Technology of any kind isn’t very useful to us unless it’s put to work. This is where one of the most interesting new parts of the social media landscape has been forming, namely in the new field of social business intelligence. This is the discipline of monitoring the whole of the social media world while continuously deriving insight from the aspects of it that matter to you, strategically or tactically, depending on your needs. I say aspects instead of conversations, because while analytics will give us useful metrics, it’s only until we apply the lens of business intelligence to the data itself can we clearly see the deeper and larger scale implications for our businesses.

That’s not to say that there isn’t a lot of blur between social analytics and social business intelligence. They’re both relatively nascent fields that have plenty of overlap. So where social analytics is about the measurement and data mining of the social universe for any reason, social business intelligence is concerned with a more holistic process aimed at specific business outcomes, depicted conceptually in the visual below.

To be sure, there are many different flavors of social business intelligence just as there are many reasons why organizations will want to create business processes around the feedback loop that forms. Currently, many of the processes involved are manual and ad hoc as the industry has felt its way forward and learned how to engage more meaningfully with social media. A few companies on the leading edge have increasingly formal social business intelligence processes based on sets of capabilities they’ve acquired or built. Other firms have hardly any technology at all, other than perhaps some reports and spreadsheets.

They are all seeking the same thing however: To pinpoint the opportunities and identify the events that matter most to them so they can engage. The actual response to social business intelligence insights will vary entirely based on what is learned. It can be strategic and affect how the companies evolves its products and services or the way it engages in entirely new and innovative ways with customers. Or just as likely, it’s on-the-ground insight that drives individual interaction or collaboration with prospects, customers, business partners, and others whose current and past activities social media have been identified as important.

Developing your social business intelligence capability will be a journey that will have stages, like any other process of development. For most organizations, it’s just a set of experiments at the moment. But over time, with hard-won lessons learned, it will become more formal and institutionalized. Usually too soon, the question of centralization will come up, since it’s often one of the experiments in a particular corner of the organization or another that will have significant success. It almost certainly will be asked if it makes sense to share this best practice and locate it in the social business unit or other centralized social media management capability. For now, encouraging decentralized experimentation is more important than achieved the economies of scale, since local successes are rarely likely to meet the whole organization’s needs. What’s most important is making as many discoveries as possible about what works and what doesn’t.

Right now we are tracking a rapidly growing and expanding set of providers of social business intelligence. Products like Radian6, Kontagent, and SAS Social Media Analytics are just three examples out of many of social analytics tools that also provide some level of deeper social business intelligence features. Over the next few years, there will be numerous entrants into this space, as well as additions to existing social media services, as the industry as a whole learns the ways that companies can turn their social engagement with the world into real opportunity and value.

Often starting as a secondary requirement of early social media monitoring and listening efforts, for now, these are the leading drivers behind social business intelligence capabilities:

Drivers of Social Business Intelligence

• Marketing Optimization. Marketing has long been an early adopter of social media, and it’s no different with social business intelligence. Now instead of reports and dashboards that merely show the what, marketers can find out the why. With social business intelligence, companies can craft much more detailed yet fully integrated qualitative pictures of the inbound funnel, identify why engagement strategies are working or not, and organize systematic, yet mass-customized responses in scale.
• Capturing Ideas and Unmet Needs. Going beyond the trend analysis of analytics allows the processing and isolation of the deeper implications of social media activity. Social business intelligence can capture innovation, new ideas from the marketplace, identify customer wants and desires, and identify the gaps in your organization’s services.
• Situational Awareness. Identifying and tracking the top trends, understanding when critical situations arise to protect customer experience or brand, and much more. Going well beyond low-level analytics, social business intelligence can help make sense of more data than any manual or raw analytic process ever could.
• Customer Care Opportunities. Fully empowering Social CRM, social business intelligence can augment the interaction with customers in social media by improving the triage, prioritization, and resolution process of customer care.
• Sentiment Analysis. While social analytics can provide some basic insight into a customer’s state of mind, only more sophisticated methods can semantically process and assess the actual meaning of the social media conversations involving your company or its products in order to derive actionable insight.

As I pointed out recently, the focus of your social business intelligence efforts will be rooted deeply in business-specific motivations, thus these are just a small sample of the ways organizations will employ the capability. To give you a better sense of the possibilities I will explore specific examples of companies employing the strategies above successfully in upcoming posts.

What does all this mean for you now? In my opinion, it’s virtually certain at this point that social business intelligence will become a vital component of the way that companies derive bottom-line benefits from social media including revenue growth, innovation, cost reduction, and more successful line-of-business operations. So connect to the world, start your experiments, and start learning how to make it work for you.

I was sorry not to be there in person, but following the San Francisco event via the web gave the impression of a well-attended event and a still-growing community of vendors, consultants and users. But, there were also signs of impatience and defensiveness. It hosted some good discussions about implementing enterprise tools, and it was nice to see Susan Scrupski’s Adoption Council active in many of these debates. Dion Hinchcliffe shared a typically comprehensive and, I think, very useful presentation about overall implementation methodologies, and there were also a few interesting case studies. But the debate about business value and how these technologies play into the future of the workplace and organisational design seemed to me to be quite basic and also rather polarised.

The conference devoted an entire session to disproving the critique of a single blogger, Dennis Howlett, that claimed the field is without merit, and companies have more important things to worry about, such as continuing with large-scale CRM or ERP projects. Read-Write web (politely) labelled this a straw man argument, and to my mind, Andrew McAfee and other respondents had already answered this back in early September, so I was surprised it got so much attention.

