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Where is the Customer in Enterprise 2.0? 

Web 2.0 is about collaborative web applications that enable users to easily share content and network. This site is an example, because anyone can blog or add comments. Facebook is hugely popular for social networking among “friends,” LinkedIn allows business people to build networks of “contacts” and Twitter enable anyone to post anything to followers… up to 140 characters at a time.

For the most part Web 2.0 services were created for individuals and consumers, not for businesses. Now Enterprise Social Software is gaining acceptance as a kind of fork in the Web 2.0 road. Enterprise-grade applications are being launched (or in some cases re-branded) in two major flavors:

  • “Enterprise 2.0″ if they support internal collaboration
  • “Social CRM” if they support customer collaboration

I’ve written about Social CRM technology before, so for this post I’m going to concentrate on Enterprise 2.0 based on an afternoon I spent at the Enterprise 2.0 Expo in San Francisco. I wanted to learn more about what the vendors were selling and, more important, why a business executive should invest in this technology.

Why doesn’t Enterprise 2.0 include the customer?

Vendor reps generally said that Enterprise 2.0 was a convenient buzzword to reflect the adoption of Web 2.0 applications within the enterprise. Nearly everyone said it was mainly about helping employees communicate and collaborate more effectively, using blogs, wikis, forums, microblogging, profiles, etc.

Wikipedia (as of the date this blog was posted) offers the following:

Carl Frappaolo and Dan Keldsen defined Enterprise 2.0 in a report written for Association for Information and Image Management (AIIM) as “a system of web-based technologies that provide rapid and agile collaboration, information sharing, emergence and integration capabilities in the extended enterprise”.

The term “enterprise social software” generally describes this class of tools. As of 2006, “Enterprise 2.0″ had become a catchier term, sometimes used to describe social and networked changes to enterprises, which often includes social software (but may transcend social software, social collaboration and software).

This suggests that E2.0 really should include customers, partners and suppliers, but this clearly was not the focus of the vendors at the Expo.

That said, some vendors do “go both ways”—inside and outside the enterprise—such as Jive, Telligent and KickApps. But generally it seems that E2.0 vendors are making a marketing choice to focus on the employee productivity problem, rather than customer engagement as targeted by many Social CRM vendors.

Why invest in Enterprise 2.0?

The main “pitch” for why companies should invest in Enterprise 2.0 is that it increases employee productivity. It really reminds me of when email was introduced 20+ years ago, as an alternative to phone calls, letters or faxes.

Now email is the enemy, according to most of the vendor reps. With Enterprise 2.0 applications, some say you can eliminate 30% or more of email messages and get the right people working together (collaborating, even) to get work done faster.

Another potential benefit is providing a better work environment, because employees want to use the latest tools (especially younger workers used to Facebook). Theoretically this will improve “employee engagement.”

Although Enterprise 2.0 is touted as the Next Big Thing, it’s really an evolution of email, groupware, forums, intranets and portals—with a Web 2.0 flavor. Most vendors agreed that a solid ROI was difficult to prove and that a sponsoring executive really needed to support a new paradigm of communications. Either that, or count on customers to follow the Enterprise 2.0 hype!

Lots of choices… and now Microsoft

All that said, there really are a lot of robust solutions available, quite a change from a couple of years ago.

If you want a full suite of E2.0 technology, consider Jive, Mzinga, SocialText or Telligent. If microblogging is your thing, then SocialCast or Yammer are worth a look. Although increasingly microblogging a la Twitter is becoming integrated into larger suites.

For CRM-related vendors, nGenera has a new “collaboration server” that ties together internal and external social activities. Speaking of CRM, the only reference I saw to “Social CRM” came from KickApps, although the booth rep seemed to confuse CRM with CMS.

Remember Broadvision, the darling of the dot com days? Well, the company founded waaaay back in 1993 is still around and now offers an enterprise social network called Clearvale that ties into its portal solution. Other interesting players include PBWorks (formerly PBWiki) and Twiki.

