This is a guest post by Graham Doig on Value Realization applied to Enterprise Social software projects. You can think of Value Realization as simply the value extracted from a process or project.
Graham is a Business Strategy Consultant (BSC) at Microsoft. He helps Microsoft’s global customers to realize their investment in Microsoft products. He does that by working with them to align their business and technology strategies and achieve successful adoption. Graham works with both customer business and IT groups to help them develop a strategy to realize change and drive productivity within their organizations.
Graham holds an MBA and PhD from Loughborough University. He is a regular presenter at conferences and contributor to the academic press. He also regularly lectures on a range of information technology topics to MBA courses at leading UK universities.
I’ve asked Graham to share some of his key insights and lessons learned in the art and science of Value Realization from his adventures in the field, across real-world customer engagements.
Without further ado, here is Graham Doig on how to realize value from Enterprise Social software projects …
The Essence of Value Realization
Today Value Realization is a critical element of any effective IT enabled business change. It consists of the set of activities that are required to ensure the delivery of the value that is expected from a business investment. But before value can be realized some important things have to happen:
- Something has to change; no change, no value;
- The change has to deliver measurable benefits; if it can’t be measured it’s not a benefit;
- The value of the benefit needs to be defined;
- Someone needs to own the delivery of the value.
Once all of these things have happened then Value Realization can start to take place. The essence of Value Realization is that over a period of time the value being attained from the change is monitored and measured by the benefit owner. The objective is to ensure that the full projected value is attained within the expected timescales.
The Social Computing Phenomenon in the Enterprise
Social computing has become commonplace in the range of personal communication tools that are available today. Almost everyone who has access to a computer and the internet is familiar with Facebook, Twitter and Linked-In to one degree or another. It is estimated that Facebook now has over a billion engaged users and Twitter has more than 350 million tweets per day. These applications now provide ordinary people with enormous power to communicate, to converse, to comment, and to criticize or praise. So can this capability be transferred to the enterprise and can it be done in a manner that delivers business value? Well the most recent statistics suggest that most businesses believe that it can. In a recent MIT Sloan report the response was that the importance of social business to the organization had increased significantly between 2011 and 2012. This increase was identified in all industry sectors and the increase in importance ranged mainly between 10 and 20 percent. The challenge for all enterprises now is to translate this recognized importance of social computing into uses that deliver business value.
Using Enterprise Social to Deliver Business Value
The first challenge that is encountered when trying to identify how social computing can be used to deliver business value is that Enterprise Social does not take the form of a traditional app that supports the day to day operation of the business. Neither does it deliver the capabilities required for measuring the performance of the business. On the face of it you could conclude that there is no clear role for social computing to play that can directly deliver value to a business organization. This would be wrong! Although identifying the value that Enterprise Social can deliver might be harder that with more conventional IT apps, business value can still be identified if you look in the right places.
Today there are two major forms of Enterprise Social emerging. The internal view which focuses on Social Productivity and topics such as Employee Engagement and Team Collaboration, and the external view that is focused on Social Marketing such as Marketing Campaigns and Social Media Monitoring. Both Social Productivity and Social Marketing have the potential to deliver business value. Being linked more closely to more mature business activities such as marketing and CRM, Social Marketing provides clearer opportunities for generating business value. This can include increasing the speed of customer adoption of new products and delivering increases in customer satisfaction. Being less mature, the opportunities for Social Productivity to delivery business value are harder to identify but they do exist. Social Productivity can lead to value being realized such as reduced staff attrition rates, and improved speed to market with new products.
Realizing Value from Enterprise Social
So if business value can be generated by the use of Enterprise Social how can this value be identified, quantified, measured and realized? This is arguably the biggest question of all. A key tool that is available for addressing this challenge is the ACME model:
- Activate – a social network has been activated to enable connections;
- Cultivate – the social network is cultivated to drive quality interaction and adoption;
- Mine – the information generated by the social network is mined to obtain Insights;
- Execute – the insights are used to initiate and identify action that we then execute to realize value.
By applying the four steps of the ACME model business value can be identified and Value Realization can then be used to track the attainment of this value. The first step in the ACME model is Activate; a social network must be activated before anything can be done to generate or realize value. Activation assumes identifying and defining a purposeful network i.e. the network has to support a recognizable community that share a common interest, pain or need. Effective activation means that the community adopt and use the social network and that they participate by engaging in quality interaction. It is the interaction that takes place in the social network that generates mineable information.
The second step, Cultivate is a critical activity that must be undertaken to ensure the growth and success of the social network. A poorly subscribed and underutilized social network is unlikely to produce very much mineable information and is not likely to deliver much business value. A network requires a critical mass and level of activity before it will attract and grow new members. Without sufficient activity so as to be useful, the network will wither and collapse. A social network that can deliver business value thus must be active and vibrant and this can only be achieved through active cultivation.
The next two steps in the ACME model are the two that are most crucial for value identification and Value Realization. Step three is Mine; the information that flows from the social network must be mined effectively. It is possible to mine all the information that is being generated by a social network in an attempt to generate insights and whilst this is an acceptable approach it is very dependent on luck. An enterprise that adopts this approach for mining information from a social network is hoping to get lucky! An arguably more effective approach for mining this information is to focus on information that is relevant to the enterprise. Relevant is all about measuring the right thing, not everything. The right thing for every enterprise will be different but there is a standard set of information categories that can usually be considered. These standard information categories typically include:
- People – who is involved; a customer, an employee, a regulator
- Location – where is it happening; a city, a country, a retail outlet
- Product – what product are people talking about; a car, a chocolate bar, a movie
- Events – what has happened; a purchase, a complaint, a promotion
- Time – when did it happen; today, yesterday, next week
By being relevant and focusing on these types of information categories an enterprise is no longer hoping to get lucky; it knows what it is looking for. A critical enabler for effective mining is social analytics, undertaking appropriate analytics on the information flowing from social networks is a paramount activity required to unlock the potential value from Enterprise Social. It is the analytics that generate the insights that are the seed corn for value. These insights could include gaining a better understanding of customer needs, identifying what consumers think about our product compared to a competing product, or finding out what citizens really think about a government policy. However, gaining insights is not enough, the fourth activity of the ACME model, Execute, has to take place for the potential value to be realized. The action can be executed by an individual, a team, or the organization as a whole but without something changing, an action, the insight will be valueless. It is only by executing an action that value can be realized. Typical actions that insights from Enterprise Social can generate might include monitoring and responding to customer complaints faster, responding positively to dissatisfaction being expressed in employee social networks, identifying patterns of exceptions and developing new products from early identification of new trends.
Execution also brings us right back to Value Realization because execution means Change and it is change that delivers business value. The actions that are taken should have clearly defined measurable business benefits; the value of the benefits and how they will be measured needs to be defined; and someone must take ownership of the benefits and the value that will be realized. It is only through effective Value Realization that Enterprise Social will be successful within your customers’ organizations.