There was also a lot of talk about process, and whether or not E2.0 supports it. Nenshad Bardoliwalla wrote an intelligent post about the need for strategy-driven execution, and argued that E1.0 will continue to exist alongside E2.0. Oliver Marks and Sameer Patel ran a session about making a case for accelerated business performance using E2.0; Oliver followed up with a post asking where’s the beef? in relation to a clearly stated value proposition for E2.0, whilst Sameer chipped in with a well written and detailed post arguing for greater focus on supporting and improving ‘traditional’ process performance. Each made some good points.

Andrew McAfee’s keynote spoke of signs of progress and a shift from business skepticism to acceptance of enterprise social tools, but he also offered a few words of advice on things to avoid when trying to bring companies on board. These included sensible warnings against arguing that all existing models and tools will become obsolete – including email – and against ‘featuritis’; but he also suggested that the use of the word ‘social’ is problematic and to be avoided, because it carries serious negative connotations for many a “busy pragmatic manager.” His slides even implied a link between the term social and the twin evils of Marxism and Woodstock, which is ironic given that it was the post-Woodstock baby boomers who ran the banks aground requiring state intervention.

If Enterprise 2.0 is all about selling software tools, then I might agree that we need to simply parrot the language we are hearing from potential buyers. But selling, and even adopting tools, is not why we are here. We are here to improve and update the way people operate and interact with businesses, or perhaps as Karl Long put it recently, to re-write the business operating system. Indeed, it is partly this over-emphasis of the role of software in the definition of E2.0 that led us towards adopting the broader term social business design.

Actually, I think the emergence of reactionary positions such as avoiding the word ‘social’ so as not to scare the horses, or suddenly believing that ERP and CRM were ‘good’ innovations just because businesses are still buying them, or even that management by repeatable process actually works, is proof that we are on the cusp of change. As Stowe Boyd mentioned in an excellent contribution to the debate, this is a feature of a paradigm shift:

[Thomas] Kuhn … makes the case that the old paradigm — in this case the conventional establishment IT perspective of functional silos and silo-based business processes — cannot effectively disprove the new paradigm, and vice versa.

It is precisely at this point in the cycle that there appears to be the greatest dissonance between old and new paradigms, and this causes some people to lose their nerve and seek assimilation in the comfortable old ways that seem to be so safe and uncontroversial. Also, at this point, we see an influx of people coming from the old paradigm, such as CRM, CMS and ERP consultants, who continue to see the world in terms of their existing product categories and lenses.

Dennis Howlett, in a follow-up post seeking to claim credit for the debate that he began with his initial post, concluded:

It is good to see that in the discourse even my sharpest critics have acknowledged the emphasis and use of ’social’ as a dreadful mistake.

Is the word ‘social’ unbusinesslike? Well, of course not, and you will rarely find a senior manager who does not agree that business is also social, people buy from people, etc; and it is very hard to think of a more accurate term to describe harnessing people and networks for business. But that doesn’t those much lower down the value chain falling over themselves to come across as more Gordon Gecko than the managers whose language they imitate.

What counts here is outcomes, not terminology, prejudice or ideological insecurities. If we are communicating the value proposition of E2.0 or social business design simply in terms of labels, then we will not get very far. There is plenty of evidence that the move towards socialising business, by which I mean making smarter use of people and networks to create value, produces excellent outcomes. There is also plenty of evidence that much existing business practice, such as the ERP systems Dennis talks about, are often not worth their exorbitantly high cost.

How about process? Well, some of the newcomers to this debate may not be aware, but there is a lot of prior art regarding the relationship between social business and process. One of the key drivers of social business is the idea that the mid-to-late C20th was guilty of valuing process over people, based on factory thinking and Taylorism, and that this has caused both an inflation in internal costs around process management, and a reduction in productivity and performance as people are disincentivised to use their initiative or take personal responsibility for outcomes. Anybody working in a large corporation today can tell horror stories of how the simplest activities can take weeks and costs a fortune because inefficient and sometimes unnecessary process has gradually built up around what should be simple tasks. This is one of the greatest areas of potential cost saving in business today, largely because the assumptions that underpinned the development of this way of working no longer hold true. But over the longer term, this is also one of the greatest sources of value creation as employees and networks become more productive and collectively intelligent.

This is not to suggest process is no longer important – far from it. Within the E2.0 field, there has also been some good thinking about the importance of embedding social interaction within the daily flow of work, to support concrete use cases and workflows. Indeed, finding better ways to support necessary business processes is a core part of our methodology and value proposition.

I see social business and E2.0 as evolutionary, not revolutionary. But that does not mean that we should not be open to the idea of transforming and improving business structures, rather than just selling software under labels that buyers believe are safe choices. It is easy for commentators to stand up and claim to represent the business mainstream, but this is patronising to both business leaders (who are painfully aware of the limits of current IT-supported practice) and those of us who are actually practitioners in this field.

The one area where we agree, however, is that E2.0 has become too focused on software products, rather than business outcomes. My colleague Jeff Dachis gave a keynote at the San Francisco conference, placing social business in an historical context and making the point that IT is only part of the solution. I think this message is in danger of getting lost in a debate that is focusing too much on software categories.

At the E20 Summit in Frankfurt, we shall be discussing topics such as business value propositions, collaborative performance, internal communication, knowledge sharing, leadership, the power of feedback, organisational design and role of social tools in a downturn. Hopefully there will be less semantic posturing and more substantive ideas that can help us take forward our practice. You can follow the debate on twitter, or by taking part in one the experimental Google Waves that we are using for collaborative note taking and discussion – just search public waves for the tags ‘e20s’ or ‘e20summit’.