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For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Was Web 2.0 Ever Alive…

Posted by Bob Warfield on October 22, 2008

My Enterprise Irregular colleague Dennis Howlett, via a guest post on Chris Brogan’s Blog, has taken up the refrain of my earlier post, “Is Enterprise 2.0 a Real Trend, or a Bubble That Has Burst?”  There’s quite a lively discussion going on since Tim O’Reilly weighed in with a comment calling Dennis’ post, “shockingly ignorant of what Web 2.0 is really all about.”  As I read the post, it seems to me that largely what Dennis bemoans is the lack of progress, tangible change, and broad adoption of E2.0 with business.  He argues there are three issues holding us back. 

First is that there is too much focus on sales and marketing and too little focus on broader collaboration.  There are a lot of folks that are tired of the hype around E2.0, even to the point where some Enterprise Irregulars and others want to simply eliminate some of the terminology such as the “Social” and “2.0” mantras.

Second is the problem of building communitis.  It isn’t easy, due in large part to what I call the “Rule of 10’s” which is properly attributed to Jakob Nielsen.  While it’s true that it isn’t easy, the numbers don’t make it any harder than most worthwile business activities.  You need a community of a few thousand before it becomes self-sustaining.  Until that time, the community will need some “priming of the pump” by it’s creators to ensure there is enough activity to make it interesting.  When was the last time that a business effort mattered that didn’t touch a couple of thousand customers?

The last one is a desire to have the E2.0 efforts produce hard ROI.  This has been a bit of a Holy Grail that hasn’t produced many results so far.  However, I think a lot of that has to do with how E2.0 has been approached.  Most of the tools being used are broad horizontal offerings.  Just deploying forums ala Jive or Lithium will add value, but unless they solve a specific business problem, it will be hard to derive an ROI.  In fact, I will go a step further.  The software itself has to be constructed in such a way that the ROI from social interaction is obvious and measurable.

That last is a bold statement, but very doable.  I’ll talk more about how it’s done in another post, but I think it is a crucially important concept.  One obvious way to do it is to combine Social Media with an existing business process that has measurable results.  This requires a seamless integration if it’s going to perform well, but the potential rewards are great. 

This is essentially what we do at my company, Helpstream.  We have combined traditional customer service tools like case management (ala Remedy) and knowledge bases with modern community capabilities.  This is done is a way that’s measurable because we can tell exactly how many of your customers have their issues resolved via the knowledge base versus the community versus case management.  That’s the virtue of seamless integration as you not only have a more natural user interaction, but you also can see actually what the value being created might be in hard ROI terms.

We just launched our service at the beginning of the year, but already the hard ROI results we’ve measured are pretty startling.  We’re working on a 2nd generation user interaction model that should increase those results further based on what we’ve already learned.  Stay tuned for more on this soon!

Before leaving this topic, I want to make sure I am crystal clear about another hard ROI benefit to E2.0 besides direct improvement of efficiencies and crowdsourcing style ROI’s.  Without some sort of 2.0 functionality, something Social, you may miss an entire demographic.  As Susan Scrupski pointed out so effectively, this is how these people live.  It’s how they think.  It is their preferred channel for communication.

What is the loss of ROI in being able to reach these people when they are your customers, employees, and partners?

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