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white paper

Rethinking
ROI in the
Age of the

Social CIO
The IT organization at Texas Health Resources, one of the largest
faith-based, nonprofit healthcare delivery systems in the United States,
is rapidly weaning itself from e-mail. Staff members found that an enterprise social network provides a more efficient and less chaotic means of
keeping up with the information that concerns them.
Instead of blasting out messages to large e-mail lists, employees now post requests,
inquiries and updates in online discussion areas clustered around topics ranging from
electronic health records to weekend sports. Little is off-limits. Employees can freely form
affinity groups around topics that interest them. They can subscribe to updates on topics
of interest and follow their colleagues online. When a topic no longer concerns them, they
unsubscribe. No more in-boxes cluttered with irrelevant information. Thanks to internal
social networking, people are forming new connections with colleagues they might otherwise never have met.
CIO Ed Marx leads by example. Every day he posts news about his department and uses
various messaging arenas to publicly express praise for work well done. He participates
in groups focused on critical business issues such as regulatory compliance and hospital
information systems. But hes also active in a group devoted to multisports. Ive met so
many people through that group, he says.
An online collaboration platform is changing the way the CIO does business. During last
years budget cycle, Marx posted a question: What would his employees do if they were
drawing up a budget for next year? He received about a dozen responses, and some were
very good ideas.

white paper

Rethinking ROI in the Age of the Social CIO

This new style of collaboration is enabled


by a new breed of private and secure
social networks designed to work within
companies. Enterprise social networks
(ESNs) provide real-time communication
capabilities as well as many of the same
features people have come to know and
love in online communities such as Twitter,
LinkedIn and Facebook. However, they add
tighter security, extensive administrative
controls and integration with corporate
legacy platforms. They are quietly transforming the way organizations do business.

promises to transform the role of the CIO.

Texas Healths internal social network grew


from the bottom up. Employees discovered
the network, and told each other about it.
We went from no users to 2,300 users in
18 months, Marx says. It was all viral.

In short, ESNs raise the corporate IQ, and


in an economy in which knowledge capital
is increasingly the only source of differentiation, the benefits can be almost incalculable. But their adoption shouldnt be
regarded as a leap of faith: there are many
discrete and measurable ROI benefits in
facets such as time to market, employee
satisfaction and product innovation.

And thats just fine with Marx. Hes a


new breed of IT leader: the Social CIO.
Rather than making top-down decisions
about what collaborative applications the
company should adopt, he and a growing
number of other CIOs are learning to let the
wisdom of crowds drive the process whenever appropriate. If you want to expand
your influence, you need to be open to
other peoples ideas, he says. We dont
want people to see themselves as punching a clock. We want to foster collaboration
and community.
Bottom-up technology adoptionsometimes called consumerizationis a clear
trend. A 2011 IDC survey of more than
2,800 information workers found that 95
percent have used technology they have
purchased themselves in the workplace.
However, the same survey found that corporate IT departments are mostly resistant
to this trend, preferring to drive technology
decisions from the top down.
That resistance is likely to diminish over
time. The IT research firm Gartner predicts that consumerization will be the
most significant trend affecting IT during
next decade. Personal computers, smartphones, tablets and social networks are
just a few of the technologies that have
made their way into the corporate mainstream this way. The phenomenon promises to vastly improve technology adoption
rates and spur innovation as people invent
new uses for tools that excite them. It also

ESNs deliver a set of flexible collaborative tools that can be adapted to serve a
wide range of purposes. On a macro scale,
they optimize the value of resources that
already exist within the organization, by
making them visible and available to a
wider audience. At the individual employee
level, they develop and strengthen bonds
between coworkers that lead to better
collaboration, more proactive knowledge
sharing and stronger morale.

Social CIOs dont immediately try to predict


how employees will use these tools, nor
do they impose rigid approval processes
on the innovations people create. Instead,
they view themselves as facilitators who
constantly evaluate new technologies
embraced by users, integrate the best
products with corporate standards and
ensure that data is secure and available.
In the process, they are unlocking value
that top-down approaches have failed to
discover for decades.
Here are 10 emerging benefits of enterprise social networks and the criteria CIOs
can use to measure them:
1. Gather and preserve tacit institutional knowledge. Much of the intellectual capital of a typical corporation is
locked up in the minds of its employees
and in presentations, spreadsheets and
word processing documents stored on
their computers. This information is often
shared infrequently or not at all unless
employees are asked for it. If people are
connected within a public venue for discussion and encouraged to create documents collaboratively whenever possible,
value emerges naturally from the problemsolving process. Methods for measuring this value examine improvements in
the speed at which new products and

Social networks are peoplecentric. In essence, they are the


chance corridor meeting or the
informal question posed to the
person at the next desk.

