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© 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Table of Contents

Introducing Social Business for the Mid-Market .................................................... 4 Key Business Problems for Mid-Market Organizations .................................... 8 Social Business Is Not a Standalone Technology .............................................. 12

Secure, Compliant, and Social Business ........................................................... 14 Do Social Technologies Improve Business Outcomes? .................................. 17

Innovation and the Social Business ................................................................... 18 Customer Insight ................................................................................................... 19 Customer Engagement ......................................................................................... 19

Mid-Market Social Deployment Strategies ......................................................... 22 Mid-Market Gap Analysis: Information Management ................................... 22 Mid-Market Gap Analysis: Organizational Commitment ............................ 24 Mid-Market Gap Analysis: Tools ....................................................................... 25

Key Takeaways for Socializing the Mid-Market Business ............................... 27

Figures

Figure 1: SoMoClo: One Integrated Technology Ecosystem ........................... 12 Figure 2: Best-in-Class Value Propositions for Social Business ....................... 17 Figure 3: Mid-Sized Use of Best-in-Class Knowledge Management ............... 23 Figure 4: Mid-Sized Adoption of Organizational Capabilities ........................... 24

Tables

Table 1: Key Small and Mid-Sized Business Goals ................................................ 8 Table 2: Top Challenges for Small and Mid-Sized Businesses .......................... 10 Table 3: Key Social Technologies for Best-in-Class Performance .................. 25



February 2012

Introducing Social Business

for the Mid-Market Over the past year, Aberdeen has studied the business practices of 229 mid-sized companies (defined as those between 101 and 1,000 employees) surveyed for the 2011 Aberdeen Business Review and 61 mid-sized companies profiled in Aberdeen's 2011 Social Collaboration research. Through these studies, Aberdeen sought to discover if there were specific drivers and characteristics that made these companies more or less likely to use Social Business. Interestingly, Aberdeen found that even though mid-market companies are more likely than other organizations to identify business needs that can be solved through Social Business solutions, they are less likely to have the budget and willingness to pursue these solutions.



Mid-market organizations can achieve strategic benefits from optimizing their Social Business deployments and achieving Best-in-Class status. When we compared the top 20% of our 270 respondents in 2011 to all other companies, we found:

• 59% of these top achieving companies improved sales capabilities by improving pre-sales support, understanding the needs of the customer, and involving appropriate employees at each point of customer qualification.

• 59% of Best-in-Class companies also accelerated product development from their Social Business deployments, leading to increased revenue contributions from new products.

• 43% increased lead generation through Social Business through earned media and the ability to better understand the needs of potential customers.

This report provides directional guidance for mid-market companies to appropriately use Social Business and achieve these business goals.

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Key Business Problems for Mid-Market Organizations Mid-market organizations are often analyzed under the category of Small and Medium Businesses (SMBs), with the assumption that their business challenges and operational structures are similar to their smaller counterparts. Although this broad categorization can be helpful in describing the general characteristics of small and medium businesses, Aberdeen's recent research has focused on the different pressures and challenges that small companies (defined in this report as those with 100 or fewer employees) and mid-market organizations (up to 1,000 employees) face.

In the first half of 2011, Aberdeen surveyed 232 mid-sized companies and compared their top business goals for 2011 with the goals of 502 small companies. Small companies were focused on brand awareness and organic revenue growth to a greater extent than were all other organizations, which naturally led them to low-cost media investments such as ungoverned social media. As companies grow past the 100 headcount mark, undifferentiated organic revenue growth becomes less important, and a majority of mid-sized organizations identify profitability and margin growth as key goals. Mid-sized companies are also over three times more likely than small companies to identify cost reduction as a core business goal, revealing their focus on optimizing the businesses and creating smart growth (Table 1).

Table 1: Key Small and Mid-Sized Business Goals

Business

Goals

Mid-Sized Organization

s (n=232)

Small Organizations

(n=502)

Mid-Sized Goals

Profitability/ margin growth 53% 37%

Cost reduction 25% 6%

Small Business Goals

Organic revenue growth 55% 70%

Improve brand awareness/value 25% 47%

Source: Aberdeen Group, August 2011



Mid-sized organizations also face new challenges that small companies do not. When asked about business challenges that they identified either as "very challenging" or "this is our top challenge," four key areas stand out:

• Increased competition;

• Economic conditions;

• Improving employee engagement; and

• Ability to execute strategy.



Table 2: Top Challenges for Small and Mid-Sized Businesses

Business

Challenge

Mid-Sized Organizations

(n=232)

Small Organizations

(n=502)

Mid-Sized Challenges

Improving employee engagement 34% 17%

Ability to execute strategy 34% 26%

Small Business

Challenges

Increased competition 36% 34%

Economic conditions 34% 41%


The first two challenges, competition and the economy, are shared among all organizations. However, as organizations grow in size and geographic distribution, employee engagement and strategic execution emerge as top challenges. Mid-sized organizations are twice as likely as smaller organizations to identify employee engagement as a key challenge (Table 2).





