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Enterprise Social Networks: another tool, but not yet a panacea

TMT Predictions 2013

Deloitte | TMT Predictions 2013Deloitte predicts that by the end of 2013 more than 90 percent of Fortune 500 companies will have partially or fully implemented an Enterprise Social Network (ESN), a 70 percent increase over 2011. ESNs are internal platforms designed to foster collaboration, communication and knowledge-sharing among employees. Because they are social, they are intended to be engaging, encouraging adoption and participation. However, many ESNs struggle to attract users. According to a recent survey, if registration is required, some 20-30 percent of employees will not sign up. Of those who register, only a third will read content once a week or more and just 40 percent will make an ESN post in the average month1.

While those numbers might appear low considering some of the more optimistic projections for ESNs, they reflect the challenges companies have always faced popularizing internal networking technologies. Enterprise tools for sharing internal information (Intranets) have been available since the mid-1990s2 (albeit without the social aspect), but even when every employee’s homepage is the Intranet, more than half don’t use it on a daily basis3. In short, employee engagement may be a perennial issue for internal knowledge-sharing platforms.

How do the numbers from the survey correspond to consumer-oriented social networks? Some consumer-oriented social networks have large numbers of members signed up, but in general the proportion of active users is very much in line with this year’s ESN survey. About 58 percent read posts once a week or less and 56 percent make less than one post a week4.  A separate study suggests five percent of users create 75 percent of content5.

There may be a natural ceiling on social network usage, with any network eventually comprising a small group of super-users who contribute most content, a larger group that reads but doesn’t create and a final group that doesn’t create or consume6.

It might be expected that ESNs, being relatively new technologies, would primarily appeal to younger employees. In fact, the same survey said that in 40-49 year olds were more than 40 percent more likely to have registered and more than 100 percent more likely to post more than four times per month than 20-29 year olds. This may not surprise those inside the enterprise who implement ESN solutions, but might surprise many outsiders who have a preconception about which age groups are most active on social networks.

There were significant variations in rates of registration, consumption of content and creation of content by geography. For example, the number of users who posted less than once a month ranged from a low of 41 percent to a high of 72 percent7. Regardless of whether ESNs are better or worse at engaging employees than previous technologies, almost all organizations are likely to desire higher engagement levels than they see today. Although the ultimate measure of ESN success ought to be the value they create, many executives will likely focus on what prevents employees from using networks and what can be done to encourage them to do so.

According to the same survey, a large proportion of employees feel that time restrictions prevent them from using ESNs regularly, or at all. Many don’t have a clear idea of the potential uses and benefits, or may believe they are already overloaded with information and can’t be bothered to keep up with yet another social network8.

What can companies do to improve the success rate of ESNs? The survey indicates that users feel their ESN experience could be improved if the company incorporated the ESN into existing business processes. In addition, a ‘how to’ guide and a list of potential uses and success stories would be valuable9. About a third of those who use an ESN say it has made a positive impact on their work. That number may generate a positive return, based on the investment in the tool; however, many organizations will likely wish to see a higher level of engagement.

A more positive way of appraising ESNs might be as a relatively low-cost, risk-managed, complementary method of communication and collaboration (internal and perhaps external) that may not be appropriate for every user and every communication, but which may be productive for some people in some contexts. Employees are being offered more and more tools, each of which is increasingly specialized. As the number of available tools rises, the number of tools not used also rises: an inescapable consequence of proliferating choices. On the other hand, the current generation of ESN tools is only a few years old. When email and cell phones were first introduced into the enterprise, they likely saw adoption rates similar to where ESNs are today.

Organizations that expect enterprise-wide ESN adoption in the very near term are likely to be disappointed; whereas those that regard ESNs as simply another form of communication that is better than Instant Messaging (IM) and email for certain groups at certain times are more likely to be satisfied. Further, the low marginal cost of most ESNs (many are free for the base version, bundled with other software, or no more than $5 per employee per year) means that even small improvements in employee communication and knowledge sharing will likely produce a positive return on investment.

