introducing social biz

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This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research andrepresent 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-MarketPage 2

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

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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


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February 2012

Introducing Social Businessfor the Mid-Market

Over the past year, Aberdeen has studied the business practices of 229 mid-sizedcompanies (defined as those between 101 and 1,000 employees) surveyed for the

2011 Aberdeen Business Review and 61 mid-sized companies profiled inAberdeen's 2011 Social Collaboration research. Through these studies, Aberdeensought to discover if there were specific drivers and characteristics that madethese companies more or less likely to use Social Business. Interestingly,Aberdeen found that even though mid-market companies are more likely thanother organizations to identify business needs that can be solved through SocialBusiness solutions, they are less likely to have the budget and willingness topursue these solutions.


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

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

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

• 43% increased lead generation through Social Business through earnedmedia and the ability to better understand the needs of potential customers.This report provides directional guidance for mid-market companies toappropriately use Social Business and achieve these business goals.

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Key Business Problems for Mid-Market OrganizationsMid-market organizations are often analyzed under the category of Small and

Medium Businesses (SMBs), with the assumption that their business challenges andoperational structures are similar to their smaller counterparts. Although thisbroad categorization can be helpful in describing the general characteristics ofsmall and medium businesses, Aberdeen's recent research has focused on thedifferent pressures and challenges that small companies (defined in this report asthose with 100 or fewer employees) and mid-market organizations (up to 1,000employees) face.

In the first half of 2011, Aberdeen surveyed 232 mid-sized companies andcompared their top business goals for 2011 with the goals of 502 small companies.Small companies were focused on brand awareness and organic revenue growthto a greater extent than were all other organizations, which naturally led them tolow-cost media investments such as ungoverned social media. As companies growpast the 100 headcount mark, undifferentiated organic revenue growth becomesless important, and a majority of mid-sized organizations identify profitability andmargin growth as key goals. Mid-sized companies are also over three times morelikely 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

BusinessGoals

Mid-SizedOrganization

s (n=232)

SmallOrganizations

(n=502)

Mid-SizedGoals

Profitability/margin growth 53% 37%

Cost reduction 25% 6%

Small BusinessGoals

Organic revenuegrowth 55% 70%

Improve brandawareness/value 25% 47%

Source: Aberdeen Group, August 2011


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

• Increased competition;• Economic conditions;• Improving employee engagement; and•

Ability to execute strategy.


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

BusinessChallenge

Mid-Sized

Organizations(n=232)

Small

Organizations(n=502)

Mid-SizedChallenges

Improving employeeengagement 34% 17%

Ability to executestrategy 34% 26%

Small

BusinessChallenges

Increasedcompetition 36% 34%

Economicconditions 34% 41%


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


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Social Business Is Not a Standalone TechnologySocial 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 multipletechnology trends: localization, contextualization, mobility, and cloud.

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

Figure 1: SoMoClo: One Integrated Technology Ecosystem



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• 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 businessanalytics are vital tools for understanding and fully supporting a SocialBusiness initiative.


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Social technologies let individuals and organizations share information morequickly to support both innovation and collaboration. These traits have grownincreasingly important as consumers become more educated, product and marketcycles accelerate, and key resources are geographically dispersed.

Secure, Compliant, and Social BusinessThe desire to share both externally with partners and customers and internallywith other employees must be tempered by security and governance, riskmanagement, and compliance (GRC) concerns. Mid-market organizations havesignificant room for improvement in this area.

Security and GRC efforts associated with social are complicated by the fact thatsocial is not a standalone technology, but part of a SoMoClo environment. Socialnetworking technologies are often hosted in the cloud, which presents enterprises

with opportunities and causes for concern. This delivery method allowsorganizations to provide and support technologies in multiple form factors andlocations. Cloud services offer more continuity for key information, processes,and collaborative environments.


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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 GRCefforts associated with social collaboration in Aberdeen's Social Collaborationstudy. Less than half (46%) had secured all their social networking andcollaborative technologies, and only 26% had social environments that wereconsidered compliant with all corporate and industry standards. Although socialmedia and networking are cutting-edge technologies in some respects, they mustbe treated as business tools, and subjected to the same due diligence as moretraditional communications tools such as telephony and email.


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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-marketorganization, we found that social applications were more wide-spread at topperformers than all other companies. The top four value propositions identified byBest-in-Class organizations were associated with line-of-business responsibilities.Social Business was more likely to create value when sales, marketing, and productdevelopment departments were directly involved in improving customerawareness, customer experience, and the ability to purchase desired solutions(Figure 2).

