The concept of networked enterprises is something that’s top of mind for me these days as we chart the next chapter of social collaboration – not as a side dish or a condiment but as a main ingredient in the world of work and by extension, in the new enterprise technology stack.

I wrote about this recently on the newly minted Diginomica site, specifically about the difference between “community” and real networks. Big networks to embrace high velocity high value opportunities such as customer driven innovation and service but as important, and a topic that gets left out, tiny operational efficiency opportunities that can bring about huge business benefit by wrapping your network around it. Some examples of real network benefits such as Ariba, Yelp, Numerous learning networks, even supply chain. Here is the full post.

The confluence of data, business process, content and the wrapping of expert networks is something we’re only now starting to understand. And it won’t come from just extracting data from applications or integrating social into process systems. Where it makes sense to wrap our business networks around our transactions or structured work, we will. Where it makes sense to re-think entire applications stacks and how we fundamentally operate in a network first design, that will happen as well. So far we’ve tried to emulate Facebook in the enterprise and the results have been less that optimal. As the power of contextual networks grow, they become subcutaneous and the opportunity to then put transactive capabilities on these networks offers entirely new opportunities.

My current favorite example of this? A serious pain point in logistics where networked fleet management for truck drivers of a logistics provider can identify alternate traffic routes to avoid traffic delays and reduce whopping average costs of $79,000 in fuel costs, per truck, per annum. Another one we’ve seen with customers: Expert networks of nurses looking to train each other not on standard policy stuff but tiny tips and tricks in the operating room that reduce latency and risk. These are contextual and very situational and where  the “what’s in it for me” is crystal clear to all participants.

Such networks form from one acute business pain point but once its formed, a slew of new transactional data and operational opportunities surface that can be dropped into these networks. The difference though is that business context and the fundamental raison d’être for these networks are never in doubt.

The first iteration of cloud based applications has been largely focused on copy-pasting on-premise functionality with well understood benefits that comes from cloud based delivery and consumption. But network-first business models, coupled with highly extensible cloud platforms will change how we think about working, how we onboard, train and enable employees and partners, how we serve customers and how we get more out of our supplier relationships.

This is a topic I look forward to discussing with peers in the European community, in particular. Why? Because this audience always keeps you honest. As I said in a previous post about speaking here in Europe:

I’m generalizing here, but customers in North America are often more pre-disposed to experimenting with new technology. The situation in Europe has always been different and European customers have a way of rapidly re-calibrating you down to reality when you start playing buzzword-bingo by using terms such as “social business”. These don’t mean much to them. European companies are staring a tenacious recession, unemployment, macro re-skilling requirements and industry-specific challenges and opportunities. Regardless of the promise of any new shiny technology innovation, they always force you to winnow down the value of new technology to 2-3 simple benefits that apply directly to established hardships and opportunities. And they glaze over solutions to problems they don’t have.

The conversations here are always grounded in tangible results to established problems and they make me a much smarter person with every subsequent visit.

Looking forward to seeing many colleagues in Milan.

2013 SAPPHIRE NOW / ASUG , SAPs flagship user conference was a big one for me and our Enterprise Social Software team at SAP. Exactly a year ago at this very event we unveiled SAPs strategy for social and collaborative software. In Madrid at the European version of this event later in the Fall, we showed real product. This year we showed more integrated social collaboration with business applications, analytics and as a service in the SAP HANA Cloud Platform, and shared some statistics on our business. Here’s a nice quote about the product from IDC’s Mike Fauscette’s blog post about the event:

SAP is making good progress on the cloud enterprise social network (ESN) front with Jam, which grew over 800% year over year. The key long term to ESN, I believe is to get them embedded inside all of the enterprise apps so that social collaboration becomes an integrated part of everyone’s work flow. SAP is one of the vendors that has real opportunity to do that across the enterprise.

(Thank you, Mike.)

A businesses ability to bring its expert networks of employees, customers and partners to collaborate around business processes, around real time data and analytics and content is what will drive not just the future of social software but how enterprise software will be built. I spoke to John Furrier of Silicon Angle about this at the event, here.

“It only makes sense that competing with others distracts from the distinctiveness that makes our art special. By comparing ourselves with others, we lose the magic that developing our core art affords the world. Competition with others in a sense makes us ordinary. It encourages imitation and, if we are not careful, makes us lose our essence. How boring.”

and

“Perhaps the best illustration of the magic that competing with oneself can bring to our art is Steve Jobs. Steve Jobs’ maniacal obsession with his art was apparent to all in the careful attention to detail observed in most Apple products. This was clearly born out of his internal vision, which would not have seen the light of day if he did not stay committed to tapping into his inner creativity. We owe it to the world to bring our originality and insights to the work that we do.”

