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Social Business Strategy

Social Business Strategy

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a report on social business strategy
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February 22, 2011

Social Business Strategy
by Nigel Fenwick for CIOs

Making Leaders Successful Every Day

For CIOs

Social Business Strategy

February 22, 2011

an Empowered report: rethink your Enterprise approach to Social technology
by Nigel Fenwick with Sharyn leaver, luca S. Paderni, and lauren Blackburn

ExECut I v E S u m ma ry
Business as we know it is changing. The next generation of market-leading organizations will digitize their enterprise model with new capabilities enabled by social technologies. But many of today’s social technology initiatives fall well short of their transformational potential. Smart business and technology leaders will rethink business strategy to create a “social business strategy” — moving beyond linear, process-driven organizations to create new, dynamic, networked businesses. These new organizations will be capable of empowering and connecting people in new ways to create value in the marketplace. They will change the way companies compete and set new standards for how governments and nonprofits deliver value.

taBl E O F CO N tE NtS
2 Islands Of Social Technology Miss Their Transformational Potential 3 Develop An Enterprise Social Business Strategy Step 1 — People: assess the Social maturity and Needs Of Employees and Customers Step 2 — Objectives: review Business Objectives Step 3 — Strategy: Formulate a ScenarioBased Social Business Strategy Step 4 — technology: Select the appropriate Social technology architecture
rECOmmENdatIONS

N Ot E S & rE S O u rCE S
Forrester interviewed vendor and user companies, including Bryan Cave, Cisco Systems, GHy International, Inforonics, university of Kentucky, uS department of State, and uSt Global.

Related Research Documents “Beyond alignment: Bt Strategic Planning” december 31, 2010
“CIOs: Support HErOes — Create Social Innovation Networks using the PaCt Framework” November 22, 2010 “Welcome to the Empowered Era” November 1, 2010 “the HErO Index: Finding Empowered Employees” June 18, 2010 “use Social Computing to Boost It Productivity” June 15, 2010 “the CIO’s Guide to Social Computing leadership” march 31, 2010

11 Start By Broadening Awareness — And Clearing Up Misconceptions 11 Supplemental Material

© 2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please email clientsupport@ forrester.com. For additional reproduction and usage information, see Forrester’s Citation Policy located at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

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ISlANDS OF SOCIAl TEChNOlOgy MISS ThEIR TRANSFORMATIONAl POTENTIAl Social technology success stories abound (see Figure 1). In some cases, the CMO is leading social initiatives; in others, the CIO is stepping into a leadership role. And as a reaction to social initiatives, proactive leaders develop social media policies aimed at empowering employees to use social technologies to solve customer challenges.1 While each isolated approach to using social technologies to solve a customer or business challenge may be successful, when taken as a whole, these tactical solutions fail to capitalize on the full potential of social technologies to transform business strategy.2 Instead, they create isolated pockets of technology — many of which IT doesn’t even know about — that result in:3

· Untapped data. Social applications collect important data about customers, employees,

and suppliers. As isolated systems, this data is not available to other applications across the enterprise. At best, this leads to duplication of data, or worse, it results in lost opportunities to create greater customer value.

· Inability to scale. Early pilots focus on testing functionality and proving concepts but

frequently fail to plan for running at enterprise scale. Performance of these pilots can drop off dramatically as they become more popular, resulting in dissatisfaction and abandonment by pilot early adopters. Unless solutions can be scaled for the enterprise, the eventual result can be failure, even though the application held the promise of high customer or employee value.4

· Dismal adoption. Employee-driven, limited-scope pilot schemes focus on a subset of customers

or employees — but these pilots can fail to achieve the expected results simply because their scope was too limited, resulting in low adoption rates.5 As a result, executives consider the pilot a failure, rather than considering whether the strategy to use a pilot was the root cause of the failure.6

· Noncompliance penalties. No matter what the industry, IT must help ensure the organization

complies with government and industry regulations. Many such regulations govern the storage, transfer, and publication of information across the enterprise (as in the case of eDiscovery), or they govern publicly disclosed information (such as patient information in healthcare). Where employees adopt social technologies as “pilot” programs — a code word for clandestine in many cases — they may be exposing the organization to the risk of heavy fines and penalties for regulatory noncompliance.7

