Is Social Business Dead?

Recently I’ve found myself reading a number of articles and blog posts decrying the untimely demise of the social business movement. So what do you think, has social for business run its course and now we should just move on, because there’s “nothing to see here”? Have businesses given it a good go and, finding no value, are they abandoning their efforts? Okay, right up front here, let me say clearly, social for business is not only not dead, it’s thriving and delivering lots of value to businesses! In fact, I believe that the changes associated with social business are absolutely critical for businesses in the information age if they want to attract and retain the best employees and partners and if they want to meet the expectations of their customers. In our last social business survey conducted Summer 2012, we found that 67% of North American businesses were already using some social tools for business, up from 42% the prior year. So if that’s true, why all the doom and gloom predictions?

I think that there’s still a general lack of understanding around what social business is and isn’t. If you think it’s just about implementing / using new technology your wrong, social business isn’t a new marketing campaign on facebook, integrating your customer support system to Twitter or using an activity stream product instead of email. Technology underpins social business, no doubt, but changing a business to operate in a way that is optimized for the information age and moving away from the old industrial age model is about people, organization, process and culture first. It’s about changing the way companies get work done and the way they interact with and service customers. There’s technology in there, and for sure we wouldn’t be having this conversation at all if the Internet didn’t exist, but the fundamental change that business is facing is a lot bigger than just implementing some new technology.

Why is social business so compelling and why is there an irresistible force pushing businesses down this path? There are several forces at work that create pressure to change. Fundamentally though, the Internet, or more specifically the hyper-connectivity it provides, is at the bottom of all of this. The Internet opens up new economic / business models, it changes the pace of competition, it globalizes the local, it redefines the term “relationship”, it provides an open, democratized publishing platform, it offers a new way of consuming technology (cloud / everything as a service) and redefines influence. Layer on top of that the proliferation of smart mobile devices that creates an always on / always connected society with the capability to leapfrog infrastructure and remove technology barriers, even in emerging economies. Finally add in the explosion of data and the growth of systems of decision that can take that data and make sense out of it, in support of real time, rapid business decision making.

In addition to technology pressures for change there are three things that are making the changes necessary and compelling:

  • Changing expectations / consumerization of IT – Consumerization of IT is about the source and pace of innovation and it’s shift from enterprise to consumer to consumer to enterprise. That same shift also has a dramatic impact on people’s expectations on the way they use technology and the way businesses use technology. Out of these changing expectations you get the “social” customer and employees that are looking for a new level of engagement at work that is really driving a new way of getting work done.
  • Doing more with less – Looking at labor force growth to productivity shows that in the mid-2000’s the two metrics started to diverge. As labor force growth slowed productivity continued to rise. One could assume that this increasing productivity is driven out of businesses continuing to automate processes using systems of transactions. Unfortunately there’s an upper limit to how much productivity can be driven out of automation, and although we’re not there yet, over time this type of productivity gain is likely to slow. If that’s the case where does the increased productivity come from? It has to come from this new way of getting work done, the shift to an engaged, empowered and collaborative work paradigm.
  • Systemetizing ad hoc work – Above the line of automation there’s a whole area of work that cannot be automated by current systems of transaction. This area today is where things like exception processing happens, where business decisions are made and where customers are provided service. This work requires a person or a group of people to get the work done, and often will require some specific data / information and maybe access to some system to support the decision process. This is the area that systems of decision and systems of relationship can provide the systemic support to increase productivity and enable employees to more effectively address the work at hand.

So what are the changes that a business needs to embrace to be a “social business”? I think you need to understand more of what this new business approach looks like first. From a business model perspective companies need to move to a new model that incorporates what I’ve started referring to as “sense and respond”, as the core model. This means that the business runs on real time data and real time collaboration, built on top of systems that automate and execute transactions. It means that leadership models have to change and the basic way employees work shifts. Organizational models will likely shift as well, and things like incentives, rewards and compensation in general will have to be aligned with collaborative work, not individual achievement. Underpinning all this change is new and different systems and technology that are embedded into the enterprise workflow.

We have started to think of social business across three key areas:

  • Customer Experience
  • Employee Experience
  • Partner Experience

Currently associated with these key areas are several solution focused areas of adoption and high value for businesses that involve process, people and technology. These include enterprise social networks (ESN), community platforms, innovation management, talent management, digital commerce, social sales enablement and intelligence, social marketing automation, and I’m sure many others.

We’re at a critical phase for many businesses trying to socialize business processes. I think that unfortunately many companies have expected the changes to move faster that is really possible. Changing behavior is hard and requires a lot of focus and support. Behavior and culture are intertwined, changing behavior changes culture over time, and the changed culture can move and change behavior. When we went through the business process reengineering phase in the 1990’s the change process, although hard, was faster and different than what we’re facing today. We’re talking about finding new ways of working together, not just adding automation and changing the business process to accommodate it.

So what does this mean for businesses?  I think that businesses need to build a strategy and stick to it, look for incremental change, find and build on successes and not try to “boil the ocean”. Smaller, steady changes are more likely to get to the goals. Social business is far from DOA, it’s thriving and more companies are finding value in the changes they are making. Focusing on customer engagement is not an option; finding ways to get employees engaged is critical to finding and keeping good, high performance employees; and engaging partners and involving them in the innovation process is critical for building out the network or ecosystem that will support new business models and increase the likelihood of success.



Michael Fauscette leads IDC’s Software Business Solutions Group which includes research and consulting in enterprise software applications, collaboration and social applications, software partner and alliances, open source, software vendor business models, cloud computing and software pricing and licensing. He also provides thought leadership in the area of social applications and the transition to the social business. With extensive executive experience with software vendors ranging from large enterprise companies to small Silicon Valley start ups, Mr. Fauscette brings a unique perspective by relating research data and trends to the overall strategic focus and go to market strategy of application software companies. Prior to joining IDC, Mr. Fauscette held senior consulting and services roles with seven software vendors including Autodesk, Inc., PeopleSoft, Inc. and MRO, Inc. Mr. Fauscette is a published author, blogger and accomplished public speaker on software, social business and software services strategies.

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Author: Ruby Wade