Accelerating

Business Performance
Spring 2010
Oliver Marks & Sameer Patel
SOVOS Group

sovos
G R O U P
Summary
This paper examines the value of collaborative and ‘social’ concepts and their associated technologies towards achieving core performance goals
and facilitating underlying business process.

Understanding how to orchestrate greater value and flexibility from large enterprise backbone applications in conjunction with newer, more
agile‘Enterprise 2.0’ processes and technologies to effectively support critical business functions is a major challenge for business leadership.

We examine the challenges of inflexible legacy ‘1.0’ business designs and underlying systems against the rise of the ‘Web 2.0’ experienced
employee influenced by consumer web, broadband and mobile technology use patterns. We then introduce the concept of enabling key business
processes with the strategic use of collaborative and ‘social’ concepts along with your existing technology and program investments, to
accelerate business performance.

Finally we discuss specific ways to get value from blending new agile approaches with your existing programs technologies in the context of key
business functions.

Enterprise 2.0 Origins

Andrew McAfee's original 2006 discussion of Enterprise 2.0 as 'constantly changing structure built by distributed, autonomous peers—a
collaborative platform that reflects the way work really gets done' has now grown well beyond the enabling browser based technology of wikis,
blogs and group-messaging software of that early era.

The movement was a reaction to the restrictive document, postal and telephone workflow
paradigms that are now over a century old and were essentially emulated digitally to model
‘1.0’ communications and application technology platforms in the personal computing era.

The conceptual idealism of enhanced information flow around a flexible, flatly organized
environment, where user-driven technologies are adopted from ‘the bottom of a distributed
global organization up’ to mirror real world work practices has matured into a pragmatic,
business politics sensitive and seasoned approach by strategists and practitioners.

Today’s crowded enterprise social web technology (often called Enterprise 2.0) landscape
ranges from complete platforms to ‘social software’ suites to hosted communities to point
solution blogs, wikis, and on to the various free public internet services.

Openness, transparency, agility, collaboration and ‘social’ computing are currently highly fashionable
values, but applying them to achieve specific business value with both existing and new web 2.0
The ability to successfully drive
technologies while attempting to manage employee change for effective use is highly challenging.
business value by stimulating
Vital issues around context, implications of participant and social network growth effects, successful
collaboration, innovation and
understanding and application against process, scaling and enduring engagement use models have
awareness provides powerful never been more critically important strategically.
competitive advantage goals Today, the Enterprise 2.0 movement is reaching a new level of maturity and critical mass to address
and rewards at all scales the inefficiencies of currently deployed technologies and business design (“the 1.0 Dilemma”, below),
to accelerate performance. The business world are now largely aware of the potential value of
deploying 2.0 concepts and technologies, but the major issues of this era are the specific problems
successfully solved by them, and in identifying the metrics and the tools to measure the efficiency of
solutions in the context of business performance.
The 1.0 Dilemma
The ‘1.0’ enterprise software market that powers larger enterprises today has very deep origins and roots in historical core business processes,
whose foundations significantly predate computer technologies.

In the context of this report, the state of the Enterprise today can be characterized by the following realities:
Applications:
Systems of record are set in place but access to data and information remain largely fragmented. Businesses that have built their
While Enterprise Resource Planning (ERP) applications surface critical data, and intranets and
collaborative and transactional
collaboration applications enable sharing, the context and engagement that tie both data and
collaboration together to support discrete business activities is missing. infrastructure on these
technologies have reached
Infrastructure:
Broadband, Mobile and Web 2.0 concepts have often put consumers in the center of their data a crisis point in information
stream. Gmail from Google, for example, gives us unified access to our email, instant messaging, ‘findability’ and process context.
video and social networking, putting users in the center of information consumption and engagement
patterns. Facebook strives to offer a similar paradigm. In contrast, the enterprise puts data access
and systems in the center. Whilst the enterprise has also seen advancements in broadband, unified
computing and transactional IT, these applications don’t often share context. As a result, employees, partners and suppliers have to access multiple
systems that don’t share context, to communicate and collaborate and to effectively close business loops.

