Re:Tooling -- Social Networking Platforms: Making Social More Social

For the rest of the June 2009 issue of CRM magazine — The Social Media Issue — please click here.

In the nascent stages of Web 2.0, a company that wanted to get ahead of the curve and incorporate wikis, blogs, and enterprise RSS feeds typically chose the best-of-breed solutions from each of those areas and glued them together on its own as much as possible.

This is no longer the case for the vast majority of companies, says Jon Mell, lead of the enterprise consulting practice at United Kingdom–based Headshift. In the past year, Mell says, social software platforms have emerged that can drastically reduce integration requirements, offering clients the functionality necessary to keep up with an increasingly social customer base. This isn’t to say that integrating best-of-breed applications is completely outdated, though. “When you have a very niche need, the only way [to] provide something that really fits…is by writing custom code to integrate best-of-breed components together,” he says.

Welcome to the social software platform space, in which Mell sees three clear leaders—IBM’s Lotus Connections, Jive Software’s Clearspace, and Socialtext with its Workspace offering. (See “Social from the Inside Out,” Real ROI, page 44, for a Socialtext case study.) Mell sees no real market-share leader yet among these three, and plenty of other vendors are sure to come up and compete for the social hearts—and wallets—of many companies.

According to Ed Thompson, vice president and distinguished analyst at Gartner, the ratio of operational, analytical, and social CRM in packaged applications will shift from 90:9:1 this year to 70:20:10 by 2020. “It may seem like companies are dabbling and not taking this seriously,” he says, “but 10 years from now it will be a big part of what CRM means.”

For companies looking to invest in social software platforms, Mell suggests first identifying the exact business problem. Looking at the three leaders, he says, it’s not as if one is necessarily better than the others. Rather, each is more adept at solving a particular business issue. “Before you jump on the bandwagon, find something that actually solves a problem you have,” he says. “Vendors have a baseline of common functionality yet solve slightly different problems.”

Insofar as pricing, Mell says companies can expect a “sweet-spot” price of approximately $50 per user, though the model—subscription-based, license-based, or a one-time payment—can vary. For example, Socialtext’s monthly charge for its Workspace product (along with its social networking and messaging applications, People and Signals) is $15 per user for a minimum of 50 users—if you opt for the hosted service. “If you have 50,000 users in an organization, the price can look quite scary,” Mell admits. “But you have to look at the value it can provide.”

The key element of success for these platforms, Mell says, is that they integrate into existing work practices and connect seamlessly with internal and external members of a company’s particular community. “You must have the ability to have a profile, connect to Facebook and LinkedIn, and tag content,” he says.

Successful implementation of a social software platform is essentially like any other CRM-related deployment, analysts say: Make sure the business problem is clear, have an executive as an evangelist, and take things one step at a time. “An example of a worst practice would be to roll it out to [the] entire organization and say, ‘Here’s great social software stuff, log on and be social,’” Mell says. “That doesn’t work. You must make it clear to people why they’re using it, what it’s used for, and when [they] shouldn’t utilize it as well.”

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SIDEBAR: >> Stairway to Social-Computing Heaven

1. Define the initiative and its purpose.
2. Cede some control to encourage participation.
3. Understand and reward different kinds of participation.
4. Acquire skills to build relationships online.

Source: Gartner

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SIDEBAR: Now...and Then

By 2010…

• more than 60 percent of Fortune 1000 companies will have some form of online community that can be used for customer relationship purposes; and
• more than half of companies that have established an online community will fail to manage it as an agent of change, ultimately eroding customer value.

By 2020…

• the ratio of operational, analytical, and social CRM in packaged applications will shift to 70:20:10 (from 90:9:1 this year).

Source: Gartner

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SIDEBAR: >> Quick Snapshot

[Source: Jon Mell, Headshift]

Vendor	Solution	Pricing Model	Commentary
IBM http://sn.im/lotusconnections	Lotus Connections 2	One-off perpetual license model	Strongest profile features, and excellent at finding expertise. Can be used as a social operating system to power other applications.
Jive Software http://sn.im/jivesoftware	Jive Clearspace 2.5	Subscription-based	Strongest discussion feature and the most depth in terms of customization. Also, the most rounded in terms of general use, and has a community offering for public-facing projects.
Socialtext http://sn.im/socialtext	Socialtext Workspace	Subscription-based	Strongest wiki and status features with offline capability and Microsoft SharePoint integration. Available as an appliance, the desktop client could have a dramatic impact on adoption.

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Contact Assistant Editor Christopher Musico at cmusico@destinationCRM.com.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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