The emerging Networked Enterprise

SUMMARY:

Research suggests that we have reached something of a plateau in the development of what once pigeon holed as ‘social business.’ Business is understanding that there needs to be much more: enter the Networked Enterprise.

McKinsey & Co. published its latest research based on interviews with 3,500 executives on Networked Enterprises that suggest that the benefits are plateauing:

“In aggregate, though, the shares of respondents reporting certain benefits have hit a plateau, suggesting that these benefits are harder to come by after the first wave of adoption. Executives are optimistic but sober about the next leg of the social-technology pathway: they expect increases in employee productivity but also recognize the significant organizational barriers that prevent their companies from capturing the full potential of social tools.”

So…

The goal post hasn’t moved. ‘Social’ is still being measured around the original set of soft benefits.
The harder the benefits, the more you have the chance of seeing high rates of growth. See for instance, ‘increase speed of access to knowledge vs. reducing travel costs.’

Most striking to me though is that the report looks at the state of Networked Enterprises but measures the performance of traditional social business and community capabilities. Maybe it’s just me but I hold the concept of Networked Enterprises to a much higher standard and its tragic when the two are interchanged.

Networked enterprises are designed from the ground up to wrap the best minds around business process, intent, data and content in a contextually relevant way. I touched on four primary networked structures at Cebit last month:

  1. Customer Networks that wrap the best employee and customer minds around specific tasks. These are of course, prevalent today.
  2. Talent Networks that can better handle the efficiency and the cost ($135,000 per employee according to Forrester Research) of on boarding, enabling and re-enabling new employees as strategic objectives evolve.
  3. Performance Networks that solve what 88% of CFOs believe is needed to streamline financial performance from dealing with cross-functional collaborative processes and daily exception handling
  4. And ecosystem/supplier Business Networks where 42% of organizations are looking for increased efficiencies that come from improved transaction and communications beyond what EDI or even Web based transactional connectivity has delivered thus far.

Networked Enterprise are at risk from the get-go if they are confused with ‘social business.’ The latter centers on ‘increasing speed of access to knowledge,’ ‘reducing communication costs’ and the like or the misconceived tussle with email. Don’t get me wrong – these absolutely have their place to improve connections across the enterprise. But truly Networked Enterprises are a lot more.

Lets look at a few examples of Networked Enterprises:

  1. The Ariba Business network of over a million suppliers is one of the best examples of this type of exponential business efficiency where the networked members themselves are the context that buyers leverage to optimize supply chain spend.
  2. Yelp now leverages network analytics to offer price estimation for listed businesses. This is a paradigm shifting opportunity for tiniest mom and pop restaurant where demand and supply has traditionally been extremely complex.
  3. SAP’s SCN network is another example how the community flocks around products and the knowledge of SAP Mentors to improve something as small as a buggy line of code or help with a large-scale ERP deployment.
  4. SuccessFactors formal LMS (and now the newly released OnBoarding Application) + SAP Jam’s peer to peer learning capabilities create contextual knowledge networks for employees at many of the largest organizations in the world.
  5. And here’s one of my favorites: A serious pain point in logistics where networked fleet management for truck drivers of a logistics provider can identify alternate traffic routes to avoid traffic delays and reduce whopping average costs of $79,000 in fuel costs, per truck, per annum.

This is the power of Networked Enterprises.

Social Business communities can often an inch deep and a mile wide. But as we see the emergence of truly Networked Enterprises, well see that they wont cling on to the edges of the enterprise. Rather, as we’ve seen in the examples above, they will subcutaneously inform and even power critical business process.

Image rights via SAP