· Gaping security holes. Social technologies are on the frontlines of the battle against cybercrime —
many organized crime groups are targeting social technologies as a way to get past corporate firewalls.8 Without adequate security provisions, isolated pockets of social technology expose the entire enterprise to the potentially devastating effects of a security breach.9

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· Overspending. Complexity, too much heterogeneity, and duplication of systems make

technology more expensive. Complex integration across systems results in highly customized applications and higher maintenance costs than with homogeneous applications.10 And contracts negotiated without central vendor coordination can result in suboptimal pricing because volume discount opportunities are easily overlooked.

Figure 1 Social technology Initiatives arise From multiple Sources
Example source of initiative PR Customer service Marketing Division X Division Y R&D IT HR HERO Example initiative Blog Twitter Facebook Online customer community Product feedback and ratings Ideation Collaboration platform Recruiting Electronic water cooler Example objective Improve customer and investor communications to in uence buying behavior Initiate faster response to customer di culties and improve customer support to increase customer satisfaction levels and improve brand loyalty Customer engagement to drive brand loyalty and evangelism Increase sales by engaging with potential customers through an online community, helping them answer product questions Encourage customers to provide feedback and product ratings through online sales channels Simple idea tracking system that allows employees to submit suggestions on how to improve products Increase productivity by allowing employees to easily share information and stored content Reduce hiring costs by using social networks to source talent Yammer social network started by an employee to allow employees to chat via microblog messages; growth in adoption across the organization
Source: Forrester Research, Inc.

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DEvElOP AN ENTERPRISE SOCIAl BUSINESS STRATEgy To capitalize on the transformational and competitive potential of social technologies across the enterprise, the CEO and his/her leadership team must rethink business strategy in a world transformed by social technologies. Yesterday’s strategies built around market needs are outdated in today’s empowered business world. Dynamic, flatter organizations built around social connections that focus on solving business and customer challenges are replacing old hierarchical organizations. In these new social organizations, employees are adapting technology used at home to help solve these challenges — Forrester calls these employees HEROes (highly empowered and resourceful operatives).11 And customers depend on key influencers in their social network in order to make buying decisions.12

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CIOs must partner with the CMO to help the executive team rethink business strategy and create a social business strategy.13 A social business strategy is a people-based strategy aimed at meeting business objectives by changing the way in which networked people communicate about, and derive value from, products and services.14 To get started and set your firm up for success:

· Empower a social business strategy council. Neither the CMO nor the CIO owns social

business strategy — instead the entire executive team must own it. The CEO should charter a social business strategy council made up of business leaders and managers from across the enterprise, representing every business unit, geography, and functional area, including IT, marketing, HR, and legal. This council’s primary responsibility is to help formulate the social business strategy and to meet regularly to manage and govern the social business strategy implementation across the organization.15

· Engineer your “aha” moment. Many of the examples from our research suggest that the senior

leadership at an organization arrives at an “aha” moment — the moment when they first realize the full potential of social technologies to transform their business. Executive summits are a common venue for these aha moments — allowing leaders from across the organization to share ideas and experiences while broadening their understanding of how other companies are adapting social technologies. Engineer your company’s own “aha” moment by bringing together executives to explore how social technologies are transforming other organizations and begin to think differently about what’s possible in your organization through social business strategy.16

Once the right C-level team is on board, the social business strategy council should follow the POST sequence (people, objectives, strategy, technology) to frame the social business strategy.17 Step 1 — People: Assess The Social Maturity And Needs Of Employees And Customers Based on our research to date, one of the biggest obstacles to success with social technologies is underestimating the people factor. This is perhaps surprising since social by definition pertains to people. Without a thorough understanding of the expectations and experience of the workforce and the customer, it is difficult to develop an effective strategy. For this reason, we recommend starting with an assessment of the people — employees, customers, and suppliers — and the social tools they already use at work.