Operations:
We’ve wrung most of the value out of offshore outsourcing production and support whilst attempting to retain innovation on shore. The cost arbitrage of
offshore outsourcing is rapidly decreasing, and in the global marketplace, innovation talent transcends geography. Tomorrow’s organizations will need
to leverage the best minds, regardless of location, and place support services wherever it’s most optimized to serve the customer or other end users.
Our current organizational designs and supporting technologies are not generally structured to leverage the best resources for the job to respond to this
coming reality.

Business Process:
Serving prospects, customers, partners and suppliers requires creative problem solving to address unique, non-repeatable requests. In contrast, our 1.0
ERP and Customer Relationship Management (CRM) processes, whilst enforcing process and compliance, do not enable flexible collaboration to handle
such exceptions. A more responsive model is required that blends the optimal amount of engagement with process and compliance, to improve business
outcomes at an acceptable cost.

Revenue:
Businesses push marketing information to customers and hope for engagement. Today’s prospect and customer is increasingly using participatory media
(such as communities and social networks) to rely on each other’s judgment and to engage with businesses. The internal wiring at most organizations
has not kept up with the pace of consumer engagement needs. Additionally, today’s transactional designs bear significant customer acquisition costs. A
new design is required to put forth the best minds and information in front of prospects and customers, to build genuine
relationships that can outlast individual transactions.

Collaboration:
The intranets, collaboration applications and portals used to communicate between groups inside the organization and/or with partners and suppliers
serve as effective transactional and data exchange platforms. However, the cost of manual, ad hoc support for requests that don’t map to intranet
functionality in siloed organizations adds friction to all types of processes. Together this significantly increases channel and supplier operational costs,
and often at sub optimal quality.
Two years ago Pete Fields of the now defunct Wachovia Bank keynoted the Boston Enterprise 2.0 conference and discussed experiencing fresh
out of college employees starting work full of enthusiasm and engagement at their new known and trusted brand employer. Within a year, the
engagement of many of these expensively trained new hires 'fell off a cliff', with many leaving out of frustration at working methods, hierarchy
and limiting technologies.

The strains on ‘legacy system’ collaboration and engagement inadequacies are increasing rapidly, and an significant business challenge—crisis
in some cases—around the governance and security of alternative, informal web application usage to achieve critical business goals has ensued.
The Demanding Web 2.0 Empowered Customer as employee
The broader ‘Web 2.0’ movement was enabled by broadband Internet forming the ‘platform’ your applications run on, with your web browser as
the user interface (instead of applications running on the ‘platform’ of your individual personal computer hard drive).

Emerging in 2003, this shift to ‘cloud computing’ (where shared resources, software and information are provided to computers and other
devices on-demand across the internet, like a public utility) has led to an explosion of innovation whose impact continues to reshape all areas of
society.

The evolution of these ‘cloud’ services has created the free-to-use consumer branded
To individuals flattered and empowered world of Facebook, MySpace, blogs, Twitter and other services that facilitate open
by marketers online who make communication, secure information sharing and personal socializing and connections
between people on the World Wide Web and mobile networks.
information and purchases mere clicks
away, the old 1.0 security bunker
The marketing, public relations and advertising function continues to be pushed through
unprecedented change as a result of the seismic shift in delivery channels away from
mentality of corporate computing ‘traditional media’ broadcast models and towards attempts at ever greater engagement
seems stale and limited, and by with you as a potential consumer.
comparison it largely still is. An unparalleled degree of inexpensive accessibility between marketers and their prospects
has been enabled by cloud and mobile services. The consumer ‘Social Media’ world strives
to create a great deal of noise with attention grabbing antics—but it is not Enterprise 2.0.

