The IT Landscape - Customer Relationship Management

Now that you’ve figured out what kind of social network(s) you want to commit to and you’ve learned something about how to manage and not manage that community,what about thetechnology you need to actually implement it? Not so easy. The number of white label social networking platforms out there is mind numbing. Jeremiah Owyang,a partner at the Altimeter Group and wildly popular social tools guru,estimates as of January 2009,there were more than 100 white label platforms. (“White label” means that you can rebrand the platform under your own name if you purchase it.) I’m not going to cover all of them here. That’s a huge undertaking. My concerns for this book are how they impact CRM systems and the social customer.

In order to understand the business impact of social networking technology,I’ve enlisted Harvey Koeppel,the executive director of the CIO Leadership Council. Harvey has been the CIO for the Citigroup Consumer Banking Group and a consultant for an incredible number of companies,and,of course,their CIOs. He truly gets it—and I mean that in a social customer-focused kind of way. His insights will help you do the same.

Conversation with Harvey Koeppel:
Enterprise Adoption of Social Networking:A CIO’s Perspective

As recently as a couple of years ago,if you were to say words like “Facebook,”
“MySpace,” or “YouTube” to a typical CIO (assuming that you could find a typical CIO),their general reaction would be to first shudder as if an icy wind had just blown through the room,then fold their arms across their chest—in part to protect themselves from the cold and in part to protect themselves from the emotional pain associated with even thinking about the topic. Then,once they gathered their composure,typical responses might have been:

“Yeah,cool stuff. My teenage kids are on Facebook all the time . . .Okay for personal communications but that type of technology has no relevant use in a big company like mine . . .”

And then there would be the inevitable conversation annihilator:

“No competent information security officer would ever allow that kind of transparent and immature technology to be implemented here. It’s a compliance nightmare—we have standards . . .”

During the past couple of years,I have spoken about these issues with hundreds of CIOs and CxOs from just about every industry,large,medium,and Social Networks,
User Comm unities:Who Loves Ya,Baby ? 223 small companies,private and public sector on just about every continent on the globe. I am pleased to report that,just two years later,both attitudes and behaviors have changed. Please don’t
misunderstand—I am not envisioning the next great Cultural Revolution,but rather,lots of small points of light which are beginning to connect businesses to customers and businesses to businesses in some new and very exciting ways. An undeniable shift in enterprise thinking (and doing) has begun and will likely continue to progress through the four stages,from:
progress through the four stages

While,for years to come,anthropologists,sociologists,and psychologists will likely be talking about and writing about the first three shifts noted above,from an enterprise perspective it is the Fourth Dynamic (likely a whole other book) that presents significant challenges and even bigger opportunities for CIOs. Let’s look at both.

A Few of the Challenges
Lines are getting blurred between personal and business data. Corporate information is prevalent across personal networking sites,and personal information is increasingly being populated across business networking sites such as LinkedIn,
Twitter,Ning,Plaxo,and so on. Wikipedia lists a couple hundred of these sites with the caveat,“Please note the list is not exhaustive,and is limited to some
notable,well-known sites.”

The volume of business,customer,and personal information has expanded exponentially and is likely to continue to do so for the foreseeable future. Social
networking sites often contain business information in unstructured text or images (still or video),which are hard to find and even harder to analyze when found.

Messaging,blogging,and discussion threads are significantly impacting (reducing) e-mail traffic among community members. A new global language has emerged (LOL) in this context which will likely surpass Esperanto as the new universal tongue for business and for personal use. The infrastructure that supports this form of intra-community communication (and inter-community in the more advanced form) is not managed by the enterprise but rather by community managers. Traditional
phishing,pharming,spam,and corporate information leakage filters don’t work in that environment.

