Tough Times, Social Technology and the Innovative CIO

The combination of tough times plus the spread of social technology makes this a great time for the CIO who has some innovative ideas about how to use the latter to respond to the former. 

 

Sure, innovation is more risky than business as usual. But when business as usual isn’t working so well, then innovation is actually less risky – because you know you’re going to get clobbered if you do nothing – so there is every reason to try something new. Here’s an idea I’ve been working with. You can put it into practice quickly without spending a lot of money. Use it to build your reputation as an innovative CIO this year.

 

[ I do lively presentations on this and related topics – www.MichaelHugos.com ]

 

Innovators Harness Trends and Turn them into Solutions

 

Two recent studies from Gartner and McKinsey provide the foundation for this idea. Let me explain.

 

Gartner, in their top predictions for IT organizations in 2012, says by 2015 more than a third of IT spend will happen outside the IT budget and the chief marketing officer (CMO) could well have a bigger technology budget than the CIO. They say the spread of cloud and consumer IT means in-house IT groups will need to change from traditional functions of purchasing and operating IT to something more directly related to how the company operates and makes money. 

 

McKinsey, in a study titled “How Social Technologies are Extending the Organization”, defines social technology as the combination of social media, SaaS apps, consumer IT devices and cloud computing. They say lots of companies are experimenting with ways to integrate social technology into company operations, but only a few so far are figuring out how to make it work. They don’t say how these few are doing it, but they say those companies that are report improved operating margins – they’re making more money than their competitors. 

 

Here’s how I see it. At present companies use social media like Facebook and Twitter and YouTube mostly to deliver advertising messages, but that misses their real potential. The real potential is to combine social media with relevant in-house systems like order entry, customer service, purchasing and business intelligence. When that happens, real-time two-way connections are created between companies and the wider value chains or business ecosystems that they operate in. 

 

Big Innovation comes from a Small Shift

 

The small shift is this: Stop seeing social media as a way to broadcast or “talk at” people; use it as a way to communicate or “talk with” people. When companies use social media for two-way instead of one-way communication with customers and business partners it creates a real-time collaboration and feedback system that did not exist before. Companies can sense and respond to new opportunities faster and more effectively.

 

Here’s how this can happen. I illustrate the idea with a wholesale distribution company; you can modify it to fit your situation.

 

Let’s imagine a wholesale distributor called Super-Duper Company invites the companies (not the individual people) it does business with to friend it on Facebook. Its suppliers and customers friend Super-Duper on Facebook and then they all use Facebook to create a multi-media real-time collaboration platform (it will cost almost nothing to set up and operate) to work together on a daily basis.

 

People in all these companies can now communicate with each other and share text, pictures and video to plan and coordinate new sales campaigns, or educate customers on new products, or handle any number of customer service activities. The diagram below shows how it works.

 

 

Once the Super-Duper Company has created a social business network like this, the next step is to connect selected social media apps with relevant internal systems at the company. This is illustrated in the next diagram.

 

 

This social business network offers big benefits. People already know the user interface for these social media platforms so the learning curve is not hard. The new social business network you just created will run on all sorts of mobile devices like iPhone, Android and iPad, and will stay current as new devices come out because the social media vendors (Facebook, Skype, Twitter etc.) do that job for us.

 

Social media has well defined application program interfaces (APIs) so it is a straight forward task to connect them to relevant in-house systems and to company web sites. And because the data sent to and received from these social media applications is well defined, companies can apply appropriate security screening to the data as it moves back and forth through these APIs. 

 

Remember, people on this network are not just chatting with each other to while away the time, instead they are enthusiastically engaged with each other to collaborate on a daily basis to accomplish specific goals that are important to their different companies. This use of social technology is a big part of how the new game of business will be played and how success will be achieved.

 

You can put this idea into operation quickly (use an agile approach with 30-day iterations). It won’t cost much. Get the first version into operation in 30 - 60 days. Then see what people say and what happens next. You can take this basic architecture in any number of directions as events unfold. 

 

They’ll call you innovative. Tell them you planned it that way.

 

[ Social technology, consumer IT and video games are blending together and changing the world - learn more - my newest book is Enterprise Games: Using Game Mechanics to Build a Better Business.]