A few weeks ago I was in Zurich presenting at Somesso. Part of my talk was around ROI where I had the opportunity to speak about why ROI is so difficult for social software.

First, it’s always worth checking whether or not your ROI case is needed to convince people that social software is a good thing, or to get your social project formally approved.  If you’re trying to use an ROI case to convince people that they should undertake a social software project it’s unlikely to work – Larry Hawes puts this best:

“No business case will sell social software to a firm that doesn’t already value collaboration in its culture.”

However, an ROI can be used to get a social software project approved. When I was working with Portal products several years ago, we often sold them on the basis of collaboration and productivity, but got them approved by making a case that due to single sign on the number of calls to the (outsourced) technical help desk would be reduced. An approval ROI can be very different from trying to convince a client of a project’s value. Social software can often be approved on the basis of time saving, even if the true value is innovation.

Second, it is easier to make ROI cases for social software projects which involve collaboration between people who know each other, as opposed to projects designed to help you find people you don’t know. This is because the former is more measurable, you know how many attachments you send to your team and how often documents are reviewed. Social software discourages attachments from being sent, which reduces storage cost, and speeds up the document review process, reducing inaccuracies due to poor version control. IBM, for example, believes it has saved $16.5m per year by moving email “conversations” on to instant messaging.

Third, there is a good reason why social projects to help you find expertise and innovate with people you might not otherwise know have such trouble with ROI. Traditional IT projects have an ROI because they help speed up business processes. They might allow a client to sign up over the web, for example. An organisation knows how many clients they sign up per month, how long that would take their staff over the phone, and what that cost is in terms of salary. They can therefore work out how much they would save if 50% of their clients signed up over the web instead. You can do similar calculations with IT solutions that improve a manufacturing process, or speed up invoicing. Social interaction is different. Whereas traditional IT supports business processes, social software helps you when the business process breaks. But you don’t necessarily know how often the process breaks, it’s not as predictable as number of invoices processed per month, or new clients signed up per week. You don’t know what benefits could be realised if Joe in Finance talked to Sarah in HR. It might be absolutely nothing. On the other hand it might fundamentally change the company for the better. Social software is a serendipity lubricant that increases the chances of valuable interactions occurring - but it makes no guarantee on their frequency or their value.

So what’s the best way to proceed? To quote my friend Euan Semple on ROI, “if you make the ‘i’ small enough, no-one will care about the R” – certainly helps. You can start with pilots at very low cost and low risk. As roll-outs get bigger, try to get the ROI approved on something more tangible, such as time saved on email, even if this isn’t the focus of the project. And finally as Larry says, if the ROI is needed to convince an organisation that collaboration is “a good thing” – then ROI is the least of your problems…

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Sometimes you spend so much time thinking about things you over-complicate.  Enterprise 2.0 can be very simple.

• Do you believe that there is business value in who you know as well as what you know?
• Do you believe that a strong network of contacts can help you get things done and make things happen?
• Would you like to help your employees get things done and make things happen?

If so, then the question is not why would you use social software, but why would you not?

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Finally got round to listening to Jive’s Business Social Software Jeopardy which contained some brilliant insights into the market. The overwhelming sentiment was “It’s not the tools, it’s the strategy” – which is something I keep telling clients time and time agian.

Some of the key points which I couldn’t agree with more were:

• Internal use of social software is a very different use case than collaborating on a document. I find these are often confused under the umbrella “Web 2.0″
• A successful technical deployment of social software for internal use does not result in people using it. They need help and support
• Starting small and looking for quick wins is the best way to get internal social software started

It’s great to see people from varied backgrounds starting to converge on the same thoughts around best practice.

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Great post by Sam Lawrence on how organisations have been scared of developments in collaborative software (email, instant messaging, and now social networking) over the years but now are regarded as mainstream. Could the same be true for Web 2.0/wikis/blogs?

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One of my favourite quotes about the need for social software was from someone at Lotusphere who was talking about the integration of Bank of New York and Mellon Financial in the States.  He stated that the problem was he had 17,000 people over here and 23,000 people over there who didn’t know each other and were supposed to drive synergies from the merger.  How was this going to happen?

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Interesting conversation at Go Big Always which starts off looking at how the simplicity of Social Software “cuts through the crap” of silos, file servers etc. that build up within an organisation and goes on to discuss the problem of balancing simplicity with legal/HR requirements.

The answer, of course, is that this is not about the software but instead about behaviours. If the projects are led by business instead of IT (eg “I work this way and by doing so closed these deals which brought this much revenue into the organisation and wouldn’t be able to without these tools”) then the legal/HR team is much more likely to “find a way” than if it is led by IT out of general interest in making the organisation more productive.

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One of the trends I’ve been noticing over the last 6 months or so is the focus of IT solutions being seen as a way of squeezing cost out of a business has faded. Instead, there is much more of a focus on how to drive innovation to grow the top line and differentiate an organisation in the marketplace. Obviously, we see Web 2.0 tools and corporate Facebook-style social networking as a great way to drive innovation.