· Measure your employee HERO Index. Your employees are exposed to technologies ranging

from Facebook to iPhones — the creative ones among them are imagining how they can use those technologies to help customers. The question is: Is your company set up so they can act on that creative impulse? To assess organizations’ readiness to support HEROes, we use surveys to measure their information workers on two dimensions: empowerment and resourcefulness (see Figure 2).18 You can also benchmark your employee base against our Workforce Technographics® data to evaluate how far along each segment of your workforce is in social technology adoption.19

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· Understand how social your customers are. Between 2007 and 2010, the number of online

consumers using social networking sites more than doubled — with an estimated 62 million online adults in the US visiting a social networking site at least monthly.20 Forrester has developed a social demographic survey method called Social Technographics® to help you understand how your customers (by geography, industry, and even brand) are adapting social technologies to their lives. A clear understanding of you customers’ use of social technologies yields potential insights into how to engage with them to create value (see Figure 3).

Figure 2 the HErO Index divides Employees Based On their Empowerment
The HERO Index (All information workers) Rogue Employees HERO Employees

13% Act more resourceful 34%

20%

34%

Disenfranchised Employees

Locked-Down Employees

Feel more empowered Base: 4,364 US information workers (excludes sole proprietorships) Source: North American Technographics® Empowerment Online Survey, Q4 2009 (US)
57541 Source: Forrester Research, Inc.

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Figure 3 Social Networking usage more than doubled Between 2007 and 2010
“Which of the following online activities do you do at least monthly?” Millions of adults (2010) 92% 163 92% 37% 60% 107 86

Use email Purchase products Send or receive photos by email†

49% 44% 15% 18% 35% 33% 33% 31% 24% 17% 18% 13% 2010 2007*

Visit social networking sites‡ Watch Internet video/streaming video Use instant messaging Listen to Internet radio/streaming audio Read blogs

62 58 58 42 31

Base: 29,295 US online adults *Base: 28,771 US online adults (multiple responses accepted) Source: North American Technographics® Benchmark Survey, Q2 2010 (US, Canada) *Source: North American Technographics Benchmark Survey, 2007 † Asked as two separate questions in 2007 ‡ Asked as “use social networking sites” in 2007
57541 Source: Forrester Research, Inc.

Step 2 — Objectives: Review Business Objectives Social business strategy must focus on helping the organization achieve its goals and objectives. Start with the high-level business objectives for the organization, for example “grow sales by x% a year” or “increase repeat customer business by y%.” Each objective has one or more strategies associated with it, describing how to achieve the objective. Review each objective-strategy combination in light of emerging social technology trends to create strategy scenarios, describing how social technologies can support, enhance, or even replace the strategy.

· Develop social capability maps. Use business capability maps to identify the capabilities

needed by the enterprise to achieve its goals and objectives and create value for the customer.21

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Layer social capabilities onto the business capabilities to show how social technologies support the business (see Figure 4).

· Develop strategic scenarios. Scenarios help unearth how social technologies support or enable
the capabilities. Develop each scenario to assess the technology gap associated with delivering the scenario, the associated costs and risk assessments, and potential return on investment (ROI). Use multidisciplined teams build out social business strategy options from the scenarios and review how social technologies support or enable existing/new business capabilities.

Figure 4 map Social Capabilities to Business Capabilities
High-level business capability map Direct-toconsumer sales Consumer parts and services Distribution channel management Customer support Customer-facing capabilities Supply chain capabilities Corporate capabilities • Rough technology gap assessment • Scenario cost estimates • Technical feasibility assessment • Risk assessment • Complexity/ timescale assessment • ROI

Logistics Product research and development

Vendor management Brand management

Production quality Talent acquisition

Inventory optimization Finance

Demand forecasting Technology innovation

Social capabilities Examples: • Ideation process • Customer innovation

Map social scenarios

Examples: • Employees submit new ideas using ideation tracking software. • Idea jams are used to focus employees on a problem; the jams use a community discussion board to encourage participation. • Employees post suggestions to an idea wiki where others can add their own thoughts. • Specific R&D challenges are published to a customer innovation site where people can make suggestions.

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Source: Forrester Research, Inc.