Andy Mulholland
Capgemini CTO

enhancements are delivered to market, the


corporate taxonomy created around critical
issues and the efficacy of knowledge preservation and transfer. Employee surveys
can also determine whether people believe
that access to more knowledge capital has
improved their productivity.
2. Reduce waste and duplication
of effort. Project information has traditionally been shared only among those
who had a need to know. With ESNs,
project information can be posted publicly
for all or specific subsets of the network to
see. Early adopters of ESN have found that
employees are eager to share their knowledge when it enhances their personal
visibility and contributes to the success
of the group. Tags, keywords and filters
enable employees to find and subscribe to
information that interests them, making it
more likely that overlapping or immediately
relevant work is discovered quickly before
time is wasted.
Rapid access to the perspective of others
reduces time spent searching for basic
information. When the H1N1 flu broke
out in 2010, hospital directors at Texas
Health used their company social network
to notify their peers that their hospitals
were rapidly filling up. By sharing that
information within their real-time, secure
communication environment, they quickly
discovered that a possible pandemic was
taking shape and immediately coordinated
proper response activities.
The value of this use of an ESN can be
measured by metrics such as the size of
project teams, length of average projects,
reduced project expenses, streamlined

white paper

Rethinking ROI in the Age of the Social CIO

If you want to expand your


influence, you need to be open
to other peoples ideas. . . We
want to foster collaboration
and community.

Ed Marx
Texas Health
Resources CIO

processes, and the number of duplicate


initiatives identified and avoided, compared to pre-ESN days.
3. Collectively problem-solve and
crowdsource best practices. The
question-and-answer metaphor has been
proven compelling by a variety of public
social networks. When used as a private
and secure communication environment
for a company, it can be equally effective
in identifying solutions, which often come
from unexpected places. Crowdsourcing
is proving to have extraordinarily powerful
benefits.
Our clients benefit because we use
Yammer, says David Glaubke, director of
Corporate Communications for ReachLocal. For example, our Internet Marketing
Consultants (IMCs) can tap into the collective knowledge of the entire companynot
just of one or two peoplewhen seeking
advice or learning about best practices.
Value can be measured in the quantity and
speed of deliverables compared to historic
trends, and cost avoidance savings on contract personnel.
4. Organize like-minded people
around topics of common interest
to create community, fulfillment and
centers of expertise. Experienced users
say that ESNs work best when everyone
finds a reason to participate, even if the
engagement is outside the immediate
sphere of business. Online communities
strengthen relationships between employees and lead to innovations that wouldnt
occur if people remained isolated.

At Texas Health, a group of employees


started a group called Go Green to talk
about ways to live and work in a more
ecologically sustainable manner. Its like a
small town within a 20,000-person organization, Marx says. Ideas generated from
those discussions are now percolating
upward in the company. The secret is to let
such initiatives grow organically so that the
best ideas bubble to the top.
Success can be measured by improved
employee satisfaction scores, reduced
turnover rates, lower absenteeism and
increased participation in workplace programs and activities.
5. Spur innovation, which rarely
happens in a vacuum. It works best
when people trying to solve a problem can
get outside their comfort zone and think
differently about solutions. When the collective creativity and experience of a large
group is empowered, innovation emerges
from the many connections and informal
brainstorms that such an experience provides. Social CIOs recognize that innovation
cant be imposed from above. They create
environments in which brainstorming is
encouraged and participants arent penalized for disruptive ideas.
Customers and business partners can also
be brought into conversations to broaden
the innovation circle. The best ideas flourish when the people who ultimately use
the products are involved in their evolution.
Yammer has become an idea hub at the
American Automobile Association of Northern California, Nevada and Utah. New and
innovative ideas are constantly discussed,
and policies are debated. Even people who
dont actively participate in discussions say
they get ideas simply by listening.
Among the ways to measure benefits are
the quantity and quality of suggestions
contributed by employees, cost savings
achieved through internal rewards programs
and revenue derived from new products.
6. Reduce time to market; shorten
response time. The more potential
sources of a solution are brought to bear,
the more quickly problems get solved.
Time that would have been spent searching for solutions is instead applied to
putting them into practice.

Social networks are people-centric. In


essence, they are the chance corridor
meeting or the informal question posed
to the person at the next desk, writes
Capgemini CTO Andy Mulholland. The
problems they solve are the unexpected,
unplanned and unstructured events that
come up in their daily work, and they
enable an individual to get a response to
that all-too-frequent question, Who knows
the answer to this?
Among the ROI metrics that can be evaluated are improvements in market share,
reductions in product development cycle
times, increased customer satisfaction
scores and increased win rates of proposals.
7. Improve employee engagement.
Research documenting the positive correlation between employee satisfaction,
productivity and corporate performance is
voluminous and dates back to the 1920s.
Turnover rates are lower, people are more
invigorated and positive morale boosts the
spirit of everyone in the company. Businesses perform better when employees
understand and take quiet ownership of
the company mission. ESNs transcend
organizational hierarchies and empower
people to feel engaged with the business.
Wheres the business value in this? In
addition to syndicating strategic decisions,
ESNs give employees a clear idea of
how their efforts contribute to meeting
shared goals.
In a study of Molson Coors use of an ESN,
Towers Watson found that 87 percent of
the employees said the company had a
clear vision for the future a year after
adoption, up from 73 percent a year earlier.
That was in contrast to a 1 percent decline
in the same metric for a global population
of high-performing companies.
By attaching faces and names to activities, employees better understand whom
they work with and what shared goals
the organization has. This leads to more
honest communication. At insurer
Nationwide, Yammer has enabled senior
leaders to communicate more openly with
employees, fostering a culture of trust and
transparency. More than 40 percent of the
companys top leadership participates in
the Nationwide social network.