It’s always good to see others reflecting this idea. I’ve just started reading The Only Sustainable Edge by John Hagel and John Seely Brown. They write “applications promised to standardize business processes … and deliver substaintial operating savings along the way”. However “savings no longer suffice: the savings are lost in competition and captured by customers.”
From the academic to the conversational, I tend to follow Ed Brill’s blog quite closely. He was asked recently what career advice he would give college (university) students. His answer was to contribute to innovation. Why? Because ” in so many industries, innovation is now the competitive differentiator”. Whereas organisations may have previously thought more about who the idea came from rather than what the idea is (Not Invented Here syndrome), social networking tools allow an idea to be developed via the wisdom of crowds by all sorts of people within an organisation, not just those at the top of the pecking order, or even those outside your company.

As Bill Joy (co-founder of Sun Microsystems) said “there are always more smart people outside your company than within it”. Further, there are always more smart people within the company who are not on the board than those who are. Companies that encourage and nurture ideas wherever they come from, by using a social network irrespective of who belongs to it, will find a truly sustainable edge for the future.

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Something I learned from my recent trip to Lotusphere was the idea that the motivation for content contributors is very different from the motivation for content seekers, and that to increase adoption rates it is essential to cater for both groups (as well as understand that an individual might fall into both camps, and therefore be subject to different motivations at different times even when using the same site).

Studies consistently show that it is usually only 2-3% of a community that are the stars or champions, and consistently post content.

Well, YouTube is now offering a very obvious motivation – money. This has been running in the US for a while but is now available in the UK. The details of how much individuals can earn are sketchy, but it is directly related to number of views and popularity.

I think that this is an inevitable move. YouTube makes money (or intends to make money) out of advertising and companies will only pay for adverts if there is an audience. There is only an audience because of user generated content, and if only 2-3% of the community are adding the significant content it would be very easy for them to go elsewhere if they felt they were being taken advantage of.

Does the model transition to other uses of social networks? Well, initially it would appear that it would only apply where an organisation is making money out of user generated content and that it makes economic sense to share the revenue. At first glance it would appear odd to pay people to keep their Facebook profile up to date or to use their corporate (inside the firewall) social networking tools such as Sharepoint or Lotus Connections. However, if Facebook makes money out of advertising, and competes on the basis that their users’ profiles are richer than competitors (you can tell a lot more about a person from their Facebook profile than you can from their Google searching) why should they not encourage users financially to keep their profiles as rich as possible, thus keeping their competitive edge in the advertising space? Indeed, in the corporate world end of year appraisals and bonuses have often been linked to team collaborating activities – why shouldn’t employees be paid on the level of contribution to their internal communities and social networks?

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Well – have just returned from Lotusphere in Orlando which is IBM’s conference for customers and partners for its collaboration software. I must admit I was a little apprehensive about the content – when I worked for IBM Lotus was exclusively (and somewhat obsessively) focused on what seemed to be a doomed struggle between Notes/Domino and Outlook/Exchange.

However, I was pleasantly surprised. Yes, there were announcements around and a focus on the Notes/Domino platform but the attention was very heavily centred around Web 2.0. Not only have IBM announced new versions of Connections and Quickr, but also new products – Lotus Mashups for line of business users to build mashup applications and also a software as a service offering called Bluehouse which is a software-as-a-service collaboration suite for small companies (aimed at 500 employees or less). It was certainly exciting to see IBM embrace social software and software-as-a-service so overtly and as a core piece of their strategy.

Even more heartening was to hear large organisations who have adopted social software discuss their experiences. It was summed up best by a speaker from the Bank of New York Mellon who said that after the merger of Bank of New York and Mellon Financial Corporation their biggest problems was having “17,000 employees over here and 23,000 employees over there who didn’t know each other.” IBM Connections is a centrepiece of their strategy to fix this problem.

Of wider interest was the behavioural observations I came away with. I was fortunate enough to talk to IBM employees, business partners and customers about their experience of selling, building, delivering and using social software platforms exclusively within companies, and what drove their success or failure. The following themes re-occured constantly:

• You must distinguish between team collaboration and community networking. They are different business problems which require different tools
• Those who contribute to social networks and those who seek content have different motivations and must be catered for accordingly
• Adoption will speed up if there is value in using the tools for their own sake, ie even if no-one else uses them

Given the amount of customer interest and resources that IBM are putting into their offerings I left convinced that Social Networking does have a place in the enterprise (even if the name does not do it much justice) and that our offerings of strategy analysis to find how social software will best help your organisation, and a 12 month adoption plan to ensure value is gained from any investment will be vital tools to help companies on this path.

What I would really be interested now is hearing from Microsoft or any Microsoft oriented partners who can enlighten us on their position in the world. I have read several articles regarding Sharepoint as a theoretical social networking platform, or whether their investment in Facebook will lead to a Microsoft/Facebook enterprise social networking offering but would love to hear more details.

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