The result of these new marketing models is the rise of the vocal, connected and expressive individual. Instead of passively looking to sellers for
influence and advice, people now have a much higher confidence level in their ability to interact and share information, and for their voice to be
heard.

Meanwhile, the on-premise, firewall protected enterprise software these same empowered individuals use at work hasn’t changed much over the
last decade, compared with the huge cultural changes engendered by a consumer global internet searchable for anything you can imagine.
Internal business communication infrastructure largely characterized as Intranets and Extranets have primarily been broadcast platforms for
employee and executive communications, and to deliver information to partners and suppliers.

Internal enterprise collaboration infrastructures—if they even coherently exist—are in many cases not equipped today to meet the needs and
realities of near ‘real time’ (responding to external market events immediately as they occur) interaction cycles, which are becoming increasingly
common and expected in the consumer world.

The modern 2.0 empowered customer/employee increasingly expects immediate reaction to interactions with a company, just as they do in their
personal life.

Enterprise 2.0—The First Wave

Against this backdrop of rapidly evolving societal change empowered by always-on high speed internet and mobile access to unprecedented and
ever increasing amounts of information, the promise for business use appears hugely attractive.

Attempts to drive business performance by creating broad Facebook style personnel directories and networks to replace intranets with consumer
style cross pollination behavior are laudable aims.

The reality has frequently been a political realization of how siloed the different fiefdoms of many companies are, with little interaction between
specialized groups competing for prestige, work and budget. This reality check is being tackled head on by some large companies—notably
Cisco—with large scale, mission critical, companywide collaboration initiatives, while elsewhere well defined departmental and division level
Enterprise 2.0 initiatives flourish with specific goals and boundaries.
Enterprise 2.0 is essentially informed by two polar opposites in the business world.

At one extreme are companies desiring a spirit of openness and transparency. These are typically consumer product companies, open partner
networks and marketing driven business cultures in less regulated industries. They are grappling with effective influence and interaction with
their web 2.0 empowered customers, providing views and interactions deep into their companies to foster ongoing conversations with prospects
and customers, while listening carefully to their needs.

The other extreme are opaque, tightly calibrated and regulated, highly competitive industries where protection of intellectual property and
information is critical, such as pharmaceuticals, engineering and legal. These worlds typically require ‘fine grained’ secretive control of all
participant visibility to information behind a significant firewall security shield.

Beyond these polarities, inside all business cultures there are frequently many
separate initiatives requiring varying degrees of security depending on the degree Well crafted, focused Enterprise 2.0
of information sensitivity and the regulatory restrictions on all participating
frameworks formulated to clear objectives
constituent departments.
enable organizations to identify and assemble
The tremendous waves of innovation from Enterprise 2.0 technology vendors,
appropriately connected teams across the
serving a market vastly more exacting and demanding than the consumer space,
have provided platforms and tools to enable these culture change initiatives. globe to interlock and wrap around discrete
Following behind are the more mature enterprise technology system of record business challenges and opportunities.
companies, now increasingly moving to the cloud with certain aspects of their
offerings and embracing the innovation of the cutting edge where value is seen.

First Wave Challenges

The received wisdom is that Enterprise 2.0 initiatives are of high value for connecting knowledge workers with each other and heightening
awareness of relevant information flows. The crushing weight of email overload is a common target: attempts to wean people off sending
one-to-one, or one-to-few emails, often with offline documents attached.

There is plenty of evidence that expertise location and group efforts to inform using wikis and other real time communication tools have proved
to be highly useful in combating this problem.

While it is now simple to instantly initiate an online environment with a departmental budget credit card, immediately providing tactical tools
to solve specific operational problems, minimal understanding of the impact of single department collaboration initiatives on the broader
organization or against broader known performance goals can be problematic.

Narrowly focused tactical planning budget requests for specific operational value are typically granted, but larger workforce wide collaboration
initiatives—a more complex problem to solve—often have no stakeholder focus despite high strategic value.

