IBM: Defining a Social Business

At Lotusphere 2012, IBM continues to set the tone for the social business software market the company essentially created inside its own walls for internal use.

ORLANDO, Fla.-It takes one to know one. That's what IBM says about social business-IBM says it essentially created the market for social business software because Big Blue needed it for its own purposes.

With well over 400,000 employees spread all over the world and a vast number of partners, suppliers and customers, IBM needed a better way to interact with its own people as well as entities it dealt with externally. The company then began developing collaborative tools for use inside IBM. As IBM announced the expansion of its social business software strategy at its Lotusphere 2012 conference here, eWEEK takes a look at how Big Blue defines the opportunity.

"The origins of our social business strategy came about a decade and a half ago when we had a mandate from our leadership to better leverage our employees," said Jeff Schick, vice president of Social Software at IBM, in an interview with eWEEK. "We really needed to better connect our people, and we got started along that path ourselves. And about six years ago we recognized that these collaborative technologies were not only helping us, but could be useful for others. That's where it started."

Schick said IBM decided to build software with social collaborative capabilities to market to customers, which culminated in the launch of IBM Lotus Connections, now simply IBM Connections, in 2007. IBM Connections is a Web 2.0 social software application developed by the Lotus Software division of IBM. The goal of Connections is to empower companies to be more innovative and help them execute more quickly by using dynamic networks of co-workers, partners and customers. It provides social networking tools for businesses to use to bring together people through online tools. IBM Connections is Big Blue's core product for social businesses.

Indeed, on a press-focused Web page, IBM describes a social business as:

"Social Business is a smarter approach to the 'people-centric' processes of business. Social Business means connecting networks of customers, partners, and employees, using analytics to derive insights from those connections, and using those insights to improve business functions. It's an organization that uses social networking tools fluently to communicate with people inside and outside the company. It's a strategic approach to shaping a business culture, highly dependent upon executive leadership and corporate strategy, including business process design, risk management, leadership development, financial controls and use of business analytics. Becoming a Social Business can help an organization deepen customer relationships, generate new ideas faster, identify expertise and enable a more effective workforce."

Moreover, in a Smarter Planet pitch on becoming a social business, IBM said:

"Becoming a Social Business requires a long-term strategic approach to shaping a business culture. It is highly dependent upon executive leadership and corporate strategy, including business process design, risk management, leadership development, financial controls and use of business analytics. In fact, one of the key findings from the 2011 IBM Social Business Jam-an online, real time discussion among almost 4,000 registrants that focused on top Social Business issues-was that Social Business activities need to be integrated and aligned with business processes to be truly effective."

"The idea of a social business genuinely came with how IBM itself improved its business processes and improved revenue by leveraging social networking," Schick told eWEEK. "It is an example of how to instantiate both culture and technology in a way that allows the business to work smarter."

Schick added that he believes IBM is a clear leader in the social business software space. In June 2011, IDC ranked IBM No. 1 in worldwide market share for social platform software for 2009 and 2010. According to IDC, worldwide revenue for the social platforms software market was more than $500 million in 2010, representing growth of 31.9 percent. The market opportunity for social platforms is expected to grow by a factor of nearly 2 billion worldwide by 2014, according to the firm.

"We've been the leader in enterprise social business software," Schick said. "There are people out there with a discussion tool or a wiki or some other components, but there is nothing with the size, range and scope of what IBM has to offer."

Schick added that IBM also has a productivity portal capability in its global services group that can help determine how effective the use of social software has been for IBM services customers.

"We've seen improved individual and group productivity, as well as unearthing new skills and capabilities, the proliferation of expertise and knowledge, and we've seen users find relevant people for specific tasks," Schick said.

For instance, Schick said his team has identified the opportunity for an average increase of $74 a month in terms revenue per employee. "That's up to $93 million a year," he said.

In a more concrete example, Schick said by adding social and online collaboration technology to its how-to, developer-oriented developerWorks site, IBM has been able to save $100 million a year.

"This is something we see accelerating in terms of market interest," Schick said, noting that several IBM customers from various vertical industries will share case studies on how they are using IBM's social business software to improve their productivity and bottom lines.

"Social business enables enterprises to best leverage their most important asset, their people," he said.

Meanwhile, IBM's new enterprise social software delivers advanced analytics capabilities that help users gain access to information and people on the fly to accelerate collaboration and be more effective in their jobs.

Moreover, IBM officials said the adoption of social software is rapidly becoming a vital business tool, enabling organizations to transform virtually every part of their business operations from marketing, customer service and sales to product development and human resources. Social business offers the world of possibility that occurs when all of the energy and opportunities that have been generated around consumer models, such as Facebook and Twitter, are focused and brought to bear on business challenges.