The Deloitte Center for the Edge recently issued a paper, “Social Software for Business Performance” that covers how companies can leverage social software to improve business performance in the short-term and transform it in the long-term. It states that early adopters of social software have the potential for gaining financial benefits. They can also develop skills and experience that can help build a stronger competitive position over time. It claims that social software has unique capabilities to address current operating challenges and improve operating metrics. I would agree.

To capture this value, however, companies need to more systematically assess the operating metrics that have the greatest potential and then strategically deploy social software to ensure near-term performance impact with modest investment.  Metrics, in the end, need to be business related and address bottom line issues and not simply cover areas like usage. For example, they claim that adoption metrics have not historically addressed what matters most to employees, managers or executives. As long as adoption is the primary measure of success, resistance, at all levels, will likely block successful social software deployment. I agree here also.

Companies must be strategic. Social software, applied against the problem of exception handling, can directly and measurably impact operating metrics and improve business performance.

The paper states that the current technologies (pre-social software) support standard business processes but fail to support the dynamic informal communications needed for resolving exceptions. Employees need tools that enable them to navigate organizational boundaries, connect to the right people and accelerate exception resolution.

This was the point made in McKinsey’s excellent 2005 paper The next revolution in interactions. Those authors wrote, “In today’s developed economies, the significant nuances in employment concern interactions: the searching, monitoring, and coordinating required to manage the exchange of goods and services.” They say that traditionally the focus of business and IT investments has been on production rather than interactions.

Now a new class of enterprise software has emerged to address these interactions and the recent McKinsey paper, The rise of the networked enterprise:  Web 2.0 finds its payday documents some of the financial and other benefits from social software.

The Deloitte paper closes with several excellent points. Companies must act now as those that move quickly can reap significant financial rewards and develop skills and experience that brings the potential to help them build a stronger competitive position. Skeptics will finish last. Those who operate without a strategy will be will not perform much better.

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