Are Enterprises Ready for Social Networking?

While vendors prep new offerings, enterprises are looking for examples of ROI and assurances that the technology won't violate privacy or damage hard-earned relationships.

The hype around social networking is here and the products are ready to launch, but will enterprises be eager to adopt this new technology?

That depends largely on how quickly early-adopter enterprises can begin demonstrating return on investment using the new software and services entering the market, analysts say. The first enterprise target is clear: sales and business-development organizations.

"Theres no place more evident than in sales that who you know is more important than what you know," said Stowe Boyd, managing director of consulting company A Working Model, in Reston, Va.

Sales and business-development groups are heavy users of sales force automation systems, which already track ROI and deal flow metrics. Companies who first use social networking in a coordinated way should have little trouble tracking the impact that the technology has on the number of deals or time it takes to make a deal, Boyd said.

/zimages/5/28571.gifSocial networking companies focusing on the enterprise recently opened up to on their product plans and strategies. To read the full story, click here.

Early users of social-networking technology say they already have found that it greatly expands their business network, allowing them to tap into a broader pool of contacts and to gain an edge by receiving a warm introduction to new business prospects.

"My business is a referral-only business," said Keith Furuya, a financial advisor at MetLife, in Campbell, Calif., who has 10,000 contacts on Spoke Software Inc.s network. "I am able to use my contacts more efficiently to get introductions and new contacts."

For Steve Tucker, a vice president of business development at Z-Tel Communications Inc., in New York, his network on LinkedIn Ltd. has helped him extend the reach of his relationships and has become a secret business weapon. He has used social networking to help recruit job candidates and to find new business partners.

"I use it as a resource to get beyond my first degree," he said. "I have had a higher success rate of getting through to someone at the second and third degrees"

But to reach beyond early adopters, social networking needs to become more familiar to enterprise users and overcome fears around privacy and etiquette, Boyd said. Users who are not as familiar with online social tools, beyond e-mail, may be skeptical of sharing contacts or brokering introductions through the Web.

"Its going to take a while for those social perceptions to change to accommodate the give and take required by this," Boyd said.

The social networking vendors themselves are still working out various approaches to privacy. All provide users with a choice of whom to include in the network.

Spoke Software Inc. and Visible Path Corp. both extract contact information from enterprise systems such as customer relationship management, with Spoke also mining individual e-mails. Both say that they allow an individual user to decide whether to participate and the ability to exclude specific contacts.

But ZeroDegrees Inc. and LinkedIn go a step further. They require both parties to explicitly opt in before being included in someones network.

Almost all the business-focused networks also try to emulate real-life etiquette by requiring a user to go through their first-degree connection in order to gain a connection with more distant contacts. Spoke and Visible Path, for example, even shield the intermediarys information, allowing that person to anonymously decline a request to make a connection without having to worry about damaging a relationship.

Tucker said that his direct connections have declined on a few occasions to pass through his requests to connect with someone, and he has opted against granting requests from users wanting to connect with him. In both cases, there were no hard feelings. The feedback from the denials often is as valuable as the potential connections, he said.

"Even if I do share my entire network, as I do, you have to come through me," Tucker said. "I am the gatekeeper."

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