Will SMEs be an Enterprise Social Network Train Wreck?

Will SMEs be an Enterprise Social Network Train Wreck?

I had the pleasure last week of attending Social Now in Amsterdam, a conference organized around the idea of having a dozen enterprise social network (ESN) vendors pitch for the business of a mock company comprising the conference attendees.

But while the conference was excellent, I left with deep concerns about the future of enterprise social networking, and a sense of missed opportunity.

The reason: ESN prices are falling, and some ESN vendors see communicators as no longer relevant to the sale of ESN platforms.

At Social Now, I spoke with a vendor whose platform is being offered for less than $5000 per month. While that is a significant sum for most communication departments, it is pocket change for the IT departments even of small to medium size enterprises (SMEs). The vendor’s solution: “We go directly to IT. We don’t even mess with the communications departments any more. IT can make a decision in two weeks while it can take communications a year.”

These two developments—the fact that an ESN platform can be hired for a year for less than a decent junior internal communication manager, and that its pathway into the company could be navigated unhindered by a critical communication eye, give reason for concern, perhaps even alarm. We may be on the verge of a train wreck.

Enterprise Social Networks have considerable potential both to increase connectivity and collaboration in organisations and to replace expensive management practices and infrastructure. But research increasingly shows that such potential requires active participation and management from people who are committed to those objectives and have some idea of how to stimulate them over time. Research also shows that handing a tool to IT, and having IT turn it over to the company without such support is tantamount to a death knell.

Moreover, small to medium sized companies in multiple locations (1000-5000 employees) have a lot of potential success factors for ESN implementation—they are too big for all communication to be informal, too small to merit an overly mechnanised or professionalised corporate comms approach, and often have considerable need to connect people across a wide range of locations and disciplines. But those needs will not be met merely by launching an ESN platform and telling employees to “use it just like Facebook.” And, if those platforms fail, employee receptivity to a similar approach may take years to recover.

One possible solution—the provision of strategic consultancy as part of an ESN package. Developing a business model for strategic internal comms consultancy for the small to medium corporate sector has long proven challenging. It takes comparable effort to understand and manage the communication strategy for a company of 500 as for one of 5000 or 50000, even if the scale of execution is profoundly different. So, it isn’t scalable in the same way as selling and delivering ESN platforms and online services.

But the desire to retain platform customers could make a joint platform-consultancy bundle viable. Selling a platform in two weeks to an IT department could be easy. Keeping an ESN from becoming a disaster without proper consultancy and strategic support could be far more difficult. And without a viable model for providing such support while keeping the overall package affordable, we may well have a train wreck on our hands.

5 thoughts on “Will SMEs be an Enterprise Social Network Train Wreck?

  1. Hi Mike,

    Thanks for sharing your thoughts and rising concerns for the future of ESNs. I myself work at a Danish ESN, Echo.it, and I can tell we have some experiences in common.

    One of the key points we’ve made over the last years is ownership, as you point out too. Having someone dedicated to making the ESN a success is vital. In our use cases the success rate is far bigger, compared to those with weaker ownership. Besides this, we’ve extended our SaaS to offer consultancy, as you point out too. This greatly ensure the implementation, as well as giving management far bigger insights into employee engagement.

    Looking forward to more posts from you! Thanks again. /Danni

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    • Hi Danni…

      I am Denmark-based so would love to see what you all are up to in person…

      You all are smart and forthright in bringing up the ownership issue with your current and potential clients, looking beyond the seductive quick sale and towards more sustainable relationships. I suspect this will serve you well as the number of small, local providers promises a shakeout that will sweep away those operators with shallow customer ties and which have not secured client-level owners and champions.

      Look forward to continuing the conversation.

      Mike

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  2. Hi again Mike

    Wow – great! I hadn’t seen that you’re DK based.

    Exactly, seductive quick sales are good at the moment, but not for the long term commitment. And that’s what it’s all about: Sustainable relationships, as you say. The corporations are, in my experience, also more interested in a sustainable, business essential approach, than a quickfix.

    How would you like to come by for a cup of coffee some day? I think that’d be interesting both to you and us. You’re very welcome to send me an email if you agree, and we can set up a date. My mail is danni at echo.it. We’re located in the heart of Cph, and there’s always coffee at our disposal 🙂

    /Danni

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