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



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Innovation and the Social BusinessMid-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 largercompetitors to extract value from Social Business, and are at a competitivedisadvantage as a result. Closing this competitive gap could offer significant valueto the mid-market and support key strategic initiatives such as disruptive andenterprise-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 thatBest-in-Class organizations were over 50% more likely than all other organizationsto pursue a disruptive innovation initiative designed to supersede an old businessmodel with a new one. These business-wide innovation models affect every aspectof the organization from product development to service to sales. To successfullytransform, these disruptive organizations require cross-functional collaborationand strong alignment with the voice of the customer to successfully innovate.


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

Customer InsightSocial media and social networking communities give companies an opportunity tomonitor and interact with current and potential customers. When sales andproduct development teams understand what customers want, and when they areseeking new solutions, they can plan their activities accordingly.

Sales and product development teams can also share appropriate information withinternal personnel, ranging from pre-sales engineers to subject matter expertswho can become more proactive in anticipating the needs of primary sales andproduct development teams. By assisting in both internal and externalcollaboration, Social Business can drive product and service innovation andaccelerate revenue contribution.

Customer EngagementIt is no longer enough to have an owned-media strategy based solely oninteraction with branded communities and outbound communication. Althoughboth remain important aspects of social engagement, today's organizations mustalso have an inbound and earned media strategy, where customers independentlymention brands in their own social networks. Only 5% of mid-sized organizationssaw social media as a strategic marketing goal, but 27% saw customer retentionand loyalty marketing as strategic. In truth, these actions go hand-in-hand, asorganizations seek not only to manage their owned media but to gain "earnedmedia", trusted referrals, and meaningful interactions.


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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 ManagementBest-in-Class organizations take advantage of real-time content creationcapabilities to work simultaneously on a single, living document. This is acompetitive advantage in new product development, marketing campaigns,advanced case management, and wherever content-intensive, collaborativebrainstorming and creative activities are critical.

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

Mid-Market Gap Analysis: ToolsFour 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

CollaborativeContent Creation

50% 15% 21%

Idea Creation andCollection Module 41% 10% 12%Activity Streams 33% 6% 10%


Each of these tools plays an important role in helping employees worksynchronously, collaboratively, and productively. Group chat offers a continuationof instant messaging capabilities. Nearly 70% of Best-in-Class companies havegroup 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 ofthreading and sorting activities means these streams are typically just archived forfuture use.


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Key Takeaways for Socializing the Mid-Market BusinessTechnology, organizational capabilities, and key processes are all necessary to

optimize Social Business in mid-market organizations. To get the most value fromsocial 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, andcan be used to replace a portion of more expensive or outdated customeroutreach and feedback methods. However, it is important to remember thatsocial is only one weapon in the communications arsenal. The top goal forsocial networking with customers should be to create a more personalizedand loyal relationship with the customer.

• Start with product development, sales, and marketingdepartments. These departments had the highest levels of social adoptionamong top-performing organizations. When these groups can collaborate tosupport customer engagement, Social Business will rise from a technologicalcuriosity to become a bona fide contributor to key business goals such asfostering disruptive innovation and supporting profitable growth.

• Archive and curate social content. Once employees, customers, andpartners have provided social feedback, it is important to be able to find thisinformation on an ongoing basis. By archiving social content, companies arebetter 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 informationsharing and social ROI.


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http://www.ibm.com/midmarket/us/en/collaboration.html


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For more information on this or other research topics, please visit

www.aberdeen.com

Related ResearchThree Gifts of SME Collaboration:Innovation, Revenue, and WorkforceReadiness; January, 2012Understanding Social Media inConsumer Markets through Advanced

Monitoring Tools; January, 2012

Business Optimization throughIntegrated Communications: In theSoMoClo™ (Social, Mobile, Cloud) Era; December, 2011The Aberdeen Business ReviewReveals…; June, 2011

Author: Name, Hyoun Park, Research Analyst, Collaboration and IntegratedCommunications ([email protected] ), Russ Klein, VP ResearchStrategy, ( [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 toprovide 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 Fortune1,000, and 93% of the Technology 500.

As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community oflocal, regional, national and international marketing executives. Combined, we help our customers leverage thepower of insight to deliver innovative multichannel marketing programs that drive business-changing results. Foradditional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more aboutHarte-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 methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlesotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.
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