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Step 3 — Strategy: Formulate A Scenario-Based Social Business Strategy Having developed the various scenarios, it is likely that some scenarios will float to the top as having the greatest output (impact on achieving objectives) for the least input (risk, investment, effort, and complexity) (see Figure 5). The social business strategy council should:

· Support operational social initiatives. Low-input projects, which require little or no upfront

investment, have little impact on the business objectives, but have operational advantages, should be supported by business units as needed — but these are not strategic social initiatives. For example, the recruiting team wants to set up a team collaboration website using existing SharePoint services in order to collaborate on reviewing job applicants. The initiative makes sense to support from an operational perspective, but don’t expect big strategic payoffs.

· Pilot high-impact scenarios requiring high input. These initiatives will have a large impact on
the business objectives, but because of their cost and complexity, it can take a long time to see the benefits. Piloting these initiatives allows the organization to minimize risk while learning how to maximize the returns against business objectives. For example, integrating multiple social message streams into the customer service and relationship management functions will require sophisticated message routing technology, coupled with auditing and recording for regulatory compliance, all integrated into a unified communications environment. That’s a big investment — but it is ripe with big-time opportunity.

· Invest in no-brainers. Scenarios that have small inputs in terms of risk, complexity, effort, and
cost and that have a big impact on business objectives are “no-brainers.” They should definitely be supported — many are likely already under way. These scenarios should be fast-tracked and used to highlight early successes from the strategy. An example is a national retail brand using Facebook to engage with customers and provide loyal customers with advance news of upcoming events and new merchandise. This type of low-risk, table-stakes initiative should get under way immediately.

· Steer clear of quagmires. Avoid any scenario with high input and little return in terms of

output. If such a scenario is required (such as table stakes required to remain competitive), be sure to exhaust all alternative scenarios that could yield similar outputs but with lower inputs. For example, a new proprietary Facebook-like community, which must be developed in-house due to privacy and security concerns but which is expected to integrate customers and suppliers with employees, sounds interesting. But with no clearly defined success metrics or identifiable business outcomes, this type of initiative should stay off the drawing board.

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Figure 5 Social Business Strategy Scenario matrix
High

Invest

Pilot

Outputs: impact on business objectives

Support

Quagmire

Low Inputs: risk, cost, e ort, and complexity
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High

Source: Forrester Research, Inc.

Step 4 — Technology: Select The Appropriate Social Technology Architecture Having worked through steps 1, 2, and 3, the optimum mix of technology choices is likely to be much clearer. However, the array of technology choices already available to business managers through cloud service providers is growing daily. IT must mirror the technology market and provide business managers with an array of services to support the social business strategy. These services can include options to source technology services from software-as-a-service (SaaS) and cloudbased vendors, with IT providing the needed consulting expertise to ensure the services tie into the technology architecture. Instead of IT being the bottleneck to adoption, IT becomes the enabler of business transformation:

· Consider a platform approach to social. A best-of-breed solution may deliver the functionality
needed by one part of the business, but will it allow for expansion into other parts of the business with differing needs and outcomes driving success? Consider the value of investing in a platform that allows social functionality to be bolted onto existing applications architecture, such as IBM Lotus Connections or using NewsGator with Microsoft SharePoint, versus a bestof-breed platform such as Jive’s collaboration architecture, which is designed to function as a standalone social application. While a best-of-breed platform may be the ideal solution for

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client-facing, marketing-driven scenarios that depend heavily upon vendor expertise to meet the expected business outcomes, in a scenario where a social collaboration platform is needed and Microsoft Exchange is already widely deployed, adopting Microsoft Exchange 2010 may offer greater flexibility and lower complexity.22

· Design for integration. Regardless of platform choice, social technology solutions need to be

designed to integrate with existing corporate systems. Communications via social channels may need to migrate to traditional modes of communication — and vice versa. For example, CRM applications integrate a customer’s social stream in order to better serve and support customers over time. Other forms of enterprisewide collaboration through social technologies may need to be integrated into existing email communications to improve accessibility — thus, social technology may become part of a unified communications architecture. As such, embarking on developing a social business strategy requires that applications are designed for integration from the outset. Enterprise architects have an important role to play in helping the organization develop a social technology architecture that provides the needed flexibility to cope with rapid technology evolution.

