Socializing the extended value chain
It’s probably since the very moment I started focusing my attention on Enterprise 2.0 that I wanted to understand how it might have worked a company where formal and informal exchanges supported each other, where communities were eventually integrated into processes, where knowledge assets could be accessed, used and constantly renewed through the participation of all the actors involved. Not so much a world entirely made of 2.0 but more one in which social is seen as a mean to accelerate the achievement of those same goals companies have always imposed to themselves.
Over the years, this curiosity, evidently shared by many other observers and organizations, has resulted in a substantial convergence of employee participation (Enterprise 2.0), customer engagement ( Social CRM ) and open innovation under the common umbrella of Social Business. Nevertheless, beyond the high-level view and roadmap , up to now a series of obstacles and strategic myopia have severely slowed down the adoption of mechanisms oriented to co-create value through the boundaries of the enterprise.
From a business, organizational, technological perspective, companies have particularly struggled to
- Business: to frame social in a way that was understandable to senior management and could give business results
- Adoption: to ensure the attainment of a critical mass of participation needed to achieve the return on investment
- Technology: to reposition existing enterprise systems and services within the new paradigm
- Strategy: to understand, from an organizational and a workflow point of view, how to put together communities for customers, communities for employees and partners, encoded processes
In fact, these questions are largely manifestations of a difficulty perfectly explained by my friend Laurie Buczek of Intel’s “The Big Failure of Enterprise 2.0 Social Business“:
The big failure of social business is a lack of integration of social tools into the collaborative workflow…
The foundation for which enterprises are building their social collaborative house is cracked. If you add more layers, the fissures widen. If you don’t provide the “easy button” with integrated tools that are “just there” in your workflow, adoption will not cross the chasm. Culture will not change. Enterprise 2.0 social business becomes the bad sequel to Knowledge Management.
In other terms we have finally figured out that there is no Enterprise 2.0 without the enterprise. There is no social business without business.
The same idea of putting collaboration within the context of everyday work had been in fact already proposed in 2007 by Michael Idinopulos in his In the Flow and Above the Flow post, several times by Sameer Patel, in a very comprehensive way by Nenshad Bardoliwalla and more recently by Andrew McAfee. As candidly admitted by Laurie, nonetheless the same Enterprise 2.0 pioneers haven’t been able to build on this idea of integration. Even socializing as a single process (such as Social CRM or Social Product Development) doesn’t necessarily contribute to an overall view of evolution of the extended chain value.
However, with the recently concluded Dreamforce 2011 (here you can read many good ideas again from Sameer) in my opinion something changed. From a vertical focus on single processes, we are finally starting to spend time socializing the entire business ecosystem.
How to proceed in this mission? To socialize the business, you cannot start from social. You must first visualize the fundamental constructs on which each company is based. Reusing the value chain of Michael Porter and Neshad post, I tried to summarize some of the main processes that govern the existence of a business in the diagram below going from partners identification and selection, the creation, promotion and sale of products, up to support and customer relationships:
In other words, every company creates value by:
- involving partners, suppliers, employees and customers inside, outside and across enterprise boundaris (extended ecosystem)
- facing a series of horizontal phases (supplier management, product design, sourcing of materials, manufacturing, logistics, marketing, sales, customer service, customer relationships)
- carrying out primary processes cutting across the phases (CRM, product development, management of suppliers and raw materials, marketing leads and deals generation, support, etc.) and support processes (such as HR management, technology services and infrastructure, costs control)
Socializing a business then means socializing the basic constructs, namely the processes that make it possible for a company to run around the individuals that constitute it.
How can collaboration, information flows, active participation of all stakeholders be applied in a timely, coordinated and integrated manner to the entire extended value chain?
In my opinion this is the way:
There are 4 stages of socialization of the value chain:
- Isolated and above-the-flow communities (of employees or customers). This is often the starting point for any company that begins to experiment the participation of customers, employees and other stakeholders through communities born bottom-up or in any case not explicitly connected to existing workflows. The initial investment is low, there is no integration, but the project frequently struggles to reach a critical mass of adoption and tangible returns are very difficult to measure. Almost all vendors of enterprise social software (Jive, Telligent, Yammer, NewsGator, Socialtext, etc.) have started from here.
- Above-the-flow communities in support of a traditional process. The next step is to recognize the complementarity of processes and communities by enhancing an existing workflow (that remains unmodified) with social tools to capture exceptions to the process, not codified informal exchanges, the tacit knowledge needed to run the process. Structured and unstructured work are still not integrated, but only loosely joined (this approach was also covered by Cecil Dijoux). Returns become more tangible since you can go through the process to measure the benefits but users suffer the hassle of having to switch context to get their job done (traditional process) and collaborate (above-the-flow community). Adoption is at risk. After an initial scarce interest towards enterprise systems, the leaders of social software are all developing connectors, adapters and other mechanisms to integrate with document management systems, CRMs and other services that supports traditional flows.
- Socialized process. In order to ensure user adoption, traditional process and collaboration have to come together by providing a single place where work is performed. Comments, posts, status updates, documents created in a group setting are finally placed back in the flow of work, just becoming additional features of the old system. The process itself is now social and it integrates with internal and external communities (eg support communities for customer care, product communities for CRM). Even if socialized, processes still remain silos, social silos supported by technological solutions that do not talk to each other. We will have a vendor for Social CRM, a vendor for the Social PLM (see Jim Brown’s post), a vendor for HR 2.0. This third stage is started already and it is at the center of the new value proposition of Oracle WebCenter, though will take many years to be fully accomplished.
- Integration of socialized processes. Dreamforce and the vision proposed by Salesforce are here to show that you can do much better than creating a myriad of siloed socialized processes. By providing a set of common services (collaboration to be used for evolving traditional applications, unified management of identities, a mechanism for integrated social and transactional business intelligence, activity streams as a layer to collect updates from every disparate system and makes them the social object of collaboration throughout the enterprise) not only participation falls in context, where it can really affect and ensure consistent returns, but all the processes start to produce status updates that mingle into a single stream (see Tibbr of Tibco, Salesforce Chatter, to a large extent the idea behind new Oracle WebCenter-based social network). Thanks to this stream individuals can stay up to date in real time with everything happens inside the company and, above all, they can work together in context of those events (i.e. commenting, adding information, launching a video call). This also includes providing feedback that goes back bidirectionally to the original process (i.e. you are allowed to change the status of a commercial opportunity stored in the Sales Force Automation system without leaving the stream). In very simplified terms, Force.com is a cloud based platform that allows independent entities to build their own applications, add social capabilities chosen from a standard set and automatically benefit from the integration layer represented by Chatter (see for example what specialized vendors such as Workday, Kenandy, Infor, Concur are proposing).
I rarely cover technology in this blog. Even this time, much beyond the technical solutions now available to pragmatically implement a social business scenario, what I want to emphasize is the long-term vision that is becoming increasingly clear.
Blindly introducing additional communities and social networks within your company is not sufficient to increase social business maturity. In order to avoid lack of adoption or the construction of silos, although social ones, businesses need to enable the participation of their employees, customers, suppliers and partners directly into the flow of existing processes.
These processes will have to evolve according to Enterprise 2.0 principles by internally incorporating collaborative spaces and by contributing to an integration puzzle in which all interactions and updates will be visible and usable both way to produce value for the individual and even more for the entire company.
Much more than on vertical solutions or their socialization, the future of social business will be fought on the ability to build a comprehensive participation ecosystem enabled by efficient common services and components that are finally able to talk in a distributed and flexible way.
This post is also available in: Italian