CRM is a Social Animal

On The Scene: Web 2.0 -- As enterprise social computing takes off -- and employees clamor for more -- CRM providers scramble to connect, as well.

By Lauren McKay

Social networking is really connecting, it seems: Revenue in the sector has grown 191 percent in the past year, according to IDC. Forrester Research predicts that Enterprise 2.0 spending will be a $4.6 billion industry by the year 2013. With increased momentum, rising adoption on the enterprise level, and noticeable marketing and branding opportunities for businesses -- all readily apparent at May’s Web 2.0 Conference in San Francisco -- social networking has clearly spread into the mainstream. Google’s effort to create its OpenSocial standard for application programming interfaces (APIs) among social-networking companies is another sign of a maturing marketplace.

Rachel Happe, Digital Business Economy researcher with IDC, is among those who think the next step with social networking will involve applying Enterprise 2.0 functionalities to business processes, such as CRM -- all in hope of finding the return on investment (ROI) for money spent getting wired into social networks.

"People are taking a functional business need that you can attach an ROI to, and using social media to experiment and see if they can expand ROIs," Happe says. She adds that employees are now engaging Enterprise 2.0 tools beyond those of blogs and wikis, and focusing more on social media with increased conversation on sites and platforms such as Facebook, MySpace, and LinkedIn. Employees, in their personal lives, are increasingly using social networks on the consumer level; that puts more pressure on enterprises to adopt social media applications, but it also breeds more familiarity.

According to the IDC report, "2007 Social Networking Takes Hold," authored by Happe, enterprise social media solutions have started to emerge and are passing up their small-to-midsize-business counterparts.

And not every enterprise social network has to rely on (or hook into) Facebook: According to a Time column by an executive of the search intelligence firm Hitwise, the aggregate market share of MySpace and Facebook among U.S. Internet users only accounts for roughly half of all visits to the Hitwise Social Network category. Hitwise lists more than 4,700 other sites in that category -- meaning there’s a lot of niche and specialized networking experience out there.

Take Trampoline Systems’ recent release of Sonar Dashboard, an entire social-computing platform created for enterprises. Sonar Dashboard is similar to Facebook only in that it allows users to connect with other users. However, Dashboard is designed specifically for the enterprise, allowing employees not only to create individual profiles, but to share information regarding work projects, contacts, and interests. User information is dynamically generated, providing the most up-to-date data for sharing. The Dashboard product also maps out relationships among employees in the enterprise, adding visualization to complicated, complex, and growing companies. (Oracle introduced similar enterprise social computing capabilities with the release of its CRM On Demand 15.) "You’ve got a generation of people in the workforce who are used to having these tools to search, reach out, and connect with anybody," says Charles Armstrong, the founder of Trampoline. "When they go into work, they’ve still got these information systems which are rigid. It’s the employees who are pushing the drive."

Analysts and vendors alike agree that the growth of business-side social networking can be attributed to consumer demands. And while real-time application of "social CRM" remains foggy, integration of enterprise and CRM software with social-networking platforms seems to have a sunny future. This is evident in solutions such as Faceforce, which puts Salesforce.com data side-by-side with Facebook profiles of customers, and that of Sales Social, a collaborative mashup from Kapow Technologies and Wavemaker that presents LinkedIn, Facebook, Salesforce.com, and Technorati customer data in one place. (See "Making Mashup Masterpieces," June 2008, for more about mashups.)

Other CRM products, such as Microsoft Dynamics CRM, are toying with social media in certain sectors before wide deployment. Microsoft Dynamics Connect Beta for Facebook, for instance, began with a community site for the finance unit of Dynamics. "The idea was that we were building up a unique set of communities tightly integrated to the product we use," says Craig Dewar, director of community marketing for Microsoft. "The assumption is that end users gain insight about [the] product by talking to other end users similar to themselves. They can talk about marketing campaigns, ask about CRM, and gain self-help," Dewar adds. (See "Is Microsoft Winning the CRM Race?" for our extensive look at Microsoft and its Dynamics CRM offerings.)

Happe says that linking CRM data with consumer-networking profiles will be the next step for CRM providers. Doing so can provide a lot of a value, particularly in gathering insight into the consumer mind. "CRM applications are clearly taking things more seriously," Happe points out. "In sales and marketing, it’s all about building trust and getting in to talk to people. What we’re learning is that you can use [networks] to build trust before you ever make an explicit request to speak with [prospective customers]."