· Favor SaaS solutions with on-premises options. Many social platforms are now available

as cloud-based software-as-a-service (or hosted applications solutions). IT can explore the potential of cloud-based architectures by offering up pay-as-you-go social applications to the enterprise, especially for scenarios requiring little application integration in the early pilot stages. But will they scale? Some cloud-based platforms easily convert to an on-premises platform at a later date, after the business case is proven and the outcomes known. These offerings will provide more flexibility in the long run, which will be important as you scale.

· Seek outcome-based vendor partnerships. Although the established social technology vendors —
such as Jive, Lithium, and Telligent — will enter negotiations with established pricing models, other social vendors and tools are still emerging, and pricing models may change rapidly or vary from company to company. Understanding differences between pricing models — such as “freemium,” pay-per-view, and per-month licensing — is an essential part of a smart negotiation strategy and a critical factor as the technology scales.23 Forrester has also seen an increase in sourcing and vendor management teams negotiating outcome-based vendor agreements as a means to get the vendor’s skin in the game. Sharing with vendors the overall business goals of the strategy and tasking them to come up with an outcome-based licensing approach is a powerful incentive for all parties to work together toward eventual success.24

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r E C O m m E N d at I O N S

START By BROADENINg AwARENESS — AND ClEARINg UP MISCONCEPTIONS
With so much hype surrounding social technologies, it’s likely the C-suite already has misconceptions. Work with the CmO to provide executives with case studies to illustrate how other organizations are already taking advantage of social technology to increase customer value and/or profitability. Share copies of the best business books on the subject.25 run a series of programs aimed at broadening awareness and stimulating discussion:

· Run a social business strategy workshop. Workshops are an effective way to bring focus
to the important issues for your organization. It’s easy to tailor the length of the workshop to the availability of executives’ calendars. a good workshop model balances education with team breakouts aimed at stimulating discussion.

· Invite vendors in for a social technology expo. Social technology vendors are probably
already soliciting your business units trying to explore opportunities — turn this around and invite a number of leading vendors to participate in an It-sponsored social technology expo. Have them focus on showing how they are already helping their clients in your industry leverage social technologies to deliver business outcomes.

· Attend social technology events. as an educator, it’s important for you to be well-informed.
attending a select number of conferences will help broaden your awareness of what is possible as well as the challenges your organization will face.

· Setup an executive sandbox. there is nothing quite like hands-on experience to
understand social technologies. develop a sandbox experience designed to introduce executives to social tools in a way that helps them better understand the tools’ potential. For example, an executive sandbox might include an exclusive yammer group so that execs can share what’s happening, or it could be an executive wiki like the one used by united Business media to socialize the idea of sharing expertise.26

SUPPlEMENTAl MATERIAl Methodology Forrester conducted an online survey in April 2009 of 4,364 US information workers ages 18 to 88 using a computer or terminal in their job. For results based on a randomly chosen sample of this size (N = 4,364), there is 95% confidence that the results have a statistical precision of plus or minus 1.5% of what they would be if the entire population of US online information workers ages 18 and older had been surveyed. Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The sample was drawn from members of MarketTools’ online panel, and respondents were motivated