In a sign that E2.0 is coming of age, Microsoft was showing SharePoint 2010, which will be generally available (you guessed it) in 2010. This has be worrisome to some vendors designed to fill the collaborative hole left by Microsoft’s current SharePoint product, which some dismissed as an overgrown file server. However, the demo I saw showed a lot of the usual collaboration functions, so I expect that companies already invested in the Microsoft stack will be looking to Redmond next year to “go social.”

Technology in search of a strategy?

I left the Expo convinced that the E2.0 market is real, much more so than Social CRM which is still largely marketed as an extension to CRM solutions. But on the other hand, the business case for E2.0 seems more narrow and tenuous than Social CRM. Delivering value to customers isn’t the point of E2.0, it’s all about making employees more productive.

Seems to me there is a crying need to connect all this technology with a real business strategy, which should fuel opportunities for consulting firms. Funny, though, software vendors didn’t mention the need for a social business strategy before implementing tools. Shades of CRM!

This expo visit also convinced me that it’s a mistake for the tools and the strategy to be called the same thing. Enterprise 2.0 is a good term for technology part of internal collaboration, but I think Dachis Group is very smart to use the term “social business design” for the strategy portion.

I’m all for employee productivity and collaboration, but a stronger business case could be built on doing more of the right things that add value to customers, not just doing the same things faster. Here’s hoping that customers will have a voice in the social businesses that will be designed.

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11 Responses to Where is the Customer in Enterprise 2.0?

  1. Courtney Wiley Taylor November 6, 2009 at 2:28 pm #

    Good comments, Bob, especially when you said that you hope “customers will have a voice in the social businesses that will be designed.”

    I’d like to point your readers and you to a specific white paper (written by Neighborhood America, @NBHD_America) on the topic. The title is “CRM: Integrating enterprise social networks to create conversation through customer engagement.”

    The paper explains how the integration of social solutions can help orgs leverage this new world through existing CRM systems, enabling the next generation of CRM 2.0 to engage the social customer.

    Download it here for free (it’s last on the page): http://www.neighborhoodamerica.com/white-papers

  2. Chris Yeh November 6, 2009 at 6:05 pm #

    Bob,

    Thanks for mentioning us (PBworks). We’re in violent agreement that Enterprise 2.0 badly needs a discussion of customer needs and business problems, rather than general talk about making business social.

    The history of the high-tech industry shows that aspirin sells, but vitamins don’t. That’s why we’ve focused on specific solutions for specific industries, such as our Project Edition that allows professional services firms to better manage client projects, and our Legal Edition for law firms.

    At the end of the day, if you want someone to pay you money, you have to solve at least one of their problems. Coolness is not enough.

  3. Bob Thompson November 6, 2009 at 6:38 pm #

    One of the vendor reps actually admitted that companies were buying E2.0 solutions because they were cool, and because someone was trying to make a name for him/herself.

    So I suppose “career advancement” is an example of a “problem” solved!

    The E2.0 hype reminds me a lot of CRM 10+ years ago, where companies rushed to implement something with only a vague idea of what they were doing or why. The entirely predictable backlash gave CRM a bad name and media reports of 80% failure rates.

    Of course, many projects failed because there wasn’t any definition of success at the start. Nor a willingness to work on the non-technology issues that really drive success.

    I predict that E2.0 (and its kissing cousin Social CRM) will suffer a similar fate. A year or two from now, “social” will be a four letter word, vendors will get blamed for selling tools that don’t work, and we’ll search for the next big thing to hype.

    That’s too bad, because I believe there really is value in a “social business” if it helps employees get the right work done faster and will higher quality. But vendors need to figure out how to explain it, and consultants need to help create a real implementation strategy that goes far beyond implementing tools.

  4. Bob Thompson November 6, 2009 at 7:06 pm #

    Don’t count Dennis Howlett as an Enterprise 2.0 cheerleader.

    In Enterprise 2.0 – the non-debate, he says:

    I’ve argued for years that the notion of anything that has ‘social’ attached to its moniker is about as welcome as breaking wind in a spacesuit. I’ve also argued that I’ve never heard anyone ask for some Enterprise 2.0 though I’ve heard plenty ask for ERP, CRM etc.

    Funny that CRM is being described as the safe choice now. It only took a decade or so for that to happen!

