The ROI in Enterprise Web 2.0 and Corporate Social Networking

by 30 Oct 2008

Few social phenomena of the past decade have rivaled social networking and Web 2.0. Websites such as LinkedIn, MySpace, Facebook, Wikipedia and in India, Orkut, have attracted millions of users of all ages and backgrounds. For “social” networking and public information sharing, these tools have been spectacularly successful. It only stands to reason then, that the technology might be used for professional or corporate use; for networking and knowledge sharing – behind the firewall, so to speak.

Corporate Social Networking (CSN) is the most common term being applied to the rising use of professional networks inside organisations. Blogs, Wikis, threaded discussion boards and other “Web 2.0” tools have made their way onto intranets for corporate use in knowledge sharing. Best practice in CSN and Web 2.0 technology does not yet exist, however, nor is there a generally accepted model for its implementation or who should own it in the organisation.

In an attempt to uncover emerging practices and early indications of the value of corporate Web 2.0 and CSN tools, the Human Capital Institute (HCI) and Cornerstone OnDemand Inc, a talent management suite provider, conducted a survey of HCI’s senior HR membership on leveraging social networking & Web 2.0 collaboration tools in various enterprises. The main objective of the survey and subsequent interviews was to understand the role and impact of Web 2.0 collaboration tools in organisational social networking and knowledge-sharing.

At this stage in the development and implementation of corporate Web 2.0 collaborative tools, users can still be labelled early adopters. And just as early adopters of online job boards reaped benefits and competitive advantage a dozen years ago or so, organisations that implement and master Web 2.0 tools today, including CSN, can expect to gain similar, if not even greater, advantages. In most cases, however, it is safe to say that the Web 2.0 tools being used remain outside the corporate firewall. Nevertheless, they are being put to business purposes, Facebook, for example, allows for the creation of private networks and LinkedIn has proven to be a powerful recruiting tool. In neither case is it necessary to license and install any application.

From our results, it would appear that corporate Web 2.0 and CSN tools are still experimental in most of the organisations that report their use. As above, most of that use falls outside formal practice and certainly outside “the firewall”. The three greatest barriers to using Web 2.0 tools, according to our respondents are user adoption; other priorities taking precedence; and the difficulty in building a compelling business case for their use.

Time will address the first barrier as more young people who have grown up using the tools enter the workforce and this, in turn, should move Web 2.0 tool adoption up on the priority list. The third main barrier – making the business case – was the focus of our research. To do that, proponents of the technologies need to demonstrate Return on Investment (ROI).

There clearly remains much work to be done in identifying the ways and methods to determine ROI and tangible value from corporate Web 2.0 and CSN investments. And while little research has been done to quantify the ROI in CSN and corporate Web 2.0, that which does exist is compelling, as in the statements of value in Web 2.0 made by so many of our survey respondents. Our respondents believe that Web 2.0 tools will finally allow them to access the rich content and corporate memory that proves so elusive in most companies. Respondents believe that this information, including tacit knowledge, can benefit the organisation significantly.

Our survey results show that the decision to use social networking and /or other Web 2.0 tools now or in future is greatly influenced (84 per cent) by the demographics of the workforce. As the typical workforce is spread more and more around the globe, organisations are looking for tools to keep teams together virtually. Their goal is that performance and learning should not suffer because of physical distances between the various members of the team.

Despite some skepticism, Web 2.0 tools are likely to be among the high-demand applications of the next generation of employees. Our research showed a significant difference in Web 2.0 adoption and perceived benefit – personal and for business – between younger workers and older workers.

Clearly, the tools will play a critical future role in human resources and talent management. They can provide a common communications platform for employees, allowing them to share information, knowledge, ideas and to collaborate online. Moreover, the tools are likely to become essential in attracting, on-boarding, developing and keeping the next generation of talent.

By Allan Schweyer, president of the Human Capital Institute