisation, and reducing future capacity utilisation. So far there has been very little social media penetration in this area, though we have seen companies using things like webcams and IM for long distance analysis of equipment failure.

Rapid Reaction to Change

Being able to sense the movement in a market and react faster than the competition is a key facet of survival and sustainable ability to beat the competition. The OODA model (for observe, orient, decide, and act) is a typical feedback loop cycle - we like it as it was developed for the military, who have understood the benefits of faster reaction than the opposition. Other terms for this are things like Agile or Lean operations, Just-In-Time systems etc. What they all rely on is rapid delivery of clear information and the ability to parse it and act on it.

In theory, Social Media has an impact here due to its observed ability to spread data fast and marshall resources - we think this is potentially a major area of use, but - again, as noted in the sessions, the amount of re-plumbing designed to get the benefits.

Challenges for Social Media

We believe there are 5 main challenges for Social media adoption:

- Early Day “Chasm” Technology – The basic technologies are not yet fit for mainstream usage in enterprises, a lot of grunt work needs to occur.

- Hype Curve impact – a lot of snake oil salesmen queer the market, destroying credibility

- Security Concerns – Enterprises have many valid concerns about security that need to be addressed, consumer social media has very poor security capability today and little that Facebook et al are doing inspires confidence (as Bruce Schneier points out, they are probably going in the wrong direction)

- ROI not clear – nothing outside of early day pilots gets done in an enterprise without a business case, an ROI is a pre-requisite

- Organisation Re-design - social media, like previous new working approaches such as JIT, requires significant organisation redesign. This takes time.

How it rises to these challenges will define its success over the next few years.

(By the way, that was the 2000'th Broadstuff post)