Broad workplace performance is typically achieved by focusing on how discrete business processes fit into a carefully envisaged and conceived
holistic whole, but creating fragmented department level ‘collaboration silos’ to solve specific operational objectives can be a serious impediment
to achieving a broader collaboration platform.

There is a gradually increasing understanding of the importance of greater business process context, cognizance of installed systems of record,
security around sensitive Electronically Stored Information (ESI) and vision around planning and dealing with scaling.

Setting your overarching business execution strategy, powered by collaborative and Enterprise 2.0 concepts, is of paramount importance
going forward if the goal is to achieve interconnectivity and efficiency at scale, business metric alignment, and avoiding and minimizing the
performance loss created by friction between fragmented units.
Putting Collaboration to Work to Drive Performance
The next wave of solutions emanating from Enterprise 2.0 collaborative design will drive large-scale workplace performance as well as discrete
process performance to improve relationships between employees, customers and partners. This will result in moving from closed linear
processes to a more consciously collaborative design, but one that’s cognizant of the necessary controls and governance between teams and at
the edge.

Some discrete examples of Enterprise 2.0 Outcomes…

Enhancing Process with Engagement

Over two decades ago, enterprises began to adopt process-centric Manufacturing /Enterprise Resource Planning (ERP) and Content Management
systems (followed by Customer Relationship Management and other offshoots) in the hope that they could control and streamline business
processes from initiation to completion, in the able hands of a few identified experts.

These technology enabled people processes were modeled after best practices for a given business activity (order to cash, procure to pay, lead
generation, collateral creation, customer service tickets) and software was customized to enable a given process.

While these closed processes were able to enforce sophisticated governance and legal requirements, organizations over time gradually stopped
distinguishing between a given business activity and how their customized technology systems mandated processes be completed.

Many organizational processes are repeatable and ERP systems are effective at supporting these. However, frequently occurring critical
exceptions require manual intervention, brainstorming and collaboration. The costs and impact on customer satisfaction of executing these
unstructured outcomes often far outweighs the convenience of tightly closed processes.

The daily reality is that customers, employees and partners often need help with critical content, requiring access to people, data and knowledge
inaccessible within closely defined processes. An external example of this could be customers asking questions that are not within the expertise
of call center operators, or readily available in an accessible knowledge base.

By folding in agile engagement capabilities powered by enterprise 2.0 technology, strategy and execution planning around these preexisting
limiting structures it is possible to provide a balance between flexible new exceptions handling with the traditional process concepts and their
associated technologies.

Discrete business activities (customer support, account payable, etc) require a different blend of structured and agile designs. In some cases this
means process plays a dominant role. In other cases open, unstructured constructs are at the center, with process at the edges conforming to
policy and governance requirements. As Enterprise 2.0 thinking evolves, this will become the predominant design for executing business strategy.
Serving and building relationships with ‘Social’ 2.0 Customers
How your organization engages with and responds to customers experienced with online social experience expectations and demands and how
to best manage those continuing relationships is an important facet of Enterprise 2.0.

Many organizations have begun to undertake focused initiatives to engage with customers on social networks, whether 3rd party or branded
communities that hinge off corporate websites. A first phase of execution has designated community and social media managers that make sure
the customer is well attended to.

The big disconnect can come when these external customer engagement efforts are fine tuned for immediacy, but internal follow through is ill
equipped inside the organization to support a high volume of customer engagement opportunities and requests at an acceptable pace.

More often, customers are looking for answers to questions that are beyond what a community manager or a marketing specialist can answer.
The best input resides deep inside the enterprise or even in the partner ecosystem. If the internal workings of the organization are not designed
to quickly wrap around customer service requests and product /feature questions, the value and commitment to strong customer community
efforts are diminished.

