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Step up to become a ‘social enterprise’

Step up to become a ‘social enterprise’

Marc Benioff predicts a ‘corporate spring’ or social revolt for CEOs and CIOs who refuse to listen to customers.

If the Arab spring led to the downfall of dictators, so can CEOs – and CIOs - be toppled into an equivalent social revolt by angry users, customers and business partners. Salesforce CEO Marc Benioff, speaking at Dreamforce 2011 in San Francisco, predicts a ‘corporate or enterprise’ spring for heads of companies that do not take the lead to become a ‘social enterprise’.

Salesforce describes ‘social enterprises’ as organisations that revolutionise their customer and employee engagement through the use of social, mobile and open cloud technologies.

“It is more important to listen than ever before” to these key stakeholders, as he points to the role of social media played in the recent protests in the Middle East. “The technology is creating this change and transformation,” Benioff says..

“Things are changing and evolving. We all need to step up we have to transform,” he says. “The merging of the culture and technology is key.”

These technologies create social customer profiles, employee social networks, customer social networks and product social networks that companies can use to “delight” their customers in entirely new ways, he says.

Benioff says his own company, which had started cloud-based business software, had itself undergone the same transformation. “It was born [in the] cloud in the 1990s, and reborn [as] social.”

He transposes this to the business sector as a “corporate spring and enterprise spring” where a corporate CEO will fall for the same reason, because the CEO is not listening to customers and paying attention to employees.

“We have seen it in the Arab spring. We can see it in our customers, in every aspect of the world I have travelled to.”

Business leaders should continue to make sure their customers are successful, he says. They need to build an “open culture” that is built on trust and transparency. They should also focus on “individual contributors” and these are not necessarily the managers.

Benioff says Salesforce has “chatterati” – a reference to their software collaboration tool Chatter – peoplewho they bring offsite and who generate ideas and insights.

A strategy the enterprise can undertake is through the creation of a social database. The question is whether companies are keeping track of their customers’ social information and are evolving their knowledge of what customers want.

A strategy is to create customer social networks and employee social networks. He cautions, though, that this goes beyond creating a private Facebook for the enterprise. It involves collaboration, integrating business processes and workflow in your social network including customer apps.

Angela Ahrendts, chief executive of Burberry, says the fashion company worked with Salesforce for its goal to be “digital end to end”. Today, she says, customers have total access to Burberry on any device and anywhere. “You have to create a social enterprise today, get connected with anyone who is touching the brand,” she says. “If you don’t do that, Ii don’t know what your business model will be in five years.”

Benioff, meanwhile, cites the Bank of America as another example of a company that has taken the ‘social enterprise’ route. Its modern branch is not on the street but on Twitter, he says. Customers go to the bank's Twitter site if they have a problem or want to find the location of ATMs.

Benioff says more social enterprises are emerging. The challenge is whether the C-suite, management and employees understand the need to transform to become a social enterprise.

Half pregnant on Facebook

The conference also tackles the best practices for becoming a social enterprise – and a number of the speakers point out this goes beyond simply having a presence on social media such as Facebook and Twitter .

Gary Vaynerchuk, blogger and speaker on social media, calls the latter being ‘half pregnant’ in social media, for example setting up a page on Facebook just to be on there.

“The future is social and mobile unlike any other,” says George Hu, executive vice president, platform marketing operations for Salesforce. He says a visionary CEO should be aiming beyond just a Facebook page for the enterprise. He says customers are now in a difference place and access different channels. “There is no mute button on Twitter,” he says, "it can go around the world fast. If you don’t have a clear view of your customer, you are in a bad spot.”

A cloudy future

Another speaker, Timothy Campos, CIO of Facebook, says the social networking company “grew up in the cloud computing world.”

“We are able to adopt to that across the board - 70 percent of our apps are running on the cloud, and allows us to move faster and more productive as a company."

A key lesson he has learned is to “embrace this change holistically not just to look at one specific area and adopt it.” The benefits are realised “once you are doing it across the board.”