When it comes to emerging or low maturity categories,obsessing focusing too much on competitors can amount to at best, much ado about nothing and at worst, be down right dangerous. Not to mention really expensive when we can afford but a few marketing arrows. The reality is that in early stages of market maturity a good chunk of your competitors product and market strategy is experimental anyway. And the kicker is that even they don’t know which 50% will really work. And too often all it does is just distract product teams by putting a read view mirror in front of them and sucking every ounce of ingenuity out of their thinking about what can be. The wildly successful Tesla S, for instance, has redefined what a car should be and can be with a software-first ethos, yet with an appreciation for the basics. Can you imagine if Tesla had merely copied all the elements of the traditional car, save for the battery?

Software marketing has changed forever with the advent of cloud base delivery. The speed at which you need to move lets you define or re-define categories like never before. The very definition of what massive categories such as core HR, in-memory computing platforms, Collaboration, even CRM, is up for grabs, right now.

Sure, you need to have an understanding of where the competition is going, inform your play books and set your land mines. But too much focus on the competition just means you end up being reactive to a wobbly market definition instead of thinking about how to lift and shift the goal post.

About the only thing that is in fact constant is the ingenuity of your products your products innate understanding of the customers need and how well you communicate this.

It’s been an incredible ride to say the least. I’m a lucky guy – I came to SAP to help build out its products and go-to-market in the social and collaborative software category. But what I really I got was a chance to get in on the ground floor of a unique opportunity to participate in shaping SAPs place in the larger software category with SAP Cloud.

Our mantra has always been clear that social is not a destination but a critical enabler to established performance KPIs and that’s what driven our product strategy and our value proposition to customers. We started not with social but with the state of our customers businesses – both challenges and opportunities to drive revenue, lower cost and mitigate risk. And then identified the needed dance between data, business process, content and people. And executed like mad against that strategy culminating in a re-launch in last year.

Thanks to the efforts of an incredible cross-functional team we doubled our growth in 2012. The sheer tenacity and close partnership between SAPs amazing cloud and on premise application development teams has been something to write home about. I was warned numerous times about how impractical cross-functional collaboration can be. But the lines between transactions, process and collaboration have been blurred forever and the customer demands a default process + social experience, now. And the teams made it happen.

I’ve always been straight forward with respect to my opinion about the various strands of “social business”, here. But the role of social and collaborative constructs to truly accelerate performance in the enterprise has never been more critical. I’ve covered this on this blog for 4 years now and in my past roles but after working closely with customers and with numerous internal industry and products groups at SAP, you truly get an appreciation for the role that systems of record play every day but also the gaps that remain in day to day work for your customers, your employees and your partners.

The power of connected networks, the availability of business and process context in the cloud or on premise or both is extremely powerful. This is why I was attracted to a company rooted in business process. As an industry, we’re just starting to understand how to leverage this. SAP has given me the opportunity to go really deep on this subject – understanding how for instance, thousands of contingent retail employees, or floor staff at casinos need to be on boarded and enabled at scale, or the costs of ramping up sales teams, the power of customer networks thanks to SAP SCN community efforts, or how the white spaces in tight fraud management processes or in transportation and logistics can expose unmitigated risk. And against that backdrop, where social collaboration can move the needle and where it can’t and with cloud economics in mind. I could go on and on.

I’m really privileged to be able to do what I do and especially at a time when the re-wiring of enterprise software to focus on getting work done (as opposed to a list of features) is only now underway.

A big thanks to our team and the teams we work with across SAP, every day.

Phase 1: Check.

@sameerpatel: Often heard #socbiz argument: “humans are social by nature”. Then why is it that #socbiz s/w adoption has been so hard historically?

Contradicting this is another popular statement about Social Business: “Its not about the technology, its about the people and culture”.

So which is it? The people or the tech?

I got some fabulous commentary in response to my tweet:

Bertrand Duperrin does what he does best (and why we became good friends instantly, years ago) by cutting to the chase on under currents:

@SameerPatel not sure that “human nature” is only made of good things . Greed, jealousy, anger are also part of it.