Social Business Is Not a Standalone Technology Social and collaborative technologies support employee productivity, improve employee engagement, and keep employees focused on key corporate goals. Thus, Social Business solution deployments must be seen in the context of multiple technology trends: localization, contextualization, mobility, and cloud.

Social, Mobile, and Cloud become an integrated technology ecosystem built around the needs of the individual. To describe this integrated ecosystem, Aberdeen uses the term SoMoClo, which portrays Social, Mobile, and Cloud as a single trend (Figure 1).

Figure 1: SoMoClo: One Integrated Technology Ecosystem




• At the edge, individuals use mobile devices to interact on a localized, contextual, and job-specific basis.

• These interactions are shaped through the social channels that they use to communicate with trusted communities, organizations, and systems.

• All of this information is stored, processed, and analyzed in the cloud to provide contextualized information and guidance. Big Data and business analytics are vital tools for understanding and fully supporting a Social Business initiative.



Social technologies let individuals and organizations share information more quickly to support both innovation and collaboration. These traits have grown increasingly important as consumers become more educated, product and market cycles accelerate, and key resources are geographically dispersed.

Secure, Compliant, and Social Business The desire to share both externally with partners and customers and internally with other employees must be tempered by security and governance, risk management, and compliance (GRC) concerns. Mid-market organizations have significant room for improvement in this area.

Security and GRC efforts associated with social are complicated by the fact that social is not a standalone technology, but part of a SoMoClo environment. Social networking technologies are often hosted in the cloud, which presents enterprises with opportunities and causes for concern. This delivery method allows organizations to provide and support technologies in multiple form factors and locations. Cloud services offer more continuity for key information, processes, and collaborative environments.



As companies pursue these solutions, they must keep their own interests in mind. Sixty-one (61) mid-sized organizations provided insight on their security and GRC efforts associated with social collaboration in Aberdeen's Social Collaboration study. Less than half (46%) had secured all their social networking and collaborative technologies, and only 26% had social environments that were considered compliant with all corporate and industry standards. Although social media and networking are cutting-edge technologies in some respects, they must be treated as business tools, and subjected to the same due diligence as more traditional communications tools such as telephony and email.





Do Social Technologies Improve Business Outcomes? When Aberdeen compared the value proposition of Social Business in Best-in-Class organizations to Laggard organizations and the typical mid-market organization, we found that social applications were more wide-spread at top performers than all other companies. The top four value propositions identified by Best-in-Class organizations were associated with line-of-business responsibilities. Social Business was more likely to create value when sales, marketing, and product development departments were directly involved in improving customer awareness, customer experience, and the ability to purchase desired solutions (Figure 2).

Figure 2: Best-in-Class Value Propositions for Social Business




Innovation and the Social Business Mid-market organizations tended to be much closer to a Laggard performance than Best-in-Class performance in all of these areas. This indicates that mid-market organizations are struggling more than their smaller and larger competitors to extract value from Social Business, and are at a competitive disadvantage as a result. Closing this competitive gap could offer significant value to the mid-market and support key strategic initiatives such as disruptive and enterprise-wise innovation efforts.

Although a majority of mid-market organizations had formal innovation efforts, they tended to be incremental or operational in nature. Aberdeen found that Best-in-Class organizations were over 50% more likely than all other organizations to pursue a disruptive innovation initiative designed to supersede an old business model with a new one. These business-wide innovation models affect every aspect of the organization from product development to service to sales. To successfully transform, these disruptive organizations require cross-functional collaboration and strong alignment with the voice of the customer to successfully innovate.



To understand how Social Business technologies support business capabilities, consider Figure 2 from two different perspectives: customer insight and customer engagement.

Customer Insight Social media and social networking communities give companies an opportunity to monitor and interact with current and potential customers. When sales and product development teams understand what customers want, and when they are seeking new solutions, they can plan their activities accordingly.

Sales and product development teams can also share appropriate information with internal personnel, ranging from pre-sales engineers to subject matter experts who can become more proactive in anticipating the needs of primary sales and product development teams. By assisting in both internal and external collaboration, Social Business can drive product and service innovation and accelerate revenue contribution.

Customer Engagement It is no longer enough to have an owned-media strategy based solely on interaction with branded communities and outbound communication. Although both remain important aspects of social engagement, today's organizations must also have an inbound and earned media strategy, where customers independently mention brands in their own social networks. Only 5% of mid-sized organizations saw social media as a strategic marketing goal, but 27% saw customer retention and loyalty marketing as strategic. In truth, these actions go hand-in-hand, as organizations seek not only to manage their owned media but to gain "earned media", trusted referrals, and meaningful interactions.







