RightNow is Enabling Further Government Adoption of the Cloud

July 7, 2009 at 2:35 am · Filed under FASTforward'09

As I have written here on several occasions the US Federal Government is providing leadership in moving to the cloud (e.g., What will be the Business Model for the Cloud as Data and Content Storage Becomes a Utility? and MIT Sloan CIO Symposium: Part Two: CIO Leadership and the Bottom Line). Recently, I spoke with Kevin Paschuck, VP Public Sector for RightNow and their CIO, Laef Olson.

RightNow provides a cloud-based CRM solution that I have covered before (see for example, RightNow Nov 08 Release Focuses on Call Center Agent Support and Barack Obama’s Answer Center – Campaign CRM from RightNow). They do a lot of work for a number of US Government agencies, with over 155 public sector clients.

In April they released a new, highly secure, defense-ready hosting solution designed to support both the Department of Defense (DoD) and other civilian government and intelligence agencies that require stringent, evolving levels of compliance and security. Because the DoD requires a strict level of security, RightNow’s new hosting capabilities use DITSCAP/DIACAP to ensure compliance with DoD Instruction 8500.2, meet US Federal security standard FISMA (NIST 800-53) and include a 24×7 dedicated security and information assurance team.

We spoke on how they are helping the government move further into the cloud with this offering. Kevin said that 70 percent of their government clients are using a cloud solution and this percentage is increasing. In contrast, all of their private sector clients are using a cloud solution. Now RightNow is working with their government clients to take the remaining 30 percent into the cloud.

There are several obstacles to overcome. First, a number of their government clients are military agencies and sensitive military data needs to run on the military network with a .mil extension. To do this the data must be hosted on a military base or you need to get a waiver. Second, there is the general government reluctance to go to the cloud for security reasons.

I asked Kevin how the current 70 percent of government clients are able to use the cloud. He said that many of these are for less sensitive data such as HR self-service of pubic information systems such as the AKO Army Knowledge Online site shown below.

insert picture 2

Many federal CIOs are anxious to get to the cloud to save money and get more flexibility. I observed this myself at the MIT Sloan where Elizabeth Hight, Rear Admiral, Vice Director Defense Information Systems Agency (DISA), said she was a supporter of the cloud and virtualization to save both time and money. Kevin mentioned that RightNow is teaming with Elizabeth and DISA to host RightNow applications in their hosting center so they meet government regulations. This is one way they can meet the .mil requirement. Here is another RightNow application for the US Army Human Resources Command.

They have also covered 90 to 95 percent of the certification requirements that run across agencies so it takes less time to customize the application to meet the specifics of each agencies certification requirements. The government is also trying to standardize cloud issues. The National Institute of Standards and Technology, a non-regulatory arm of the US Commerce Department, has helped by developing a draft definition for federal use of cloud computing. They may be a bit ahead of the private sector here. Here is a non-military RightNow application for the Social Security Agency.

In another example, the U.S. Air Force Personnel Center (AFPC) is moving its on premise RightNow solution to the new highly-secure, Department of Defense (DoD) SaaS solution.  With the new RightNow cloud-based application, more than 100 AFPC agents can provide accurate, up-to-date information across multiple touchpoints to military and civilian employees of the U.S. Air Force.

The system also provides the AFPC website with a self-learning knowledge foundation. In addition, it monitors constituent feedback, disseminates consistent information, and easily updates content to ensure relevancy. The application has reduced inbound email by guiding constituents to submit questions via the web, where it is converted into an incident that AFPC can track and respond to.

I am pleased to see greater government uptake on the opportunities the cloud brings. There seems to be a genuine drive to balance security requirements with flexibility, cost savings and reduce unnecessary red tape with standardization.

Comments (5)

Twitter – If going 2.0 is hard for you – This works

July 4, 2009 at 6:42 am · Filed under Adoption, Twitter

The other side of “Marketing” – head off problems immediately – solve problems immediately.  The NYT offer a great case study today about what this means for the travel industry.

As hotels, airlines and other travel companies line up on Twitter to promote their brands, customers who voice their grievances in the form of tweets are getting surprisingly fast responses for everything from bad airplane seats to poor room service.

Take Tony Wagner, 34, a new-media director for an academic group in Washington. When he found out he wasn’t seated next to his wife and 2-year-old daughter on a JetBlue flight to San Francisco over the Memorial Day weekend, he first called up customer service. But the agent told him to take it up at the gate. So Mr. Wagner indirectly sent JetBlue a message, by posting a plea for help on his Twitter account: “@jetblue Advice to get both parents and 2 yr old seated next to each other on flight later today? Right now only one parent. Full flight.”