Vivek Kundra, former US government CIO and now a fellow with Harvard University, points out the benefits of government agencies moving to the cloud. He says the federal government spends up to US$80 billion dollars in a year and one of the most frustrating issues was seeing project after project fail because it is based on an “old IT model”. This meant vendors bid for government contracts and were chosen not for their expertise, superior technology or innovation but because they have mastered “how to navigate procurement processes”.

He says the Department of Defence spent 10 years and US$850 million trying to implement a personnel system. “We can’t continue on that path,” says Kundra, who had pushed for the “Cloud First” policy as government CIO.

This policy, he says, recognised there were amazing innovations outside “the old model, the IT cartel” where people who win the contract put in many people as possible and bill at exorbitant rates.

Governments around the world are facing tough economic times, and there is a need to find innovative ways in serving systems effectively. “The money is spent on the wrong places,” he says.

“‘We must encourage governments to start thinking about...looking at the model where you do more with less, or do much more with less.”

“We worked very hard to move forward in that direction, we are seeing massive adoption of cloud technologies across the board,” says Kundra.

During his presentation, conference attendees were given a copy of his essay that came out this week in the New York Times, where he pointed out the advantages of cloud computing, as the global economy goes through a “slow and painful recovery” and budgets remain tight.

In the essay, he predicts the budget crisis will accelerate the move toward cloud services. Governments, businesses and consumers will benefit but not everyone will agree with the model. His essay concludes: “Public and private organisations that preserve the status quo of wasteful spending will be punished, while those that embrace the cloud will be rewarded with substantial savings and 21st century jobs.”

Sidebar: Ovum on Salesforce.com’s ‘social strategy’

Carter Lusher, research fellow and chief analyst of Ovum says Salesforce is tying all three “socials” – customer, employee and product – together so there is leverage between all three. “This is bold move one that early adopter customers, whether enterprise or public sector, will embrace.”

The following are his insights on the strategy announced at Dreamforce 2011:

“It is Ovum’s opinion that this was a smart decision as Ovum’s conversations with and surveys of CIOs around the world indicate that these are top-of-mind concerns.

However, Salesforce has smartly expanded the concept of “social” beyond customer-facing activities like marketing to include an employee social network and a product social network.

Finally, Salesforce is tying all three “socials” – customer, employee, product – together so that there is leverage between all three. This is a bold move and one that early adopter customers, whether enterprise or public sector, will embrace.

Equally bold was Salesforce.com’s commitment to HTML5 as its go-to technology for tablets and smart phones. While HTML5 is still an emerging standard and somewhat immature, this adoption should help increase the speed and agility of Salesforce’s mobile client development. A side effect could be that Salesforce’s HTML5 strategy along with Apple’s long standing commitment to HTML5 – and rejection of Adobe’s Flash – could accelerate the market adoption of HTML5 making Salesforce’s decision very smart.

A point that flew somewhat under the radar, but that could have major market ramifications, is Salesforce’s Social Enterprise Licensing Agreement. The old primary licensing was based on a per user model, which breaks very easily in an environment where a customer wants to give potentially every customer, employee, and product access to some Salesforce functionality. Again, Salesforce was smart to listen to its customers and devise a new licensing scheme. Not only does it eliminate the administrative nightmares of a user-based license, but it gives Salesforce the ability to be deployed “wall to wall” within a customer’s organization, which is especially relevant for the collaborative tool Chatter. Once the customers, employees and partners have some relationship with a Salesforce product there is then the opportunity to cross-sell other products increasing Salesforce’s penetration.

Ovum recommends that enterprise and public sector IT executives use these recent Salesforce announcements along with Ovum’s 2012 Super Themes as catalysts to review their near- and long-term IT strategies. Even if the decision is not to be an early adopter of these concepts, this strategy review exercise will give IT the opportunity to future proof their plans and be ready to discuss the options should their 'C' suite executives want to know what IT strategies are for the social enterprise and mobility."

Divina Paredes attended Dreamforce 2011 in San Francisco as a guest of Salesforce.com

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