Bottom Line

Benchmarking previous tools is a useful first step. Executives should assess what levels of engagement were achieved by previous tools, and how an ESN might be better.  They can then decide what the goals for an ESN should be:  Registration? Reading posts? Making posts?  While it may be possible over time to achieve 100 percent registration, that level of regular consumption or contribution seems unlikely. What’s more, it may not be necessary.

Age-related assumptions should be challenged. Based on the survey, ESN administrators cannot assume that enrolling younger employees will be easy, or that older workers will be resistant.

Variations by country suggest there are local best practices for encouraging productive use of ESNs. Firms may wish to look to their best performing regions and then apply what they learn to drive engagement across the global enterprise

As with any change in the workplace, communication and training are key.  Employees will likely need to be encouraged and taught how to make the best use of the ESN. Showing ‘how and why’ appears to be critical. Even more important is the need to clearly demonstrate the benefits of using the network; for example, showing that responses to information requests are faster and better quality via ESN than email.

Most critically, ESN needs to be part of their existing work flow and business processes.  Making the ESN a part of everyday communicating, collaborating and creating seems likely to be the tipping point in building engagement and utility.

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1 Deloitte Touche Tohmatsu Limited conducted an online survey with a global firm of more than 50,000 employees over a four week period. Some 1,797 responses were received. The survey was not randomly distributed, and responses did not reflect the geographic distribution of the firm’s employees. However, the distribution of respondents by age, position and function was a good match for the makeup of the overall employee base. The survey asked questions about a single Enterprise Social Networking (ESN) tool, and it should be noted that the firm also has an Intranet site, official knowledge management and collaboration tools, as well as a variety of ad hoc user groups on consumer social networks. The invitation to join the survey was disseminated by email, but also through the ESN in question. Therefore it seems likely that the survey results may overstate employee registration and engagement to some unknown extent. Still, although survey invitations were extended to over 5,500 employees belonging to two ESN champion groups, less than five percent of responses came from those ESN groups, with the other 95 percent coming from those contacted via email or phone. Finally, Deloitte Touche Tohmatsu Limited have had subsequent conversations with other global firms of varying sizes, using the same or different ESN solutions, and their experience is very closely in line with the survey findings. This Prediction is not about a specific ESN or implementation – the results (at this time) appear to be fairly consistent.

2 Source: 1994 Design of SunWeb - Sun Microsystems' Intranet, Sun  Microsystems, 1994. See: http://www.useit.com/papers/sunweb/ appears to have been among the first corporate intranets.

3 Source: Intranet Statistics from Intranet Insider World Tour Live 09 NYC, Communitelligence, 17 April 2009. See: http://www.communitelligence.com/blps/article.cfm?weblog=59&page=732

4 Source: Survey: “Twitter”, Total Statistics, Mediabistro, March 23, 2012. See:  http://www.mediabistro.com/alltwitter/files/2012/04/AYTM-Market-Research-Twitter-Study.pdf

5 Source: Twitter facts and figures, Reuters, July 2011. See: http://retelur.files.wordpress.com/2007/10/touch-agency-twitter-facts-and-figures-110907123758-phpapp02.pdf

6 For the latter group, it is essentially moot whether they register or not.

7 Excluding countries where there were insufficient answers (<25) to provide a meaningful sample.

8 These numbers were not consistent among those that used the ESN and those that didn’t: “time restriction” was cited by 51 percent of users, but only 43 percent of non-users. Some 47 percent of non-users did not understand the use case, while that factor was only 38 percent of users.

9 Once again, there were differences between the users and non-users: 61 percent of users wanted integration into existing business process vs. only 39 percent of non-users; and 46 percent of non-users wanted a “how to use the ESN” guide, vs. only 36 percent of users wanting that.

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