Exactly 19 minutes later, JetBlue tweeted back, suggesting they correspond privately, using Twitter’s “direct message” feature: “@tonywagner Please follow us so we may DM!” After a brief exchange, JetBlue flagged his tickets as a priority concern.

Mr. Wagner suspects he received better service because of Twitter’s viral nature. Twitterers habitually “re-tweet” one another’s posts, not unlike forwarding an e-mail message to everyone in your address book. Companies, he said, “want to head off the conversation as quickly as possible,” adding, that “it’s in their best interest to make people who have a pulpit happy.”

JetBlue puts a more positive spin on it. Disgruntled customers “tend to be the biggest opportunities,” said Morgan Johnston, a spokesman for the airline who helps manage its Twitter account, which has more than 770,000 followers. “We can take that person aside and kind of pull them in and say, ‘Hey, you seem to be really upset in front of several hundred or thousand people.’ ”

That might explain why some customers prefer Twittering over contacting customer service directly. “Their reaction time is speedier than being put on hold,” said Sydney Owen, 24, a public relations intern from Chicago who recently tweeted about a Southwest boarding pass she had misplaced and received a nearly immediate response from the airline.

Comments (2)

Building the Enterprise 2.0 Business Case, One Collaboration at a Time

July 3, 2009 at 4:36 pm · Filed under 2.0 Design Thinking, Enterprise 2.0, SOA, Social Computing, andrew mcafee

When Harvard’s Andrew McAfee, the spiritual leader of the Enterprise 2.0 movement, first heard the term “Web 2.0″ back in the early part of the decade, he metaphorically rolled his eyes. After all, the much-hyped dot-com economy had just imploded, and the Y2K scare turned out to be a lot of fear-mongering.

As he recounts in his new book, Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges, his initial reaction to Web 2.0 talk was “Oh, give it a rest, would you?” He confessed that he ” wanted to spend as little time as possible investigating Web 2.0 because I was so convinced that it was nothing more than a new marketing buzzphrase invented by a vendor or member of one of the helper industries, and that it was yet another example of the tech sector’s tendency to put old wine in new bottles.”

However, exploring Wikipedia in 2005, he discovered that 2.0 was a phenomenon that had legs — and vast, untapped potential for the enterprise. McAfee states that the real opportunity behind Enterprise 2.0 isn’t the Internet, nor what the technology offers to entrepreneurs, venture capitalists, coders, or CIOs. Instead, Enterprise 2.0 holds profound promise for operational or line managers — who “have frequently been left out of IT discussions, which in my view is a serious mistake.”

The promises of Enterprise 2.0 include “significant improvements, not just incremental ones, in areas such as generating, capturing, and sharing knowledge; letting people find helpful colleagues; tapping into new sources of innovation and expertise; and harnessing the ‘wisdom of crowds,’” McAfee writes.

However, getting to Enterprise 2.0 and making it work for organizations requires high levels of commitment from management. As McAfee also points out in the book, “the benefits of Enterprise 2.0 are available to any organization. These benefits, however, are not automatic. Experience shows that it’s surprisingly difficult for people and organizations to move away from their current collaborative tools and habits and adopt new ones. Managers must involve themselves in this transition if they want it to be successful.” Many organizations, he adds, “feel that they’re currently stumbling rather than excelling” at Enterprise 2.0.”

Perhaps even the most complicated challenges — such as unraveling years of bad management decisions — could be tackled with greater collaboration, bringing all the minds of the business together.

(The first chapter Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges is available for free download here, with registration.)

Comments (12)

Assessing Productivity in a Networked Era – ROII (Return on Investment in Interaction)

July 3, 2009 at 2:37 pm · Filed under FASTforward'09

Jay Cross and I recently co-authored a version of this piece for CLO (Chief Learning Officer) Magazine.

While I believe that for many people today learning is work, and work is learning, I have edited this version to reflect the Enterprise 2.0 context as opposed to a learning context.

.

Today’s networked era requires a new way to make investment decisions that incorporates intangible assets and more accurately depicts how value is created.

The industrial age has run out of steam. Look at General Motors. Look at Chrysler. We are witnessing the death throes of management models that have outlived their usefulness.