  5. Chuck Knight November 7, 2009 at 2:04 pm #

    Your article seems to foster good INTENTIONS, but the methodology seems suspect: One show, a couple of comments from a booth representative (who, after a few iterations, would say anything that gets her/him the scanned lead in) and voila, we have a business case that compares CRM and Social Enterprise… uhhhh? Can I ask, where is the data?

    For example, how come that statistics about how the products sold by those vendors that you mention are upside down related to your conclusions? Many of the vendors that you mention on the enterprise side have most customers using them outside the firewall. Or that you talk about Microsoft 2010, which is currently vaporware, and even as a demo too basic to fit the bill, on par with established, widely deployed solutions?

    Yes, the ROI for social is still being understood. That doesn’t mean that we should all go pick up a handful of random facts, put them together with an arbitrary conclusion, and call that “an argument”, or even “a case”

  6. Bob Thompson November 7, 2009 at 3:07 pm #

    Chuck, thanks for your comments.

    You’re right, my post was based on a few interviews. Certainly not rigorous research.

    I talked to about a dozen vendor reps selling Enterprise 2.0 solutions and asked them to explain what they were selling and why business managers should invest. Not one offered much of business case other than to say it should increase employee productivity.

    Other commentary about the Enterprise 2.0 conference sessions have observed much the same thing. The converted thinks it’s a good idea, but can’t explain exactly why to others.

    The question you and others should be asking is: Why don’t the vendors selling Enterprise 2.0 have data?

    Personally, I believe there is value in Enterprise 2.0, and clearly some companies are investing and case studies are appearing. But the people selling the tools, and the gurus promoting the concept, need to present a more compelling case to invest, in my opinion.

    As for Microsoft 2010, I didn’t say it was on a par with other vendors, just that the demo showed the usual assortment of social functions. A major vendor moving into Enterprise 2.0, even with an inferior product, will disrupt the industry next year.

    Here’s a good diagram from Dion Hinchcliffe from Determining the ROI of Enterprise 2.0.

    Dion notes:

    “…while we’re seeing widespread interest and acceptance of Enterprise 2.0 in the workplace, there is still mostly a wait-and-see attitude amongst IT managers and business leaders at the moment.”

    Why the skepticism?
    1. “broad wariness of a new horizontal information technology”
    2. “corporate culture and its fundamentally hierarchical nature”
    3. intangible assets like knowledge and social capital “rarely have direct impact to financial outcomes such as revenues and profits”

    And therefore: “The net result of this lack of clarity is a hold up on the explicit use of Enterprise 2.0 for strategic benefit by businesses, even as the tools are proliferating, often virally, in many organizations.”

    Again, I’m a believer in the strategic value of Enterprise 2.0. But it won’t gain widespread acceptance or success unless the promoters can “cross the chasm” to explain why business managers should invest.

    I invite anyone reading to share their links to research and studies that help with the ROI question.

  7. Brian Magierski November 9, 2009 at 1:19 pm #

    Bob – nice post and a good comment thread, and thanks for mentioning @ngenera. It is certainly incumbent upon the vendors to produce case studies and ROI in this space for the products they provide, and the challenges / concerns you raise are real.

    To further clarify nGenera’s position in the market, we are taking a solutions approach to this space – what we call Collaborative Enterprise Management (CEM) solutions. We start with our customers and their business problems, and then produce a solution to their problem/opportunity that runs on collaborative software – including our own.

    An example of a business problem could be an energy company seeking to deploy a new power plant or pipeline. A new CEM way to do this would be to set up a community outreach strategy – powered by collaborative software – to solicit design ideas and build buy-in before deploying, thus resulting not only in less community backlash, but really in a better approach and strong support for those that are impacted and a better overall business result.

    Thus, taking this example into account, the solutions involve both internal and external (and company-to-partner / channel) collaboration.

    Our approach has been to tie the internal and external together with Collaboration Server, which you mentioned. We also allow for the internally focused Enterprise 2.0 collaboration and have external Social CRM applications as well (Knowledgebase, Chat, Community, etc.) … all tied together by Collaboration Server. Internal solutions could also include SharePoint or others you have mentioned.