James Dellow, a seasoned collaboration practitioner brings up politics

@bduperrin @SameerPatel organisational politics too. “Results may vary”

Liz Coleman responds with the habitual preferences or the well known theory that technology needs to be 10x better to get users to change habits:

@SameerPatel interesting point. I would argue humans’ resistance to change, esp in regards to new technology (for vast maj.), could explain

Mike Boysen, one of the funniest and super smart CRM consultant says the fault really lies with organizational designs.

@SameerPatel I believe the design of the org is the driver, not the tools. Unfortunately, tools can’t do it alone yet. Tools should enable.

They are all right. But just imagine if you were an executive subsuming these arguments. You can see why you might pop an aspirin and say “to heck with it, I’m just going back to my old ways of work. The way we work today may well be woefully inefficient, but I know the devil I’m dealing with.”

Bertrand is right. Humans are some combination of social, greedy, jealous, angry and a 100 other things. And success against that backdrop is going to always be a function the people you hire, the culture you embody and the technology you pick to execute. The reality is that our historical definition of “social business” often requires you to go against energy that flows inside organizations, thereby requiring massive behavioral change. Social Networking is better than Email. Sharing is better than hoarding. And on and on. And Mike, Liz, Bertrand and James are well justified in their push back arguments.

In the face of all these extremely valid and conflicting arguments, one thing remains constant: Your best employees are always working towards their soft and hard incentives. Note: I didn’t say Goals. That only happens if your goals and incentives are well aligned and thats a different show. But ways to drive efficiency and execution performance will come from a) individual self improvement and b) working with others to improve output, if thats warranted for the job at hand. If the underlying technology forces you to do more of a) or b) than is needed, your carefully thought out plan to improve social collaboration is dead on arrival.

In reality, it is about both: human nature and the right underlying technology. But most important, its about stepping out of the people vs tech discussion and honestly identifying where social and collaboration concepts can in fact move the needle in terms of incentive alignment, and frankly, where it can’t.

Social Business has no doubt seen success in pockets. But mostly, Social Business to date is like a Salmon swimming upstream. We all know how that movie ends. It’s time to see how you can leverage social computing to enable the organization to swim in the direction of the incentive currents and help them collaborate more effectively where its apparently needed. And identify which technology puts flippers on your employees feet.

“Shareconomy” describes the societal shift from owning to sharing. According to Pörschmann, this is evident in several dimensions: “First, Shareconomy is profoundly influencing enterprise processes, because social media tools will become more and more popular. Second, the Internet is the place for teamwork, both in and outside the company. Partners, consultants, suppliers and customers will be more closely integrated as part of a networked process. The borders separating companies and organizations will become ever more transparent. Therefore, employees and managers must rethink and be prepared to share know-how, contacts and assets.”

My presentation was on the commercial value and benefit of the Shareconomy for the Enterprise. And if you have read this blog before, you know that I took the idea of “Facebooking of the global economy” to task somewhat. -). But in all seriousness, the theme was fantastic and the questions after were very engaging.

When I find a link to all of the keynote presentations I will update it here but I highly recommend giving them a quick look. Really excellent content from a great group of industry doers and thinkers.

Here are my slides on SlideShare:

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Transactional CRM, the system of record technology that lets you manage a sales cycle, a customer service request and marketing activity, is critical to make official records of who did what.

But here’s what striking to me: Traditional CRM, which stands for customer relationship management is a transactional and operational technology that never really touched the customer.

That may have been OK in the past, but today’s customer who is extremely well connected and networked thanks to the social web has radically different expectations of the companies that they do business with.  Beyond socializing, the social web is where we seek to research and engage with both, like-minded buyers and with purveyors with whom we want to do business. In a 2011 IBM study on Social CRM⁽¹⁾, 42% of those polled use the social web to share opinions about products they use, 39% use it to access product reviews, 23% said they outright rely on the “social web to interact with brands”.  Yet another supporting point to CRM pundit Paul Greenberg’s assertion that “the customer is in control of the conversation.”

Let’s dispel three misconceptions about the social web first:

1. This isn’t about bleeding edge industries anymore. A 2009 business.com study⁽²⁾ showed Real Estate and Construction, Healthcare, Media and Entertainment as top contenders for social media.
2. Access to social and traditional web content is now equalized. Even if you believe that a majority of your customers don’t use social media, traditional web properties such as Google and LinkedIn index even the few conversations that might exist and make positive or negative opinions about our wares visible to everyone.
3. No, the social web isn’t just about Twitter and Facebook where you may argue that your prospects don’t really hang out. Amazon Reviews (Retail), Trip Advisor (Travel), FlyerTalk (Airlines), Yelp (Restaurants), AngiesList (Services) and literally a hundred other topical forums are all part of the social web or what Mike Fauscettecharacterized as “systems of relationships” that are dis-intermediating your controlled marketing every single day.

