Creating Social Value in the Midmarket

The Enterprise 2.0 debate is over. It's time to stop thinking about using social media in the marketplace and instead realize it has value and needs to be a part of your midmarket company.

That's the message behind a whitepaper distributed last week by Socialtext, a Silicon Valley company that makes Web 2.0-based business software. The company is aiming to shift focus away from endless discussion about defining social media toward clear examples of how Enterprise 2.0 software can help companies grow.

And after reading it, even though it's a whitepaper from a vendor with a vested interest, I can say this document may offer some midmarket companies good insight into why Enterprise 2.0 technology is essential to building the business.

"Principally, we believe it's time for the Enterprise 2.0 facet of the software industry to demonstrate the business value that these social technologies provide our customers and lay out a framework for how companies can get started," says Socialtext marketing manager Chris Lynch. The paper was introduced at the Enterprise 2.0 Conference in San Francisco.

The 20-page document splits up the case studies based on what function social networking software performs, such as within a department or as a means of collaboration among partners. Covering software tactics including wikis, blogs, microblogs, and RSS feeds, each argument is structured around formal or informal processes.

As writer and consultant Rob Salkowitz notes in his latest ThinkerNet blog: When social computing was shiny, new, scary, and mysterious, it was possible to make all kinds of claims about its risks and benefits. Now that many organizations, and most consumers, have gotten their hands dirty with the actual products, the winning business cases for adoption are more reality-based and centered on day-to-day workplace scenarios, rather than sweeping claims of transformation.

"E2.0 evangelists have been saying this from the beginning, but there are signs that people are finally starting to believe it," Salkowitz says, noting that companies are beginning to see changes in the market. "The well known E2.0 success stories -- Ford, Proctor and Gamble, Best Buy -- are also among the few economic success stories in the wake of the recession, and their success, say the E2.0 gurus, comes down to culture, not just a smart technology investment strategy."

So who are the unsung heroes of Enterprise 2.0 -- companies that are actually following a social media strategy successfully? One example mentioned in Socialtext's paper is TransUnion, one of the big three credit report companies, which told Socialtext it runs a lot of custom software code. That code began causing IT performance issues. One solution was to purchase new equipment, but instead, as the paper notes, "a small group of people using social tools started a conversation about ways to solve the issue without buying new hardware. People began surfacing ideas in a central location, automated activity streams created an awareness of the conversation."

As a result, the company saved an estimated $2.5 million because employees figured out ways to resolve the automation performance issues without new equipment.

"It was never very clear to us, looking in, who the authoritative sources were, who was good at solving problems," TransUnion CTO John Parkinson tells Internet Evolution. "Now we can see a lot of that because we're starting to see patterns emerge, to see who's following whom, who's the good source of questions, who offers good answers. All those things that you sort of know by the grapevine, we now have data for."

Another example of a company fully adopting social networking is OSIsoft, which helps energy and utility firms monitor their infrastructure systems. The company told Socialtext that it has more than 200 people in its support department but they "lacked formal processes to help engineers with newly breaking issues." Good information was often buried in someone's email.

To fix the problem, OSIsoft started using a social software workspace for its technical support department, where anyone could submit information. As a result, OSIsoft was able to solve customer problems much more quickly -- often in minutes vs. hours.

The takeaway here is that many midmarket companies are no longer seeing social software as a Gen Y phenomenon. They are seeing it as a cost-effective way to better communicate with their partners and with each other. And any chance to save money and communicate better about your business seems to be a winning strategy.

— Michael Singer, Senior Editor, Internet Evolution.