The network era now replacing the industrial age holds great promise. Networked organizations are reaping rewards for connecting people, know-how and ideas at an ever-faster pace, and increasingly value creation has migrated from what we can see (physical assets) to intangibles (ideas that define products or services).

Understandably, seasoned executives are having a devil of a time shifting from the industrial age mindset of logic, certainty and bounded constraints to the network gestalt of interaction, self-organization, unpredictability and fewer limits to potential. The pressure is constantly on to meet quarter-to-quarter revenue and earnings targets, which accentuates the need to take decisions that support achieving those targets. At the same time, we are shifting into an era in which knowledge work and learning occur at the point where re-engineered business processes collide with a participative and interactive ecology of information flows.

One cherished industrial age concept that is proving particularly difficult to let go of is return on investment (ROI). But like Pontiacs and Oldsmobiles, old-school ROI’s day in the sun is waning. In an environment of continuous flow and interaction, there’s a need to consider an emerging metric: return on investment in interaction (ROII). The working definition of ROII is the observable development of capacity and capability to create economic values out of intangibles.

Of course, if you want to sell a big project internally, you’ve got to talk ROI. It’s the language senior managers understand. Being fluent in ROI talk addresses the “hard” tangible returns stemming from an investment in a specific project or capacity. It gets you to the inner circle of those who control budget dollars.  So, let’s look at what ROI was, how it needs to be changed and how to recapture its original intent for application in the network era, in which continuous learning and knowledge work are becoming inseparable. 

Traditional ROI 

ROI is an accounting and financial management concept businesses use to decide where to make investments and to assess the success of investment decisions after the fact. ROI reduces both return — R, what you expect back — and investment — I, what you expect to put in to numbers — making it possible to compare one investment opportunity to another. The numbers tie back to categories on the balance sheet and income statement, (i.e. tangible assets and hard-dollar returns).

ROI is what you get for your money, divided by what you spent to get it. It’s R/I expressed as a percentage. In a business culture that is skeptical of non-numerical reasoning, ROI implies disciplined, mathematical rigor. It ties actions to intended results. It shows the logic of how results will be achieved.  And, it’s also useful to note that it traditionally has been applied in stable (and often single-purpose) use cases.

Companies set up ROI hurdle rates to gauge whether there will be sufficient payback over a reasonable and defined period of time to justify the capital invested to acquire additional capacity or produce a defined result. Companies also use ROI to evaluate past performance. In retrospect, what was spent and what benefits were received? This simplifies making the case for similar projects in the future. 

What You Can’t See 

However, in the network era, often things you can’t see are more valuable than things you can. Thomas Stewart sounded a clarion call in his book The Wealth of Knowledge with his exhortation that building the capacity to create economic value through things such as innovating and enhancing brand reputation is as important, or more important, than generating specific results from a specific initiative. Twenty-five years ago, intangibles accounted for less than a third of the value of the S&P 500. Today, intangibles can make up more than 80 percent of that value.

“Intangible assets — a skilled workforce, patents and know-how, software, strong customer relationships, brands, unique organizational designs and processes, and the like — generate most of corporate growth and shareholder value,” wrote NYU Professor Baruch Lev in Harvard Business Review in June 2004.

Corporate decision makers say their goal is to increase shareholder value. In a networked, information-based environment, shareholders value brand, reputation, ideas, relationships and know-how. These assets don’t appear on the balance sheet, but more and more often they provide a corporation’s competitive edge. These most important aspects of the business aren’t recognized by old-school accounting and therefore aren’t factored into ROI calculations.

Organizations that make decisions based solely on things that are sufficiently tangible to be counted directly might as well consult a Ouija board to set their goals. Leaving the most important sources of value out of the ROI equation is not conservative — it’s foolish.

Measuring intangibles involves making judgment calls, so managers often exclude intangibles from their ROI calculations. Several purported authorities on calculating ROI suggest taking intangibles into account by putting them on a list but refusing to estimate their value. This leads you to comparing numbers to words, apples to oranges. 

You Must Manage What You Can’t Measure 

“You can’t manage what you can’t measure” was a mantra of industrial age management. Adopting F.W. Taylor’s brilliant research and models, generations of managers have carried stopwatches and pored over measurements in a continual quest to make things work better. Efficiency was the road to riches in the slower-moving, predictable industrial age, and measurement was the proof.  However, it doesn’t apply to making judgment calls, strategic choices or disruptive innovations.

