by Julian Goldsmith

IBM puts social networking to work

Jan 31, 2011
IT LeadershipIT StrategyMobile Apps

The theme of this year’s Lotusphere developers’ conference in Florida is Get Social, Do Business. Basically, the focus is on how businesses can harness the power of social networking to perform better. In a way, it’s not surprising that a company like IBM would seek to position itself in this space when it is clearly vulnerable to appearing irrelevant to end users moving towards an off-premise model for their applications.

The company’s collaboration software specialist Lotus is launching a raft of products, or adaptations of existing products, to support web-based collaboration and extending its integration with IBM’s other subsidiaries that focus in areas such as business intelligence to present a rounded offering to customers.

The social networking proposition uses the behaviours, familiar to many users in their leisure time when they connect with friends, to encourage a similarly flexible flow of information within the business. Social networking is about to go to work.

According to IBM general manager collaboration solutions Alistair Rennie, businesses that adopt social networking internally are more successful. In his keynote speech, he cited a 2010 McKinsey report that found such businesses reported better profitability.

The main benefits of adopting social networking within business are:

– An ability to capitalise on collective intelligence.Employees are better able to search out the expertise they need to complete a task

– A transparency within and without the business.Employees are better able to cross the siloes that prevent them from working collaboratively with the relevant colleagues. Customers are more engaged with the company because the lines of communication and feedback are simpler.

– An increase in speed of reaction.Teams are able to act quickly to changes in the market, because they have the information they need at their fingertips and the decision-making process is simplified.

This last point refers to a potentially challenging aspect of adopting social networking within the business. IBM Doug Heintzman admits that it will break the conventional leadership model of command and control. If employees are better informed and more closely linked, they will feel the need to have a bigger part in the decision-making process – excellent news for the business, but troubling for old-school business leaders.

Heintzman has a theory on the relationship between productivity curves and technological innovation. He sees the last great leap in productivity was the trend towards ERP systems – data backbones that integrated different departments within a business. This productivity growth has fallen away, as the potential benefits have been realised.

He thinks the next productivity curve will occur in the stages of processes that require some people-input, generally around business decision-making. An internal social infrastructure gives people access to the expertise they need to make well-informed decisions in a timely manner, but the process improvement is much more organic and less under managers’ control.

Heintzman illustrates this by focussing on IT procurement. The trend is moving towards business lines, like sales or R&D procuring their own IT through their own network of contacts. This means the IT procured is better fit for purpose and is put in place in time to have an impact on the business. But, the challenge for the CIO will be making sure that this procurement doesn’t conflict with the needs of the other business lines.

“It’s a complex procurement environment,” said Heintzman. “CIOs are going to have to become partners in evaluation and procurement of IT [rather than arbiters]. The CIO has to be an up-front consultant.”

The CIO’s cross departmental remit makes them the ideal candidate to be that partner, and also to be the company’s eagle eye. A social infrastructure can’t function without advanced analytics that enable the business to get a clear view of their employees’ activities on it. Information governance and compliance with regulations that address the flow of data is the purview of the CIO, Heintzman believes, and it’s vital CIOs become the master of this emerging IT discipline.

Yes, IBM is a little late to this game, but it’s a player that everyone is used to seeing at the table. Many CIOs already have relationships with it and they may find it easier to take an infrastructure services proposition to the board if they mention the name of such an established IT company.