To achieve a desirable state where the appropriate minds within the organization can rally around customer needs, a carefully conceived internal
enterprise 2.0 flow design is required to notify the right people, galvanize teams and document for repeatability, all wrapped up within the
confines of a central governance model.

Designing and applying this internal social and collaborative backbone is critical to connect the organization with prospects and leads to drive
performance.

Building an Innovation Culture to Stay Competitive and Responsive

Customers are increasingly sharing opinions about improvements and potential new products on the web in real time. Prospects are being more
communicative than ever about what it would take for them to get off the fence and convert to paying customers.

Whilst attempts to foster innovation are not a new occurrence, ideation is now happening on the open web for your competitors to see, as well as
within branded company communities. This brings fostering a strong innovation culture and a rapid path to decision making, into sharp focus for
large enterprises.

Enterprise 2.0 concepts enable organizations to facilitate democratized employee and customer ideation initiatives that go from idea conception
to selection based on business objective alignment, prediction markets to ascertain degree of potential success and value, and finally, well
planned transfer to operational groups for validation, roll out and measurement.

Where innovation programs were traditionally limited to a defined set of “known experts”, Enterprise 2.0 concepts can enable distributed idea
generation and initial brainstorming from the best minds across employees, partners and customers.

This new model of idea generation brings new opportunities for revenue enhancement, cost reduction and risk mitigation from a larger pool of
stakeholders. That can add up to significant positive impact to the bottom line.

Accelerating HR and Talent Performance Measurement

Performance measurement at most organizations today often take place in retrospect. Organizations identify metrics upfront, put milestones in
place for periodic checks, and concentrate the evaluation of success or failure in the hands of a few managers to make impressions about an
employee’s performance.

Carefully planned collaborative constructs in the enterprise enabled by Enterprise 2.0 to improve process outcomes, implicitly offer significantly
more effective measurement and more immediate refinement opportunities to find, nurture and measure talent.

Being able to gather information “in the flow” as people work gives Human Resources managers the opportunity to fold in important behavioral
data such as the degree of sharing, helping, engaging, contribution and involvement. This ultimately provides a broader set of data points about
an employee’s allegiance to the firm to supplement closed management and peer performance measurement programs.

These important data points complement traditional performance metrics, giving a sense of how critical each employee might be to a business
unit, product line, geographic territory and ultimately to the company as a whole in the context of strategic goals of the organization.
Rethinking Channel Relationships
A well planned channel engagement strategy that’s enabled by enterprise 2.0 concepts can be instrumental for designing strong relationships
with partners based on ongoing dialogue, open and near real-time collaboration to find and serve prospects and customers effectively. This
proposed design brings the best minds inside all participating organizations together to address and resolve problems, and allows in-the-flow
measurability of channel marketing effectiveness and return on investment.

Today’s channel partnerships are characterized by manufacturers pushing information (via static extranets, joint promotions and transactional
systems) in the hope that channel partners understand the value proposition and can articulate it accurately to the end customer. In reality,
partners very often are looking for engagement: context specific help when it comes to helping end customers make purchase decisions,
lowering customer administration costs and facilitating renewals. Attending to these are often ad hoc exceptions not supported by existing
intranets and systems. The result is a significant impact on customer acquisition, service levels and overall program costs.

Promoting a channel engagement design for manufacturers and product developers to listen and gather customer feedback and wrap the right
minds around end customer sales inquiries and support requests, is a first step to accelerating channel performance, understanding what
marketing campaigns are working and where to refine or allocate new investment.

The good news is that Enterprise 2.0 technology which makes the necessary engagement possible is far cheaper than traditional IT systems, and
generally easier to overlay and integrate with existing systems. In practice, well thought out strategies, tactics and execution plans are critical to
align the value of these technologies with critical performance objectives and use that as a baseline to build out metrics and an execution plan.