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by a sweepstakes drawing. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. In addition to sampling error, one should bear in mind that the practical difficulties in conducting surveys can introduce error or bias into the finding of opinion polls. Other possible sources of error in polls are probably more serious than theoretical calculations of sampling error. These other potential sources of error include question wording, question ordering, and nonresponse. As with all survey research, it is impossible to quantify the errors that may result from these factors without an experimental control group, so we strongly caution against using the words “margin of error” in reporting any survey data. These statements conform to the principles of disclosure of the National Council on Public Polls. Forrester fielded the North American Technographics Benchmark Survey, Q2 2010 (US, Canada) in February and March 2010 to 42,792 US and Canadian households and individuals ages 18 and older. For results based on a randomly chosen sample of this size (N = 42,792), there is 95% confidence that the results have a statistical precision of plus or minus 0.5% of what they would be if the entire population of North American households and individuals ages 18 and older had been surveyed. Forrester weighted the US head of household data by age, gender, household income, household size and composition, education level, region, and market size (combined statistical area). The weighting criteria for the US individual respondent data included all of the above with the addition of employment status. The survey sample size, when weighted, was 34,866 North American respondents at the household level and 42,785 North American respondents at the individual level. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in mail panels.) The sample was drawn from members of TNS’s panel, and respondents were motivated by a sweepstakes drawing. The sample provided by TNS is not a random sample. While individuals may have been randomly sampled from TNS’s panel for this particular survey, they have previously chosen to take part in the TNS panel. Companies Interviewed For This Document In addition to the survey data used in this research, we conducted a number of qualitative research interviews. Companies in these interviews include: APAN Apple Leisure Group Bryan Cave Cisco Systems GHY International Government of Ontario Hewlett-Packard Inforonics Intuit Starbucks

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United Business Media University of Kentucky US Department of State ENDNOTES
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UST Global Vistaprint

An effective social media policy provides an essential guide for employees with respect to their use of social media, whether they are engaging for personal reasons or business reasons. Research shows that employees using social media do read the organization’s social media policy when one is available. See the April 21, 2010, “The CIO’s Guide To Establishing A Social Media Policy” report. To succeed in an era of empowered customers, you must empower employees to solve customer and business problems. First, build bridges to your marketing and customer service teams to help these teams scale up new customer solutions. Then give employees the safety net and permission to be your greatest source of innovation and breakthrough ideas. See the November 1, 2010, “Welcome To The Empowered Era” report. Forrester’s North American Technographics Empowerment Online Survey, Q4 2009 (US) showed 37% of US information workers either used unsanctioned login-required websites at work, or downloaded applications onto a work computer, or used their own smartphone to help at work. While employee-driven initiatives are well-intentioned, they often result in the need for a more robust IT architecture to scale beyond the initial groundswell. For example, Best Buy’s Blue Shirt Nation employee collaboration community was highlighted in Groundswell as a success. After a strong start as a groundswell technology, Best Buy eventually had to shut down Blue Shirt Nation because it was unable to scale and garner adoption from senior managers. Best Buy learned from its experience, however, and successfully launched a similar employee network built around SharePoint to deliver the scalable architecture linked to email that Best Buy needed. Best Buy’s Blue Shirt Nation project was cited as an example of a groundswell initiative that was transformative for Best Buy’s retail operations. This initiative helped the organization realize the full potential of collaborative technologies to transform the employee and customer experience. Source: Charlene Li and Josh Bernoff, Groundswell: Winning in a World Transformed by Social Technologies, Harvard Business Press, 2008 Source: Nigel Fenwick, “Should You Pilot Enterprise Communities? Three Tips for Success,” Nigel Fenwick’s Blog For Chief Information Officers, April 28, 2010 (http://blogs.forrester.com/nigel_fenwick/10-04-28should_you_pilot_enterprise_communities_three_tips_success). In the United Business Media case study, the first attempt at an enterprisewide collaboration platform failed. Fortunately, the CEO could see the value of getting it right and learning from the team’s mistakes, so rather than viewing the attempt as a waste of time and money, they viewed it as a learning process to help ensure success with their second attempt. See the March 16, 2010, “Case Study: United Business Media Taps Social Computing To Boost Collaboration And Savings” report. The Cleveland Clinic was not the first healthcare firm to experiment in social media, but it achieved success where others failed. A pragmatic assessment of the barriers it faced in developing social media strategy and