Five Design Considerations

So how do we prepare for this changing interaction dynamic? The needs of this new breed of customers centers on the following 5 design considerations:

I’ve broken down each of these Design Considerations on the Customer Edge Blog, here.

“Sandberg may mean well, and she may be setting up a run for national office. But she doesn’t understand the difference between a social movement and a social network marketing campaign. Just because digital technology makes connecting possible doesn’t mean you’re actually reaching people”

I’m not going to debate Sandbergs motives in the context of Maureen’s article – not my bag. But as I spend my time thinking about product vs real established customer needs at work, this last statement about connecting vs reaching exposes the stark difference between consumer social networking and what happens in the world of work.

Enterprise social networking as we’ve known it thus far has had the exact opposite problem:  Just because digital technology makes reaching possible doesn’t mean you’re actually connecting.

Reaching people is accounted for. It’s called Email. In the world of work, connecting doesn’t come from just bringing people together. Really really connecting to impact performance and execution comes from surrounding real purpose and context such as a sales forecast data point, a problematic travel expense statement, a curve ball customer request, a need for supplier arbitration, with your network of people. You can reach people all day long but to get the network to truly galvanize around a problem, you need to infuse smart expertise identification and social or collaboration at the point where problems and opportunities emerge.

This is the expectation of “social”, in the enterprise.

When you start typing your questions, Facebook will suggest search queries and clean up your question. You might ask, “Which of my friends like The White House?” and it will simplify and suggest “My friends who like The White House.”

The search could be most useful for situations like finding friends in a specific city you plan on visiting or finding people who like a band you’ve got an extra ticket to see. You can also use it to search for things “nearby.” If you’re looking for friends who live near your current location, you can look for “friends nearby.” If you need a hospital, you should call 911, but you could also search on Facebook, and it shows you the hospitals in your area  (while you’re bleeding out, of course).

There’s plenty of other analysis. See this by Danny Sullivan on how it works and just so you’re not getting too carried away, Om Malik does what he does best by digging into practical feasibility of getting this right  But lets assume that Facebook does pull it off for a min. In that case….

This is massive for Facebook and Google’s never seen any competition like this. Simply put, being able to choose people as filters to your search is extremely powerful.

That said, two things come to mind as I read this:

First, this is far from a Google killer.

Google still has a lot of runway to get this right. Ultimately we are talking about the war on owning Purchasing Intent. Facebook might have a stronger hold on consumer or B2C products (e.g. “I like this new Viking Stove”), but it’s far from perfect. Personally, I’m really suspect about any search algorithm that puts too much emphasis on “Like”. It has to be the most abused social metaphor of all time – first, we barely think twice before “liking” something. Second, given all the marketing gimmicks to get you to Like stuff, it’s hardly an objective filter. And third, even it they manage to get it right, the whole world of B2B just isn’t part of the conversation on Facebook in any meaningful way. Those conversations are still happening outside Facebook’s walled garden on branded communities. This game is far from over.

The real winner is vertical social networking.

Most significant in my mind though is that the real winner here is vertical social networking. Facebook just bifurcated search forever. They now propose to own the “Here’s what my friends think” segment. The other major segment is “What do the experts think?” And that data is neatly indexed on vertical and topical social networks. Think Yelp, think ChowHound, think WebMD, thin TripAdvisor and the biggest, Amazon Recommendations. The reality is that our friends can often be terrible references. If I’m looking for a great kitchen knife, I want advice from a chef or a seasoned cook. Not just my best pals. And that’s still the work of other topical sites. I use experts lightly but when it comes to serious purchases, you will want to rely as much on unknown strangers who are qualified on a subject as much as you will your friends. And those “unknown experts” passionately opine not on Facebook but on these vertical social networks. Their relevance just went up 100 fold.

As the social web confuses most of us on where to find what and the sources increase by the day, Facebook just added an intense level of clarity by letting you toggle between people you know and people you trust on a topic. And this level of clarity is THE single most risky thing to happen to established web search. Feeding on the ambiguity of sources is what search engines thrive on. If Facebook gets this right, this ambiguity has now been seriously eroded and between what our friends think and what the experts say, we might just have all the information we need to make the purchase.

