Why ‘Facebook For The Enterprise’ Vendors Are Wrong
Comprehending the difference between “social media” and what is becoming known as “social business” or “Enterprise 2.0” can be challenging. Even successful consulting firms and marketing agencies are confused. I’m excited to see this article in Forbes magazine from our friend Christopher Lochhead, chief strategy advisor and board member at Jive Software. It will help provide some clarity. [ Disclaimer: My company, C7 Group is a management consulting firm helping business with social business strategy and integration.] This article was also re-posted at C7Group.
Why ‘Facebook For The Enterprise’ Vendors Are Wrong by Christpher Lochhead
Have you noticed how many software vendors are claiming to be “Facebook for the enterprise”? These vendors are making a huge mistake. Don’t be fooled.
Let’s be clear. This commentary has nothing to do with Facebook. It has everything to do with the business application companies ripping them off. I think Facebook itself is great.
That said, let’s talk about why copying Facebook is a dumb idea for enterprise application vendors.
1. It’s about the business, stupid.
People at work have to get work done. They need a social platform that increases productivity and engages customers and employees. “Facebook for the enterprise” vendors are confused. They focus on “sharing” only. And when vendors are confused about the purpose of their products, they are doomed. By stealing the product strategy of a consumer service, these vendors have built social networks that can actually decrease business productivity.
Think about it. The average Facebook user has 130 friends, with maybe 20-30% actively generating content. In an enterprise, there are thousands of co-workers generating information on a daily basis. Cutting through the chatter to get to what matters becomes critical.
Status updates aren’t enough. Social business platforms must create an “enterprise social graph” for employees, vendors, partners, customers and others on the social Web. The graph needs to include critical projects, intellectual capital and relationships in a “personal view” so that it acknowledges each kind of relationship.
One size will not fit all. The variations in how people work often create competitive advantage. The secret is in the ability to mold the social business platform to empower employees to produce material breakthroughs.
To drive a breakthrough in the way work gets done, social business networks require the ability to manage groups, projects, tasks, documents and discussions. Connecting to back-end systems to integrate existing enterprise data into the workflow becomes critical.
“Facebook for the enterprise” vendors do very little of this.
2. Ripping off Facebook is NOT a strategy.
Did SAP become the leader in ERP by claiming to be “QuickBooks for the enterprise”? Did Larry Ellison say he was “dBase for the enterprise”? (Remember Ashton-Tate?) Of course they didn’t.
While there are important elements of consumer applications that enterprise vendors must embrace, no vendor has ever built a successful enterprise application by stealing a consumer app strategy.
“Facebook for the enterprise” vendors are idea bankrupt. They don’t have a product strategy so they are knocking-off Facebook’s.
3. Consumer social networks alone are not a Social Business strategy.
Businesses that are driving new revenue, cost structures and innovation with social business technology recognize that they need to engage with their customers on Facebook, Twitter and LinkedIn. A seminal part of the equation is a community that’s purpose-built by the company for its customers. It’s the primary way to drive an increase in sales through social commerce and a decrease in customer service costs by enabling community support.
Social Business also requires an apps market where small foot print, high-value business applications can be socially driven. Making apps easily available and consumable by employees will change the game. Consumer-like, mass-customization will drive the next big breakthrough in enterprise productivity.
“Facebook for the enterprise” vendors don’t understand this. They generally provide simple social features like micro-blogging or wikis and call it a day. Almost none has an apps market.
4. Employee collaboration requires enterprise controls.
Ask your CEO how she feels about her employees communicating, sharing documents and creating content on a public network. The stringent requirements for compliance and eDiscovery due to regulations like Sarbanes-Oxley fly in the face of blanket openness. Integration with compliance, storage and monitoring systems is a must. Missteps have huge ramifications. Employee collaboration must take place within an environment that has real enterprise controls built into the Social Business platform.
Most “Facebook for the enterprise” vendors are small startups. Does uploading critical information on to the servers of a 20-person company sound smart?
5. “Freemium” apps are like a “free puppy.”
Free enterprise apps are akin to a “free puppy.” While the product itself may be technically free, enterprises ultimately end up incurring real costs for any meaningful technology they use. Whether they pay license fees or service and support fees, there is no such thing as a free app.
“Facebook for the enterprise” providers seem to have forgotten that companies need to make money or they go out of business. They’ve forgotten the lessons of Web 1.0. Companies need revenue and profits to live.
As you continue on the road to building a social business, be smart about the vendors you choose. Those who are outsourcing their product strategy to Facebook will fail. Don’t let them take you down with them.