Value is what we achieve as a result of implementing social business through connecting, collaborating and creating things that matter.
I often get asked the question, “What is the measurement of value for our proposed investment in social business and social business software”? This is an interesting question and poses an opportunity to reflect on the reasons for adopting “social” in the first place. The introduction of social business within an organisation comes about because other business methods have been found wanting, whether that be a major process like ERP, Human Management, Finance or a supporting process like Document Management, there have been large holes, leaving net results less satisfactory then the business plan wants them to be.
Social business is not about changing the need for transaction based results, but about achieving other outcomes that assist employees, customers and suppliers create records of fact, ie transactions. Looking into more deeply as ERP and other business processes have become more and more complex they have added more and more layers of information that is captured as a result of a transaction. This then generates a set of numbers by which an organisation measures its performance, but nowhere in the process can sentiment be measured as an effective way of knowing whether results could be even better. This is where social shines and by definition where its value can be measured.
If, before social is introduced the equation is AxB=C at end date 1, meaning no of products sold equals revenue at say 30 June 2012, then using the same criteria and pushing forward to end date 2, the measurement of social’s impact is the difference (on the basis that all other factors remain constant).
Clearly this is a gross over simplification of a business model, however it demonstrates that there are ways to measure the association of value to the introduction of the new “social” way of doing business. Your social journey may initially focus on a department or division and in terms of deciding on the measurement of value this is a good approach as the target outcome is of lesser scope than an attempt to adopt social across the entire operating spectrum.
The rule of thumb is simple. Measure the before and after or if you are unsure about making a decision to adopt social based on an inability to create a measurement scope, visit other organisations that have successfully implemented social and adopt some of their ideas, after all this is what social is all about, sharing, collaborating, breaking down big brick walls and becoming transparent.