posted 9 Apr 2009 in Volume 12 Issue 6
The business case
Tony Byrne examines the business case for – and against – social software.
Agreement around the core concepts of ‘social software’ has been quite elusive, yet certainly the underlying phenomenon is quite real. Technologies for social computing have emerged across a panoply of different types, including collaboration suites, pure-play blog, wiki and forum products, hosted community solutions, and revamped Web 2.0 modules from major software vendors.
But just what constitutes social software? CMS Watch defines social software as:
“Tools for collaboration and networking within and beyond the enterprise.”
Social software can certainly feel ‘mushy’, but there is a business case to be made, based on some potential hard benefits and (even more importantly) ‘soft’ benefits. These must be weighed against the costs and risks of any implementation.
Let us address the financial side of the equation first. Social software could enable you to:
You may be able to reduce hard costs by improved internal communications, particularly in the areas of conference calls, video conferencing, and even conference room usage (not to mention employee efficiencies from fewer formal meetings – who wants to sit on a 25-person conference call?).
Social software may reduce your volumes of e-mail, thus potentially saving storages costs (although you are also adding new repositories). Of course, e-mail isn’t going away, but consulting firm Capgemini claims it reduced e-mail traffic by 25 per cent after rolling out instant messaging and file-sharing company wide via Microsoft Groove.
Some major technology companies, such as PC maker Dell, have reported reduced customer service costs by deploying successful peer-based support forums. Leveraging public networks can reduce employee recruitment expenses.
Done right, social software should reduce business inefficiencies and bottlenecks. Indeed, most initial successful adopters cite productivity gains as the most tangible early benefit. Underneath this phenomenon lies ‘Metcalfe’s Law’ – the value of a network grows exponentially with the addition of each node.
In other words, the more people who participate in a network, the greater its value. More people exchanging ideas and information faster than before means greater productivity for the organisation. Consider this example: if your colleagues are repeatedly bothering you with the same questions, you can point them to the authoritative answer in your blog, saving everyone time and hassle.
Increase customer retention
Increasingly, customers do not just want to consume, they want to engage. This is particularly true in the media space, but no less prevalent in consumer markets where customers frequently have an emotional connection with a brand. Done right, social software can help you maintain a closer relationship with customers, and keep them more closely aligned to your brand. In the media space, it can mean more page views, which means more ad’ views and, therefore, increased revenues.
However, hard figures on enterprise costs savings are difficult to come by, and savvy managers in particular will take assumed labour savings with a grain of salt. Note that vendor and consultant calculations here also chronically underestimate the additional effort involved in implementing and then managing the social software technology itself.
Some of the intangible benefits of implementing social software also count among the more powerful rationales for making an investment. Social Software can enable your enterprise to:
Improve internal communication
E-mail is a great messaging tool, but quite inadequate for ongoing communications. Users send around multiple copies of files, it is completely push oriented, and carbon-copy lists can become all too random. You can control who you send messages to, but not who you receive from. Important information gets canonised in long streams of commented messages.
In contrast, social software – including forums, blogs, and various other services – can help your employees, partners and customers engage in ongoing conversations on topics big and small, and when recorded over time others can leverage them as well.
Improve internal collaboration
By enabling cross-pollination across far-flung parts of the enterprise, social software can improve collaboration at the enterprise level in ways that far exceed departmental installations of collaboration tools where everyone knows each other already. By using a ‘pull based’ approach to information dissemination, employees are not pushed together in maudlin ‘team building’ exercises, but rather, can collaborate across time and space when it adds value to both parties.
Improve employee morale and retention
By and large, people are social animals. There is substantial evidence that when working together, people derive more pleasure from work. (They also say that they are more productive.) Enterprises that have surveyed employees have found the availability of social networking tools to represent an important (albeit not the only) factor in job satisfaction.
As markets change and customer bases shift, your enterprise needs to respond in kind. Over time, social software can enable your organisation to better take advantage of its collective intelligence, making you more agile in your decision-making and adaptation. First, you encourage more competition-driven outcomes, where multiple ideas and answers can emerge and the best ones can win. Emergent systems also foster greater flexibility and responsiveness than the top-down, rules-based approach inherent in most enterprise software.
The case against social software
Of course, reasonable people can also make a persuasive case against social software.
First, you should not assume that new technologies and associated methods themselves will make organisational hierarchies and politics go away. Some firms are simply more pre-disposed to disruptive, bottom-up systems than others. It is no accident that many early case studies revolve around technology companies.
Moreover, social software assumes that knowledge workers are under-utilised and simply need more of a ‘voice’ to break through and magically transform the enterprise. This may not always be the case; it could be that your best workers are already very busy, already have enough channels for funneling their good ideas, and good managers are already filtering that work and those ideas, so everything else is just a distraction. And it’s quite possible that your best employees – or a significant subset of them – are introverts who will never take completely to social computing anyway.
Multinational or multilingual enterprises have found social software adoption a greater challenge. Employees comfortable with communicating orally in a non-native language may have greater difficulty understanding the informal back-and-forth evident in most social tools. To be sure, e-mail has the same problem, but it is not perceived as persistent or “public” as something like a bulletin board. Employees in different cultures also have different privacy norms, as well as different ways of addressing colleagues (sometimes reflected in grammar and conjugations) depending on their relationship. Not all business culture is as informal as is generally practiced in
Finally, even ‘free’ social software will end up costing you money. At the least, systems need to be integrated, maintained, patched and upgraded. Some tools – such as those from IBM and Oracle – are actually quite pricey, especially when rolled out across the enterprise. Is investing in social software the best use of your resources, especially given other pressing, alternative needs?
Answering that question requires balancing costs with likely benefits.
This article is an excerpt from the CMS Watch
Tony Byrne is founder of CMS Watch (www.cmswatch.com), an independent analyst group that evaluates content technologies for prospective solutions buyers.