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governance as well as an incremental plan to develop a centralized social media marketing organization helped Cleveland Clinic make steady progress. By structuring a cross-functional team to enable education, collaboration, and smart governance, Cleveland Clinic has deepened engagement with its consumers around the globe, begun to realize the business benefits of social media, and optimized the marketing organization to adapt to new media. See the December 17, 2010, “Case Study: Cleveland Clinic Takes A Stepladder Approach To Achieve Social Media Success” report.
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The information security threat landscape is changing rapidly, and many security organizations are struggling to keep up with the changing nature, complexity, and scale of attacks. Not only is it important for security managers to keep up with this changing landscape and develop capabilities to handle this new paradigm, but it is also essential to learn from past mistakes. Security managers must devise new ways to maximize the impact of their security controls, minimize risk, and efficiently deploy technology investments. See the August 13, 2010, “The New Threat Landscape: Proceed With Caution” report. Trying to determine the cost of a data breach is no easy task. After calculating the expenses of legal fees, call centers, lost employee productivity, regulatory fines, stock plummets, and customer losses, it can be dizzying, if not impossible, to come up with a true number. In reality, there are many different factors that should be part of the data breach cost calculation — and it’s more than just losing money. Although studies may not be able to determine the exact cost of a security breach in your organization, the loss of sensitive data can have a crippling impact on an organization’s bottom line, especially if it is ill-prepared, and it’s important to be able to make an educated estimate of its cost. See the April 10, 2007, “Calculating The Cost Of A Security Breach” report. Few firms get to really design their infrastructure architecture with a blank sheet of paper. Your technology architecture is most likely the product of many years of evolution — old platforms being replaced by newer ones and years of cumulative changes and updates to keep your applications going. At some point, this accidental architecture becomes too expensive and unwieldy to manage, ultimately making your firm less competitive in the marketplace. See the January 8, 2010, “Assessing Your IT Infrastructure Architecture” report. In 2010, Forrester published Empowered, by Forrester analysts Josh Bernoff and Ted Schadler, through Harvard Business Review Press to help business leaders understand how business is changing in a world in which customers and employees are empowered through readily available social technologies. To succeed in an era of empowered customers, you must empower employees to solve customer and business problems. Source: Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, Transform Your Business, Harvard Business Review Press, 2010 (http://www.forrester.com/empowered). Fans and followers are helpful for brands, but the people who bring the greatest value in social media are not just fans but advocates — people who can and will support, engage, and share information from and about the brand. But not all advocates are created equal. The best advocates are Mass Influencers who create the majority of influence impressions, and posts for a brand or within a category. See the September 29, 2010, “Three Ways To Find, Create, And Energize Advocates” report. CIOs have an opportunity to take a leadership role in how social will deliver competitive advantage for their organizations beyond creative marketing campaigns. The CMO brings the customer perspective and the CIO the enterprise perspective to help the leadership team develop a new business strategy enabled by

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social technologies. Our report on Social Computing leadership suggests that CIOs take a leadership role in helping the organization adopt social technologies to solve business and customer challenges. See the March 31, 2010, “The CIO’s Guide To Social Computing Leadership” report.
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Recent academic research highlights a service-dominant logic where value is created through a balanced centricity between producer and consumer. For example, although a product such as a TV has a market value, (the price paid for it at retail and realized by the producer when the TV is sold), the value from the customer’s perspective isn’t realized until the TV is used over a period of time. If the TV breaks down after 30 days, it has a significantly diminished value. If a new replacement TV is sent out the same day that the customer notifies the supplier, the perceived value is greatly increased. However, if the customer experiences trouble in getting a replacement, the value is likely to go negative. No matter what the product or service, it is the people in the market, and their entire experience with the products and services, that determine the true market value. Source: Evert Gummesson, “Extending the service-dominant logic: from customer centricity to balanced centricity,” Journal of the Academy of Marketing Science, 2008. Manish Mehta manages the social strategy council at Dell. This cross-organizational team includes business managers from every product group and geography and functional area, including IT, HR, and legal. The council meets weekly for 90 minutes to manage and govern social strategy across the organization. See the November 1, 2010, “Welcome To The Empowered Era” report. Many of the firms featured in Empowered had an “aha” moment that kicked off their whole-company response. Executives from different departments came together at Aflac, Dell, PTC, Sun Life Financial, and Vail Resorts to plot their empowered strategies. Source: Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, Transform Your Business, Harvard Business Review Press, 2010 (http://www.forrester.com/empowered). Forrester invented the POST methodology to help interactive marketers implement successful social strategies. These four steps were also applied to help CIOs think through the introduction of social technologies to the enterprise, and they are perfectly aligned with the steps in developing a social business strategy. See the October 9, 2007, “Objectives: The Key To Creating A Social Strategy” report, and see the March 31, 2010, “The CIO’s Guide To Social Computing Leadership” report. The report “The HERO Index: Finding Empowered Employees,” by Ted Schadler and Josh Bernoff, explains how to use the HERO Index to assess your organization’s readiness for social business strategy. The index classifies workers into four groups: 1) Disenfranchised Employees — workers who don’t use unauthorized applications and don’t feel empowered to solve problems; 2) Rogue Employees — employees who run unauthorized applications even though their company doesn’t support their efforts to solve customer problems with technology; these unsupported efforts are unlikely to contribute to the company’s useful work unless the company changes to support them; 3) Locked-Down Employees — this group is the largest and is full of people who want to solve customer problems but are blocked by corporate technology lockdown; and 4) HERO Employees — workers who are using new technologies and know the company wants them to help customers. All of the end user innovators we’ve encountered come from the HERO quadrant. See the June 18, 2010, “The HERO Index: Finding Empowered Employees” report.