Accelerating Supply Chain Performance beyond Procurement

Well planned strategic sourcing and procurement programs at today’s largest organizations have often resulted in fine tuned, operationally
efficient organizations. What’s considered core (R&D, Marketing and the like) are kept in house and the rest (often manufacturing and support)
are outsourced to more efficient partners that can produce within mandated service and quality level agreements and lower cost.

Whilst these procurement designs have been effective at managing cost in many cases, a significant opportunity exists to improve supplier
partner relationships as well as cross organizational collaboration. The strategic use of Enterprise 2.0 based secure relationship and
communication networks in concert with traditional Supply Chain Management (SCM) software streamlines on boarding, resolves disputes and
reduces compliance risk and ultimately, performance acceleration.

Beyond supplier management tasks, these networks improve collaboration between partners to resolve component dependencies. With the
necessary governance and security in place, they also promise to surgically open lines of communication beyond procurement, into other parts
of the enterprise such as marketing and customer service. No one knows the true power, limitations and opportunities for each component of a
product better than the very teams that build them. As suppliers look to differentiate themselves from competitors, especially in commoditized
industries, these networks enable them to evolve into strategic partners in a number of ways: To learn, first hand, any pain felt by the end
customer when using the end product. Or help marketing really understand the deep competencies of each component of the end product. Or
provide new insight to R&D on early technology innovation at the component level.

The next wave of supplier relationship management will move from transactional designs to a network design that fosters true partnering around
the end customers needs, delivering deep supplier product knowledge to the front lines where prospects lurk, and ultimately, a significantly
stronger value proposition around operational excellence.

Setting Your Enterprise 2.0 Strategy

The authors of this paper are running the ‘Set Your Enterprise 2.0 Strategy’ track at the Enterprise 2.0 Conference, which is aiming to demystify,
focusing on pragmatic strategy and providing associated real world experience and viable tactics for budgeting, value propositions and
measurement of your desired results. Getting a sense of context and scale for your specific needs can be challenging in a world dominated by
analyst charts, evangelists, tech fashions and of course vendor messaging.

To effectively go from concept to business success, organizations need a structured plan that covers business justification and strategic
alignment with core performance objectives, metrics definition, application evaluation and solution selection, community design and engagement
and finally change management, training, management directives and adoption encouragement.
We’ll be covering everyday political realities, such as tackling conflicts of interest between line of business needs and other divisions,
departments and partner organizations, and getting those that run critical functions such as Sales, Marketing, HR, Innovation, Learning, and
Product Management to understand the strategic value of Enterprise 2.0.

We aim to help you unlock the value of these rapidly maturing and increasingly important social constructs to meet your specific business needs
and address how they can significantly augment the value you get from your current technology investments with greater employee, customer
and partner performance.

About the Sovos Group

This report was authored by Sameer Patel and Oliver Marks of the Sovos Group, a strategy and execution consulting firm that helps leading
organizations accelerate business performance via the strategic use of social and collaborative concepts and technology. Our Workplace
Performance Practice focuses on organization wide collaboration strategy and our Process Performance Practice helps drive performance in the
areas of sales and marketing, customer networks, channel partners and suppliers.

Oliver Marks and Sameer Patel, partners at the Sovos Group, are both advisors to the Enterprise 2.0 Conference and co-chair the strategy and
planning tracks that focus on showing how tangible business value can be derived from enterprise social and collaborative concepts.

For a simple assessment of how your organization can leverage collaborative and social concepts to improve workplace or process performance,
contact us via email at [email protected]

More at http://www.sovosgroup.com or on twitter at http://www.twitter.com/sovosgroup.

About The Enterprise 2.0 Conference

The Enterprise 2.0 Conference explores the integration of Web 2.0 technologies in the enterprise, from both strategic and tactical perspectives.
This annual conference and sponsor pavilion focuses on the tools and techniques that best leverage the technical, productive and social aspects
of IT and workgroup environments to build a cohesive collaboration strategy and empower a connected workforce. For more information visit:
www.e2conf.com.

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