white paper

Rethinking ROI in the Age of the Social CIO

Among the metrics that can be used to


determine value are employee satisfaction
scores, membership in employee-formed
special interest groups, turnover rates and
participation in internal feedback loops.
8. Support learning and development. ESNs support a kind of grassroots
education in which people learn from each
other. Although not a replacement for
formal training, this ongoing, on-the-job
development constantly builds a companys inventory of skills in a context that
is directly relevant to the way the company
does business. Moreover, ESNs enable
cross-training and continuous learning,
transforming even the most staid and traditional companies into learning machines.
The Yammer ESN at Pitney Bowes is a learning gold mine, says Mike Petersell of the
companys Management Center for Learning
& Performance. What makes people most
successful is not what they learn from the
content of the programs we provide but
what they learn from one another.
ROI metrics include lower training/education costs, speed of problem resolution,
external awards and citations, reduction in
issue escalation and savings on customer
service costs.
9. Improve internal communications. ESNs contribute to this muchdesired goal in several ways. They are
designed to capture information in a
format that is public by default. People can
tag, bookmark, search for and subscribe to
information that interests them. Everyone
has access to the tools of publishing, which
vastly improves the speed with which
information permeates the organization.
People who need answers to their questions can get them in hours or minutes
instead of waiting days or weeks for their
problems to be published in a newsletter or a status report. Information sharing
is immediate, and the gathering of this
content into a searchable archive yields

a collective database. Tagging threaded


conversations with topics creates an institutional taxonomy organized by the people
who create and consume the information.
Social networks can also dramatically
reduce e-mail volume. Instead of receiving
updates on projects that no longer involve
them, they subscribe only to the people,
topics and groups that do. The benefits
work on the receiving end as well. Project
owners dont have to carefully compose
and maintain distribution lists but, rather,
simply post updates to a common area
where others can subscribe.
Value metrics include reductions in e-mail
volume, increased activity in businessrelated online groups, employee satisfaction
surveys, Net Promoter Scores, customer
service turnaround times, new business
closing times and lead quality scores.
10. Identify key performers. Every
organization has outstanding people
whose contributions receive little notice,
either because they prefer to stay in the
background or they work best by influencing others. ESNs unearth these contributions by revealing the conversations that
lead to productive outcomes. In doing
so, they help address one of the most
common reasons for employee turnover:
people dont feel recognized or appreciated. Using ESNs such as Yammer, managers can more easily identify the rainmakers, give public kudos, point to role models
and ensure that top performers are recognized appropriately.
Among the relevant measurement metrics
are performance evaluation scores, promotions, turnover rates and retention rates.

Realizing the Potential


of the Social CIO
Corporate IT organizations have historically struggled to achieve high approval
ratings, because of their function as gate-

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keepers and rule-makers. They now have


an unprecedented opportunity to remake
this perception. One key to success is to
recognize that the rules of technology
selection and assimilation have changed
forever. Users now carry technology in
their pockets thats more powerful than
corporate mainframes of 30 years ago.
Whats more, innovations in ease of use
and collaboration are increasingly taking
place in the consumer sector, with the
best ideas percolating into the corporate
mainstream.
Social CIOs are a new kind of business
leader. They recognize that their authority derives from empowering everyone
in the organization to apply information
technology to their business. Amid an
explosion of technology, Social CIOs dont
try to legislate decisions. Instead, they
guide, educate, support and enable smart
choices on the part of their constituents.
This new dynamic may cause some discomfort for traditionalists, but it is the only
way to manage technology proliferation in
an environment in which everyone is effectively an IT professional. The good news:
Social CIOs are in a position to achieve the
business leadership status that has eluded
senior IT executives for many years.
In a world of constant collaboration, traditional return-on-investment metrics are
insufficient. Ample evidence is emerging
that organizations that instill collaborative
cultures and transparent communications
are more productive, move more quickly
and achieve business results superior to
those of organizations that hew to moretraditional models. Social CIOs take a creative approach to ROI measurement. They
recognize that an empowered and engaged
workforce is the engine of successful companies, and they seek measurements that
recognize the responsiveness, creativity,
and competitive and time-to-market benefits of an organization that values human
capital as its most precious resource. n

www.yammer.com

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