The way employees, customers and partners interact with technology is changing — and these changes are affecting processes, systems and cultures. And while most CIOs are aware of the evolution toward social business, it’s not always clear how to evolve their own business, and even the role of CIO itself.
Businesses are facing massive and unprecedented levels of change, thanks to cloud, social media, mobile technology, Big Data and the consumerization of IT. They have up to five generations in the workforce, from digital natives to digital immigrants, and often have to deal with stagnant or declining IT budgets.
Consumer-oriented business models are changing the role of the CIO; the three-year ERP project with a five-year projected ROI is a thing of the past. Technology is changing too fast, and business leaders want to see results in months rather than years.
“It’s pretty scary what’s happening with business models — they’re being created, being destroyed and being created every three years,” said Ray Wang, principal analyst and CEO of Constellation Research, at NetSuite’s SuiteWorld 2012 conference held in San Francisco last month.
“If you had a five-year IT plan in 2008, you would have totally missed Facebook, cloud and mobility, and you’d be sitting there with some ugly architecture,” said Wang. “These forces of consumerization are happening right now and happening very rapidly.” These forces go beyond an employee using their iPad at work. “B2B and B2C are destroyed — it’s back to people to people,” he said.
“I believe social, mobile and cloud is how all apps will work — if they’re not working that way today,” said Zach Nelson, CEO of NetSuite. Customers want to interact across myriad devices, whether smartphone, Facebook page or point-of-sale system, and the business has to recognize the customer across every one of those channels. Business users expect a business-to-consumer experience. Even retailers buying products from a supplier want that B2C experience.
“Apple defined a new set of experiences, and the consumer expects that from others,” said Nelson. That extends to business apps, including commerce. “The commerce space is going to change rapidly,” he said, adding that ERP, CRM and global capabilities (multi-tax and multi-currency) are the necessary building blocks for delivering this Apple-like experience in the business space.
At the conference, NetSuite announced its commerce-as-a-service offering, called SuiteCommerce, a commerce platform that supports any device and any business model, which is integrated into back-office commerce operations.
“It’s not ecommerce, it’s commerce — it’s a single website channel,” said Nelson. “There are so many (channels) there basically are no channels.” Commerce-as-a-service envisions many, many other touch-points, he added.
“Many of our retailers are seeing more than 10 per cent of transactions flowing in through iPads,” said Andy Lloyd, general manager of ecommerce with NetSuite. That means business requires a responsive design, one that adapts to the device it’s being accessed from, and one that isn’t going to lock the business into any one decision.
“Our view of social is different from other app vendors,” said Nelson. “We focus on business processes — where are the social touch-points in business processes and how do we enable that? That’s what SuiteSocial is designed for,” he said in a press Q&A at the conference. “Our strategy is more about socializing our data and putting it into whatever receptacle the client is using.”
These trends affect everyone, from Fortune 5000 to Fortune 500, said Bill Briggs, deputy CTO and global digital lead with Deloitte Consulting. But how do they build the foundations of their companies on those trends? A CEO of a bank will tell you that processing transactions is already a difficult task. These new expectations will affect operations, from employees, partners and vendors to bloggers, competitors, consumers, ambassadors and fans.
“Social is not about the social platform, though that’s interesting,” said Briggs. “It’s about influence and intent.” Similarly, mobile is not about the mobile platform. “It’s how do I rethink the business, can I take advantage of the context of who my customers are and what they’re doing at the point of business contact?” Businesses are fundamentally going to market differently, and the most successful post-digital efforts will be driven by customer engagement, he said.
Today, because of the cloud and Big Data, we can run massive queries and models we could never have conceived of before, he said, but businesses need to figure out how to use that to affect business change — they need to retool, reorganize and reposition the interaction between people and technology.
“It’s not just do what you’ve always done differently, but do fundamentally different things,” said Briggs. Plan big, start small, fail fast and scale soon. If you don’t execute your IT strategy in 12 months, it’s probably going to be irrelevant.
Channels will change over time and more digital channels will emerge, said Wang. At its heart, a social business is a series of design principles and processes to create one channel of communication with individuals. Rather than B2B or B2C, we’re seeing the emergence of P2P (people-to-people). “You play different roles in your life, but marketers market to you as one individual,” he said. “P2P is creating a shift (and that) requires a different way of thinking.”
Esteban Kolsky, principal and founder at ThinkJar LLC, says we should avoid calling it social business — it’s just the next evolution of business. It’s not about socializing, but about how to collaborate and co-create. “If you can do that, then you’re what most people would define as a collaborative business,” he said.
“The biggest hype is that by implementing social media channels like Facebook you actually become closer to the customer, which is nonsense,” he said. “We’ve deployed hundreds of channels in the past and never become closer to the customer. You need to realize that your business has to change.”
The purpose of social business channels is to create value for the business and the customer. But it often breaks down behind the scenes because those channels are not designed for that; if customers are complaining over Twitter, that social business channel has little value if the business isn’t following up with those customers.
“Facebook has no place in a discussion of social business,” said Kolsky. “Facebook tried to get into business and it failed. You don’t go onto an online network to be sold to. You are there to interact with your friends. General Motors has just withdrawn from Facebook. It’s not for enterprise business and it’s not a social business topic.”
A lot of businesses believe if they deploy Twitter for customer service and Facebook for marketing that simply by having a presence they are becoming a social business, said Brian Solis, principal analyst at Altimeter Group. In fact, that can perpetuate the problem; they underestimate what social is and what it means to the business.
“A lot of this discussion around social business has not gotten to the level of making a business case,” said Solis. “Businesses failed at F-commerce (Facebook-commerce) because they f-ed it up. Look at GM’s ads and you see that GM has other issues beside Facebook.”
We need to get to more of an adaptable framework — social and whatever is next — and develop an infrastructure that can adapt to experiences, not react, said Solis.
There are benefits to social business in terms of ease of use and deployment, but it still requires a huge amount of investment from a behavioural change perspective. “CRM fails because people don’t take it seriously, they don’t adopt it properly,” said Martin Schneider, research manager of 451 Research. The same goes for social business.
“This is an ERP conference, but we’re talking about B2C2B, treating people as people rather than accounts,” said Schneider. “The idea is that the experience is enhanced, multi-channel, consistent across channels and managed easily. That’s what’s really cool. Social business is not about social media, it’s about the way we interact in new ways.”
But this is going to be a tricky balance. “I had to leave my Twitter handle in my last job,” said Schneider. Many businesses are still operating with Old World principles: This is my brand, I own you. A social business operates with New World principles, where personal branding can further an employee’s own career while furthering the business. “I don’t think the legal ramifications have gotten there yet,” said Wang.
For the next-generation CIO, the challenge is putting all of this together and creating a new business model, said Wang. The CMO says keep is simple, scalable and sexy. But CIOs want safe, secure and sustainable.
“It sounds fluffy but this is the strategic differentiation — make disruptive technology work,” said Wang. “You’ve got to be able to put business and technology together.” IT has to find a way to standardize these disruptive technologies, he said, otherwise the business is going to fail. Business users will find a way to use these technologies and go around IT if they have to — but they won’t know how to manage them.
This is the new corporate digital divide: Those who get disruptive technology versus those who don’t. “The gap is going to be huge,” said Wang.