Why social tech's real value is inside the business

Although companies have been urged to adopt "Web 2.0" and social technologies for years now, the truth is that relatively few have done so internally in any serious way -- and use inside the business is where the most value can be gained. Instead, the corporate focus on social technologies has been in marketing organizations that use it to monitor what customers are saying about the company and to try to influence customer views -- what's called reputation management -- by adding Twitter, Facebook, and so on to the traditional advertising and marketing channels. (And individual employees use social networking technology to build business relationships for their own benefit, of course.)

Despite the slow actual adoption for internal business benefit, the allure of social technology remains strong because of its potential to be a key value generator in a workplace that depends on collaboration, communication, and insights. Gartner analysts Anthony Bradley and Mark McDonald say that serious use of social tech in business is thwarted by several reasons: executive fear, a misplaced focus on using social media solely for marketing, and a lack of "purposeful reasons" for building communities. That's too bad, they say, because the potential of social tech used within the business dwarfs the marketing benefit that so many focus on today.

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Some companies have moved past the pilot stage and are enjoying serious benefits from social technologies used inside the business. For example, at IBM, social networking isn't just for spreading the word to customers. Employees use an internal Facebook-like network to find colleagues with the skills they need to solve pesky customer problems. Business travel site Egencia uses an internal social media platform to host Know Your Enemy feeds that give salespeople the competitive intelligence to win deals. And software giants such as Microsoft and Google use crowdsourcing (large numbers of relatively low-paid users recruited over the Web) to test applications more quickly and less expensively than they could in-house.

A recent Forrester survey shows only 28% of U.S. workers use social networking, and most of them are early adopters who are only testing the waters for its internal purposes. For example, Dell is regarded as a leading user of social media. It maintains several internal blogs for employees and uses the Chatter add-on to Salesforce.com to share information among its sales staff. But chief blogger Lionel Menchaca says that most of the users are early adopters, and only about 5,000 of Dell's more than 100,000 employees have taken company-offered courses on social technology.

Gartner's research shows that, in 2007 and 2008, about 80% of companies were using social technology for marketing and 20% internally, but analyst Bradley recently wrote that "the mix has since shifted closer to 50/50." A fall 2011 Frost & Sullivan survey showed 56% of surveyed organizations using social technology for professional purposes; of those, nearly 6 in 10 used it for internal purposes such as internal communication, training, and (for 4 out of 10) to "foster team spirit" or to "increase job satisfaction."

Collaboration: Social tech's low-hanging fruit

One enthusiastic user is grocery giant Supervalu, which operates or supplies 4,200 grocery stores under about a dozen brand names. It now has 8,000 users of the social networking platform Yammer, a number expected to nearly double this year in a move to increase collaboration, says CIO Wayne Shurts. One example: Managers of stores operating under different brands used Yammer to coordinate a campaign offering college students small refrigerators stuffed with discount coupons to generate repeat visits.

IBM's internally developed Connections platform includes capabilities such as text chat, video, blogging, and document sharing, and it's searched about 1 million times a week, says Luis Benitez, a social software product manager at IBM. He himself used it to find an IBM expert who, unbeknownst to Benitez, was working at the same floor of the same building. Connections is also helpful for gathering answers to RFPs in a single place rather than creating a string of unwieldy emails, he says.

Connections also saved $4 million in one year by making it easier for employees to find information, and another $100 million by allowing customers and other outsiders to get information online rather than calling IBM, Benitez says.

Software vendor SAS says its use of the SocialCast platform helps employees quickly find both answers and skilled colleagues. Some 63% of its 12,370 worldwide employees have begun using SocialCast since it was rolled out in January 2011, helping to "build on a culture of transparency and trust," as well as "dynamic working relationships" that led to the highest employee and customer satisfaction rates in the company's history, a spokesman says.

Egencia, the business travel arm of consumer travel site Expedia, uses Chatter to share competitive information such as pricing among its sales force, says Courtney House, the unit's senior director of sales operations. She estimates about 40% of its sales force is actively using Chatter, with another 30% "lurking" (reading but not contributing often); the remaining 30% is uninvolved.

Email marketing vendor StrongMail used Jive Software's social media platform to create one collaboration community for customers and a second internally to help sales reps with such tasks as finding and sharing customized sales material, says Kristin Hersant, vice president of corporate marketing.