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A properly constructed and conducted survey replaces guesses with data and provides facts on technology adoption, importance, and gaps. With data in hand, the conversation can quickly move from arguing about what is to collaborating on what can be done. See the September 27, 2010, “A Fact-Based Approach To Workforce Technology Needs Assessment” report. For the first time ever, the average US online consumer spends as much time online as he or she does watching TV offline. Trending data from 2007 shows that while consumers are continuing to expand their online behaviors, they are more selective about what they’re doing online. Many behaviors are limited to a select group of users. But as consumers are streamlining their behaviors on the “traditional” Net, they are also increasingly expanding their activities to the mobile Internet. See the December 13, 2010, “Understanding The Changing Needs Of The US Online Consumer, 2010” report. In a new era of innovation and fluidity, Forrester believes that business capabilities provide a new and better foundation for technology strategy. See the September 23, 2010, “Establish Business Capabilities As The Foundation Of Your Technology Strategy” report. Selecting an enterprise applications vendor is a systematic process of elimination. A variety of tools are available to bring about a sound decision, but tradeoffs often occur between the level of diligence and the length of the decision process. See the July 20, 2007, “Application Vendor Selection: Making The Process Work For You” report. Recent Forrester data about the role of social technology in the enterprise confirms what many business professionals already suspect: More people are using social technologies, and these technologies are being used in diverse business applications. But even as the use of social technologies grows, far too many sourcing and vendor management (SVM) professionals seem content to sit on the sidelines — letting individual social tools’ usage grow organically within the company, with minimal regard for long-term sourcing considerations. SVM professionals who want to play a more proactive role in their business — and contribute to more cutting-edge business innovation — need to find ways to support social technology initiatives while also protecting long-term company interests. See the September 27, 2010, “Five Ways SVM Enables Social While Protecting The Company’s Interests” report. Sourcing executives want to get high ROI out of technology investments and increasingly look to outputbased pricing models as a way to align service provider payment with internal goals. Despite challenges ranging from internal organization hurdles, to crafting the contract and agreeing on fair payment drivers, to finding the right provider, firms can reap significant rewards and eliminate project challenges through the use of business outcome-based pricing models. See the April 9, 2010, “Business Outcome-Based Pricing Models Drive Results In Packaged Application Implementations” report. Suggested titles include: Charlene Li and Josh Bernoff, Groundswell: Winning in a World Transformed by Social Technologies, Harvard Business Press, 2008; Andrew McAfee, Enterprise 2.0, Harvard Business Press, 2009; and Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, Transform Your Business, Harvard Business Review Press, 2010 (http://www.forrester.com/empowered). United Business Media started down the path toward becoming a highly collaborative organization by bringing its executives together using wiki technology to share information, experience, and comments on an executive offsite. See the March 16, 2010, “Case Study: United Business Media Taps Social Computing To Boost Collaboration And Savings” report.
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