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8/16/2011
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Prove The Benefits Of Social Software: Expert Advice

Even if you can't pinpoint ROI, most executives will recognize if social software improves operations and corporate performance, says John Hagel of Deloitte's Center for the Edge.

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Social software excels at handling processes that would otherwise fall through the cracks of traditional enterprise systems, but proponents need to do a better job of explaining its value, according to John Hagel, cofounder of Deloitte's Center for the Edge.

"There is a lot of discussion about it and talk about it, but if you actually look how much has been implemented where someone has quantified how it translates into a performance improvement for the organization, we're talking about a very small group," Hagel said. "Most of the adoption tends to be very ad hoc."

Often, a specific project or project team will prove the value of the software to its own satisfaction, but without documenting that success in a way that would drive broader adoption, he said.

Hagel said he has a strong conviction, based on his research, that social software can have real benefits for corporate performance. Some of that research has been published in a report on Social Software for Business Performance the center published earlier this year. "So I'm not saying the jury is out," he added.

However, the kind of proof that will convince senior executives that investing in social software is worth their time, money, and attention is still hard to come by, Hagel said. The proof from published case studies tends to be "suggestive, but not definitive," he said. The best way to come up with more convincing proof is to create it yourself, by picking a first project that has a high probability of paying off, he said.

In a speech at Enterprise 2.0 in Boston in June, Hagel talked about finding metrics that matter to corporate decision makers and framing social software initiatives in those terms.

In an interview this week, he suggested looking for ways to connect the impact of improved communication to operational metrics such as improved cycle times or reduced customer churn. Even in the absence of hard dollar return on investment--which can be hard to prove--most leaders will recognize how improved operations translate into better corporate performance, he said.

Another tactic is to get corporate leaders to examine where employees spend the bulk of their time, Hagel said. "In most organizations, somewhere between 60% to 70% of employee time, on average, is consumed by what we would call exception handling--tasks that are outside the standardized processes defined by your enterprise systems." In other words, these are all the cases where employees must improvise, and that improvisation tends to be time consuming. That's exactly where social software can help by allowing people to connect and figure out how to handle situations that don't fit neatly into the boundaries of other enterprise systems, he said.

In addition to making exception handling more efficient, the addition of social software gives organizations an opportunity to detect patterns of inefficiency, Hagel said. While some of the exceptions are truly unique, one-time occurrences, others may be recurring on a regular basis.

"In most organizations, it's kind of an embarrassment that these exceptions are going on," Hagel said, and they tend to be dealt with off-the-record as a result. Just by moving the management of these issues into an electronic system that can be tracked, the organization can identify broken processes and gain "an interesting early view into opportunities for innovation," he said.

Beginning a social software project may require a certain leap of faith that the benefits will materialize, Hagel conceded, but the CIO or other leader who pursues it "has an opportunity to be a catalyst for a significant new wave of performance in the enterprise." He recommends a "surgical" implementation of the technology, targeted at a business function where it is likely to show the highest impact.

Although the ideal enterprise social network would be deployed company-wide, you can trip yourself up by trying to go too far, too fast. When employees are invited into a social environment with a great deal of hype--but before there is much activity in it--they tend to go away disappointed. Hagel calls this the "empty bar problem," as if you wandered into a supposedly hot nightclub and found nobody there.

"If the first experience isn't a valuable one, it's difficult to get people to come back, because they think it's just a waste of time," Hagel said. Better to launch social software first with teams that will jump right into using it, creating a lot of activity because they have a specific need for this sort of collaboration. Once they have proven the value, you can move on to broader adoption. At the same time, Hagel believes it is better for social software adoption to begin as an enterprise initiative rather than an ad hoc one based on a freemium service like Yammer brought in by a department or team leader. Rogue patterns of adoption can have a high risk of failure, and those failures can poison the well for attempts to use social software in the future, he said.

On the other hand, there are many cases where a team acting independently will adopt social software successfully--but often that's where it will stop, Hagel said. "There are lots of examples, especially at the team level, where you have people taking the initiative and bringing in software, especially for low cost or free, and they are getting value out of it. But because they are not documenting the value in any systematic way, or spreading the word about it, these tend to remain relatively fragmented, isolated instances."

Attend Enterprise 2.0 Santa Clara, Nov. 14-17, 2011, and learn how to drive business value with collaboration, with an emphasis on how real customers are using social software to enable more productive workforces and to be more responsive and engaged with customers and business partners. Register today and save 30% off conference passes, or get a free expo pass with priority code CPHCES02. Find out more and register.

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