    Unfortunately, I’m sure this looks like a commercial, but I think the use case above highlights the need for the industry to address a couple of issues rightly called out in your post (a) having a business outcome and business value associated with the use of collaborative technologies and (b) solutions are not an either/or on the internal vs. external, but a both and they need to be connected.

    To avoid the CRM issues you highlighted in the past, starting with the business problem / opportunity and delivering the solution will at least direct the stampede toward creating business value and not just deploying applications for a value that is to be defined later.

  8. Ray Brown November 9, 2009 at 5:30 pm #

    Hi Bob Thank you for the post. I found it informative and “fit for purpose.” Interesting that you can’t be all things to all prople! One thought that came to me as I read the responses to your article. As Stephen Oovey would say “start with the end in mind.” Are the vendors and purchasers of these tools really clear with the end they have in mind ? One of the key issues with CRM for example was that it was used to “solve a data problem” rather than for example to “create a clearly defined and improved customer experience.” Busineses need vision first, strategy second and a great implementation plan third (and only if 1 & 2 are very clear).

  9. Bob Thompson November 9, 2009 at 5:52 pm #

    Thanks, Brian. I like this approach better than starting with tools that look cool and then trying to find a problem that they solve.

    My advice for uncovering real business problems is to talk to real business leaders. Those running companies, business units, or functional departments.

    Then figure out whether collaborative tools can help solve the problems that appear near the top of the list. Those are the only ones that will get funded.

    Perhaps some of these execs will say “employee productivity” is a key issue, but I’m skeptical.

    I’m not questioning the value of new horizontal communication technology, it’s just that these sorts of infrastructure investments are difficult to make, especially in tough economic times.

    The E2.0 crowd needs to tackle more core business issues and stop talking so much about new paradigms and improved knowledge sharing.

  10. Chris Jones November 10, 2009 at 11:21 am #

    Excellent post Bob. Great summary of key e2conf takeaways, and a good recap of vendor offerings.

    I’d like to look beyond hype and e20 market segmentation for a moment. Again, no issue with your assessment. It’s just that there’s some critical work to be done.

    We need to change the game.

    Companies that don’t care what the customer thinks won’t do well for long. They may not survive. And if the customer is on Web 2.0 outside your firewall, wanting to weigh on your products and services, you’d better be listening and prepared to answer. That’s hard to to if your executives have written off Social Media.

    I agree that consultants like Dachis and notions of “Social Business Design” can begin to move e20 solution language in the right direction.

    But I think it really starts with a change in corporate culture: a focus on learning that leads to daily local, scalable innovation; a focus on collaboration, which opens minds to sharing and working across silos (not tearing them down); a focus on team work; critical thinking; dynamics of complex systems; willingness to take risks; permission to change the rules.

    Our hierarchical-thinking is over 100 years old, rooted in mass production, the ‘factory model’, and the industrial revolution. Removing defects by ensuring control has been the hallmark of industrial success.

    That much mind share will not be easy to shift.

    But that is where transformational change needs to start. And we know corporate culture can be very, very hard to change.

    Yes, productivity is the goal, and I think it can in fact be measured, if we’re brave enough to look at how unproductive we have become. It’s an unattractive base case, but that bodes well for significant gains. That should make the e20 vendors happy. The trick is getting executives (and the middle managers, holding the cards) to face facts. When the dead fish are on the table and the baselines agreed upon, the vendors, OD gurus, KM teams and yes, even “Social Business” designers, can get down to the hard work of transforming work methods of the American silo-business. It will be our last ditch effort to try to keep up with the more nimble, hyper-connected, global competition.

    It’s a brave new world out there, and your customers already know it.

    Enterprise 2.0? We can’t get there fast enough.

  11. Vanessa DiMauro November 19, 2009 at 1:07 pm #

    Bob, you raise a really important issue here – while drawing examples from the conference, in so many ways you are illuminating a philosophical issue – a pervasive omission – that perhaps suggests we still haven’t completely got it right yet in how we – enterprise at large – approach this new social economy. I am not surprised entirely that there was a lot of “tool talk” as technology is a place people often go as a rooting comfort zone. Helps avoid the bigger challenges like strategy. Thanks for calling out these excellent thought questions to keep the press on.

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