Mid-Market Social Deployment Strategies

Like all organizations, mid-market companies struggle in three key areas: tools, processes, and internal buy-in.

Mid-Market Gap Analysis: Information Management Best-in-Class organizations take advantage of real-time content creation capabilities to work simultaneously on a single, living document. This is a competitive advantage in new product development, marketing campaigns, advanced case management, and wherever content-intensive, collaborative brainstorming and creative activities are critical.

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Figure 3: Mid-Sized Use of Best-in-Class Knowledge Management


To gain feedback for new projects and corporate efforts, Best-in-Class organizations were over three times as likely as mid-sized organizations to use ideation modules to transform socially initiated ideas into corporate projects. Best-in-Class organizations also put special effort into knowledge management capabilities including search, archiving, and contextual tagging of all key information (Figure 3).

By accumulating the wisdom of the masses via social tools and incorporating them into searchable taxonomies, organizations maximized the value of information gained through ideation and social networking. Mid-market organizations were, on the whole, close to Laggard status in their adoption of these capabilities.



Mid-Market Gap Analysis: Organizational Commitment Social Business success is not just a matter of purchasing the right technology; it requires a commitment to creating an open and cross-functional environment. Best-in-Class companies supported social endeavors with organizational development. Although 65% of top performers have executive champions, they also have broad, organizational commitment to Social Business in operational roles (Figure 4).

Figure 4: Mid-Sized Adoption of Organizational Capabilities




Most Best-in-Class companies include veteran employees and line-of-business feedback in their social efforts. This allows key employees to act as social hubs for propagating Social Business solutions. Less than half of mid-sized organizations surveyed have tenured employee (or line-of-business) feedback integrated into their collaboration efforts.

Mid-Market Gap Analysis: Tools Four social networking and collaboration tools particularly distinguished Best-in-Class performers from Laggards: Group Chat, Collaborative Content Creation, Ideation Tools, and Activity Streams.

Table 3: Key Social Technologies for Best-in-Class Performance

Best-in-Class

(n=54) Laggards

(n=82) Mid-Sized

(n=61)

Group Chat Solutions 65% 29% 44% Real-Time

Collaborative Content Creation

50% 15% 21%

Idea Creation and Collection Module 41% 10% 12%

Activity Streams 33% 6% 10%


Each of these tools plays an important role in helping employees work synchronously, collaboratively, and productively. Group chat offers a continuation of instant messaging capabilities. Nearly 70% of Best-in-Class companies have group chat capabilities, compared to only 44% of mid-sized organizations. Activity streams played a similar role in the more advanced organizations surveyed, although for the mid-market, the complexity and intense resource drain of threading and sorting activities means these streams are typically just archived for future use.





Key Takeaways for Socializing the Mid-Market Business Technology, organizational capabilities, and key processes are all necessary to optimize Social Business in mid-market organizations. To get the most value from social technologies, Aberdeen offers the following suggestions:

• Align social efforts to cost reduction and profitability. Social outreach should be a cost-effective way to accomplish business goals, and can be used to replace a portion of more expensive or outdated customer outreach and feedback methods. However, it is important to remember that social is only one weapon in the communications arsenal. The top goal for social networking with customers should be to create a more personalized and loyal relationship with the customer.

• Start with product development, sales, and marketing departments. These departments had the highest levels of social adoption among top-performing organizations. When these groups can collaborate to support customer engagement, Social Business will rise from a technological curiosity to become a bona fide contributor to key business goals such as fostering disruptive innovation and supporting profitable growth.

• Archive and curate social content. Once employees, customers, and partners have provided social feedback, it is important to be able to find this information on an ongoing basis. By archiving social content, companies are better positioned to re-use that content, and use it in the future.

By aligning business goals to the capabilities available through Social Business, mid-market companies can position themselves to achieve Best-in-Class information sharing and social ROI.



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For more information on this or other research topics, please visit www.aberdeen.com

Related Research Three Gifts of SME Collaboration: Innovation, Revenue, and Workforce Readiness; January, 2012 Understanding Social Media in Consumer Markets through Advanced Monitoring Tools; January, 2012

Business Optimization through Integrated Communications: In the SoMoClo™ (Social, Mobile, Cloud) Era; December, 2011 The Aberdeen Business Review Reveals…; June, 2011

Author: Name, Hyoun Park, Research Analyst, Collaboration and Integrated Communications ([email protected]), Russ Klein, VP Research Strategy, ([email protected])

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

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Introducing Social Business for the Mid-Market - IBM · PDF fileIntroducing Social Business for the Mid-Market ... technology trends: localization, contextualization, mobility, and

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