Social networking sites are at the same time both ubiquitous (everywhere) and ephemeral (here today,gone tomorrow). Enterprise adoption of these sites is therefore risky business because there will likely not be a very good continuity of business plan to rely upon. Whether a particular site is online or defunct,there is no accountability around the information that was captured,stored,and/or propagated and/or replicated across other websites. Once information has been put onto the grid,it is almost impossible to take back or delete. Companies cannot yet control what their employees are saying and doing within social networks. In enterprise-speak,not in control is generally the same as not in compliance.

Such sites also belie the concept of “authoritative source” of information since,in cyberspace,everyone is an authority and the onus is on the user to validate what they read,believe in it,or not. Again,a significant compliance nightmare.

Social networking has enabled customers to communicate among themselves(C to C) in the context of a commercial (B to C) transaction,which tends to pass control of company and product identity from the marketing department to the town hall. Access to customer-generated publicly available ratings and opinions of companies,products,and services has become part of the typical online buying experience. The power of the Brand is slowly and surely giving way to the power of the Customer Rating.

The Opportunities
As daunting as some of these challenges appear to be,the commercial opportunities presented by the practical use of social networks are enormous,likely beyond our wildest imagination. Here are a few examples.

Reach (the number of people you can touch) and frequency (the number of exposures to an ad) have long been held as the cornerstones of any marketing/
advertising campaign. Both are constrained by the number and expense of
channels utilized,such as TV,radio,magazine,direct mail,and so on. There is a science associated with which channels and with what frequency ads should be run (at a cost) based upon a particular product and its intended customer base. Leveraging social networking tools and techniques has the potential to both fine tune specific messages targeted to specific customers and at the same time broadcast both specific and generic messages in a viral manner across the Web in a matter of minutes or hours compared with traditional campaigns,which could take weeks or months to run their course.

Customer information is available and will continue to proliferate in quantities and of a quality not even conceived of within most of today’s most modern CRM applications. And enterprises are not limited to capturing information about customers and prospects solely based upon their own experience or research. Simple tools can very quickly provide marketing and sales staff with knowledge of things like what books you read,what music you listen to,what shoes you buy,pictures of you and your fraternity pals at the annual beer blast (maybe that one is for HR),and on and on. Clearly there needs to be a proper balance struck between information availability and its use versus the customer’s right to privacy although,in general,it is now widely accepted that if you put something onto the grid,unless it is explicitly protected by the host—for example,credit card or health information—it is there as public domain. Customer usage of RSS feeds provides enterprises with mountains of information about an individual’s areas of specific interests and propensities.

Perhaps the most profound opportunity presented by the prudent use of social networking within an enterprise context is the enablement of new and significantly more effective business models,those which can be driven by massively parallel collaboration. Enterprises are already discovering that they can effectively leverage broad communities of otherwise unrelated individuals, often who don’t even work for the company,to help solve technical problems,supply chain problems and even help to define and popularize new products and services. Both costs and time to market are reduced to fractions of what would be expended using more traditional methodologies.

Enterprise examples of this emerging trend can be found in companies such as IBM,which runs Innovation Jams where,on a prescheduled and structured basis,
usually during a one- or two-day period,literally hundreds of thousands of
employees and customers come to a virtual community to discuss innovative new product ideas,exchange thoughts about new uses for existing products and,in general,both provide and obtain massive amounts of market information with stakeholders.

Innocentive is an enterprise-strength social networking platform that allows
Solution Seekers to post rewards ranging from $5,000 to $1,000,000 for solutions posed by Problem Solvers,who may or may not be employees of the firm posting the challenge. SAP,for example,has recently created Polestar OnDemand—a cloud version of their current Business Objects Polestar technology. Within the framework of the Innocentive community,SAP will pay the winning developer(s) $20,000 for creating novel ways of leveraging the Polestar OnDemand product.

From the examples above,it is clear that social networks and the communities they spawn are transforming the way in which the traditional enterprise works by
enabling and nurturing collaborative innovation throughout the ecosystems within which forward-thinking enterprises live,work,and play.


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