In an online world, collaboration tends to be through text-oriented venues. But that method of communication doesn't always fit the reality of complex tasks, understanding complicated information, and working together based on a shared corporate culture. One approach to make collaboration more humanly social is through the use of virtual interaction, such as via avatars. That's the idea behind ProtonMedia's 3D virtual environment for learning and collaboration.

It isn't cheap to develop the virtual SaaS environments; pilots typically cost $30,000 to 50,000, and full production systems typically cost $200,000 to $300,000. But compare that to contract clinical researcher Pharmaceutical Product Development, which usually spends $2 million a year sending field staff to central locations for training. The $650,000 it paid for ProtonMedia's service was still a bargain, says CIO Mike Wilkinson. Even better, he notes, the levels of engagement and knowledge retention in virtual training were as good as face-to-face sessions -- and in some ways better.

Unlike traditional classroom training, the virtual classes allow a student to "monitor data, and have their instructor in another part of the world or even their line manager in their region, monitor what they're doing" and provide real-time feedback, Wilkinson says. And although many people are "pretty shy" in a real classroom, they're more likely to speak up in the virtual environment because "it's kind of not you doing it, it's your avatar. It's a safer environment."

Crowdsourcing: Getting tasks done heaper, faster, and more flexibly

Another area where social technology has proven value is in crowdsourcing, a technology often associated with social media and gathering content for use in blogs, videos, and podcasts. But those are hardly the only areas where crowdsourcing can be applied.

CrowdFlower's "enterprise crowdsourcing platform," for example, taps 1.5 million online "contributors" for work such as trolling social media sites for information about sales prospects or ensuring eBay offerings are listed are in the right category. This can save as much as 40% compared to using a traditional outsourcer, the company claims. The contributors, who are recruited from gaming sites and other online venues, are paid as little as 5 cents for simple tasks and as much as $10 for more involved work such as taking a picture of a physical location.

uTest crowdsources testing to "contributors" whom it categorizes based on their technical skills, geography, and demographic characteristics. Direct marketing and teleservices firm RuffaloCody estimates uTest costs only 15% of what using its own staff for load, functionality, and user acceptance testing would have entailed, says Paul Ruffalo, the firm's director of information systems. He also says the crowd-based testers did a better job than in-house engineers of finding creative ways to break the software and ensure it will work, allowing the firm to find and deploy fixes more quickly than it could in the past.

Likewise, mobile video software vendor Viddy found uTest to be faster and less expensive than using in-house testers or an outsourcer, says David Dean, Viddy's head of operations. The service also made it easier to find testers who can check the application on various versions of the iPhone running on different networks, he says.

Crowdsourcing a basic function such as data entry can be 60 to 70% less expensive than traditional outsourcing, says outsourcing consultancy Everest Group. It cautions, though, that large customers worry there is less accountability with the crowd than with a traditional staff, and that Web-based contributors do a better job on well-defined tasks than on more complex business processes. Some firms are also nervous, it says, about protecting information shared with anonymous workers over the Web.

Tips for deploying social tech successfully

Like any other technology, business social technology must be deployed and managed right to deliver a return.

Several early adopters recommended deploying social tech platforms as add-ons to existing applications rather than forcing users to install and learn something new. As proof, IBM's Benitez points out that more than half the traffic on Connections comes from links to regular office applications and users' email clients.

Some customers are integrating the new social tech platforms with existing collaboration platforms such as Microsoft SharePoint. In those cases, SharePoint often becomes a repository for reference material, with real-time conversations migrating to social media tools.

Egencia did a "road show" educating skeptics on the value of Chatter, as well as an internal marketing campaign that offered prizes for users who found information using Chatter. Users organize information themselves as they create it through the use of hash tags and groups, which allow others to find information months or years after it was created.

Although it gets less attention than its fancy customer-facing social networking counterpart, business social tech can deliver both dollar savings and harder-to-measure benefits such as involvement, commitment, and speed. In a tough, uncertain economy, that's more than enough reason to try to bring social tech in-house.

This story, "Why social tech's real value is inside the business" was originally published by InfoWorld.

Copyright © 2011 IDG Communications, Inc.

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