Then I saw this by Stowe Boyd over at GigaOm Pro. Stowe cites some insightful findings in Nassim Tableb’s book “The Surprising Truth: Technology Is Aging in Reverse“;

“We’re living in a Black Swan world, but what does this mean for the future of technology? My new book Antifragile argues that technologies, ideas, and theories – anything informational or cultural, as opposed to physical – age in reverse.

We may be trained to think that the new is about to overcome the old, but that’s just an optical illusion. Because the failure rate of the new is much, much higher than the failure rate of the old. When you see a young child and an old adult, you can be confident that the younger will likely survive the elder.

Yet with something nonperishable like a technology, that’s not the case.

There are two possibilities: Either both are expected to have the same additional life expectancy, or the old is expected to have a longer expectancy than the young. In this situation, if the old is 80 and the young is 10, the elder is expected to live eight times as long as the younger one.”

Stowe ends with:

“So, applying Taleb’s reasoning and Benoit Mandelbrot’s version of the Lindy effect, our modern social technologies — most of which haven’t been with us more than five years — can be guaranteed to be with us only an addition five years or so. And those pre- or proto-social technologies — like instant messaging and email — may be with us 50 years or more, even if the social tools don’t fall into disuse.”

Here’s the thing about reducing email with social networking: if you hate email because a good chunk of it is a irrelevant stream of information someone pushed at you without your consent, you aint seen nothing yet. Silo’d enterprise social networking can be way worse – not only do you have people pushing stuff at you, you have system notifications coming from applications drowning out even the few golden nuggets. As Constellation Research’s Alan Lepofsky wrote:

“Any reduction in the number of emails is a good thing. OMG I hate this one. Now instead of checking my inbox I have to check Twitter, Facebook, Google+, Yammer, LinkedIn, etc. Uggghhhh. Bifurcation of information is a real problem. Yes all these tools can send email notifications, but isn’t the point to reduce email? Yes many streams can aggregate information from multiple sources, but that just leads to a lot of noise, so how is that different than an inbox?”

Look, information overload is absolutely a huge problem. But enterprise social networking isn’t the obvious solution. What’s needed is what Stowe describes as “new communication technologies have to be a full order of magnitude better that those that came earlier”. That full order of magnitude won’t come from just shifting notifications from Outlook to SocialNetwork feeds. Rather, it will come from making it exponentially more efficient to message, to collaborate and to share in radically different ways where the outcome is 5-10-50 times better. And one of those ways is to infuse: a) Comprehensive people discovery based on new identity paradigms, and b) Collaboration into core business activities and tasks and in a way that implicitly shows how collaboration capabilities available at whatever point of action – a business event like discussing an invoice exception, or facilitating sales budgeting within your Finance ERP application, or dispute resolution with a supplier – making it far more effective to drive execution and decisions than anything that your zero-IQ email inbox can even dream of handling.

Nassim points a new headache: regardless of your good intentions to kill email, the odd are against you. Moving from one dumb messaging paradigm like email to another dumb messaging paradigm like stand alone social networking won’t cut it.

But in actuality, the stakes are really high. On one hand, most core business activities have a huge unstructured component that happens outside transaction systems such as CRM, Talent Management or Supply Chain. But we have a ways to go when it comes to leveraging social tools to facilitate this change. On the other hand, none of us need statistics to really convince ourselves that email bankruptcy is a fact of working life for almost all of us. So clearly the opportunity to show a better approach is ripe.

There’s some amazing innovation out there to super charge email. Simple tools such as Rapportive, Boomerang, and this very nifty tool from AOL called Alto (Hat Tip, Jeff Nolan). Whilst I can’t live without some of these, in the large scheme of things these are short-term Tylenol tablets to a tenacious problem that’s going to keep getting worse.

The answer won’t come from these sophisticated email tools but rather, from re-thinking business applications which is clearly underway and subsumes a lot of my time as I think about our product. And as CIO’s, it’s time to reconsider messaging as infrastructure and business software as applications. Rather, these teams need to collectively think about what combination of technology can re-cast the very essence of digital messaging by making it smart, in context of work that you are doing, and available at the point of action and decision making.

Comments also rolling in on Google Plus, here.

Image Credit: ClearContext.