Deloitte: The missing link in social software: Measurable business performance improvements

Super new research from Deloitte:

Senior executives are skeptical of the value of social software. Their reluctance is understandable but self-defeating. Deloitte Center for the Edge’s paper, “Social Software for Business Performance” discusses how companies can leverage social software to significantly enhance business performance in the short-term and transform it in the long-term. Early adopters of social software have the potential to reap financial rewards and develop skills and experience that can help build a stronger competitive position over time.

Social software has unique capabilities to address current operating challenges and improve operating metrics. To capture this value, however, companies will need to more systematically assess the operating metrics that have the greatest potential to move the needle and then strategically deploy social software to ensure near-term performance impact with modest investment.

This “Social Software for Business Performance” paper discusses:

  • Profound changes are underway. The current technologies support standard business processes but fail to support the dynamic informal communications needed for resolving exceptions. Employees need tools that enable them to navigate organizational boundaries, connect to the right people and accelerate exception resolution.
  • Skeptics will finish last. Companies that want to successfully implement these tools should develop a strategy for deriving tangible operating performance improvements and achieving competitive advantage through the intelligent and targeted application of social software tools.
  • Focusing on adoption is a dead-end strategy. Adoption metrics have not historically addressed what matters most to employees, managers or executives. As long as adoption is the primary measure of success, resistance, at all levels, will likely block successful social software deployment.
  • Companies must be strategic. Social software, applied against the problem of exception handling, can directly and measurably impact operating metrics and improve business performance.
  • Companies must be decisive. Too often, companies implement social software without clear business objectives or a strategy for moving the needle on organizational performance. These efforts typically fail. Our focused approach helps executives select the exception-handling opportunities that can have the greatest impact on operating and financial metrics.
  • Companies must act now. Companies that move quickly can reap significant financial rewards and develop skills and experience that has the potential to help them build a stronger competitive position over time.

Skepticism with social software persists, in part, because social software evangelists are their own worst enemy. They have failed to effectively communicate how social software can drive real operating benefits.

My comments:
1.        I find the branding of the report a little odd – Ethernet cables and switch?  Marks it as being about IT infrastructure when actually it is idea for line of business managers and C-suite execs.
2.        The report makes a very useful distinction between adoption success and business value success:

However, interest does not necessarily translate to meaningful use or performance improvement. Why then do social software advocates focus on adoption, defined as the number of users who have accessed social software, to measure success? Adoption does not measure frequency or sustained use nor does it link usage to performance improvement or business benefits.

This is an incredibly important area where we need to make the step from ‘nice to have’ to ‘business critical’.
3.        Exception management is a big theme – that existing business practices have significant overhead when dealing with the large volume of exceptions to the standard processes. I would agree, that in many businesses I consult with, exceptions are beginning to outnumber the in-process elements.  Typically these are dealt with using email or other 1:1 communications such as phone calls or faxes.  Social software can make a significant difference in reducing (and dealing with) these exceptions that occur again and again.
4.        The two most prominent case studies mentioned in the report, Alcoa and OSIsoft, are very impressive.  I’d love to find out more about their solutions and deployment methodologies.
5.        There are some very valuable strategies for measurement used in creating the report- we’ll be adopting a number of these techniques in our own projects.

All in all, highly recommended for your own consumption..

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