Executives manage immeasurable things all the time. The more powerful the executive, the more likely he or she is involved in effectiveness — doing the right things rather than doing things right. Intuition, judgment and gut feelings guide these more important decisions. As almost everyone will recognize, qualitative assessment often can make up for a concrete numeric result.

Make a hypothesis of cause and effect. Interview a statistically significant sample of the workforce to see if the hypothesis holds up. Often, results obtained from social science research methods will produce more meaningful feedback than solid counts of the wrong thing.

The old “can’t measure, can’t manage” dodge doesn’t free businesspeople from making decisions under conditions of uncertainty, and the network era ushers in uncertainty in spades.

Making Decisions in the Era of Networks 

A business network is a group of individuals or organizations that are linked together by factors such as purpose, values, visions, ideas, financial exchange and collaboration to further the ends of the corporation. Business networks share common characteristics with all networks:

• They multiply rapidly because the value of a network increases exponentially with each additional connection.
• They become faster and faster because the denser the interconnections, the faster the cycle time. 
• They subvert (unnecessary) hierarchy because previously scarce resources such as information are available to all.
• Network interactions yield volatile results because echo effects amplify signals.
• Networks connect with other networks to form complex adaptive systems whose outcomes are inherently unpredictable.

Intangibles travel via networks, and networks are the infrastructure for doing business in the future. An overarching caveat here: Strategist and practitioner Stuart Henshall said trust is critical. “It’s the one qualitative factor all networks depend upon.”  Karen Stephenson of Netform reiterates … “Technology without trust is just traffic”

ROI, the tool we once used to evaluate projects in stable times, clearly is not up to the task. The impacts of collaboration-based knowledge work are accelerating. However, the Western world is lurching from crisis to crisis, and executives are under constant pressure to perform. It’s difficult for them to give up models they understand well.

In the future, organizational effectiveness will be defined by the interaction of workers in a networked environment. Exchanges of information and knowledge are what make peoples’ brains work on a purpose and what gets the imagination going to formulate pertinent responses. However, the return on networked collaboration is less tangible than the results generated from stable and ordered sequential tasks that dominate the efficiency-oriented industrial era.

So we face the problem of convincing managers to adopt new mental models that incorporate the intangibles generated by a whole system, the organization and its interconnected networks. Making a business decision to invest in new ways of working is a complex process involving many factors and intricate tradeoffs, such as: 

• Risks must be weighed against rewards. 
• Short-term vs. long-term aims. 
• Alignment with strategic initiatives. 
• Scarce resources call for shrewd horse trading. 

Identifying and Measuring ROII

The focus in this new world of work is to do what’s important and involve those who know what’s important, why it’s important and what they know (or know how to find out) about a problem or issue. To begin measuring increases in productivity and value in a networked social computing environment, we propose return on investment in interaction (ROII), derived from the principles of Metcalfe’s law of networks (which is still being debated, by the way).

Some core assumptions about ROII :

• Continuous flows of information are the raw material of an organization’s value creation and overall performance.
• Information flows are carried by links, alerts, RSS feeds, search engines, aggregation and filtering of content.
• All leading vendors’ productivity platforms now feature collaborative social networking and computing as the core of the platform
• These platforms’ architectures facilitate purposeful cross-silo communications and exchange.

In a June 2008 “The Network Thinker” blog post, social networking pioneer Valdis Krebs outlined four generic metrics that are becoming widely accepted as leading to observable, tangible measurable outputs:

• Increase in size of network. 
• Increase in internal network connectivity. 
• Increase in connection to valuable third parties. 
• Increase in number of projects formed from all three factors above.

It’s important to note here that we are not proposing a definitive answer, but rather the need to debate and clarify the issues. Each of the principles outlined above proposed by Krebs addresses the productivity of network activity. Unpacking them can help us understand how to begin to assess ROII.

Increase in Network Size]

If we follow the logic of two heads are better than one, and therefore X heads are better than two, in social- and knowledge-building networks, we can expect to find:

• More engagement with an issue.
• More analysis by more people.
• More input from more people.
• More possibilities that may have been overlooked.
• Quicker and more comprehensive analysis.

CapGemini’s relaunch of its knowledge management initiatives offers a great example.

Its original KM program wasn’t working: 20% year-on-year usage decline, and the average age of documents was 3 1/2 years.  It was taking an average of 7 years to refresh current knowledge.

It relaunched informally via word-of-mouth and within 6 months had 27,000 of 83,000 employees using it.  They were involved in 900 communities, exchanging information and pertinent knowledge on a daily basis.

All that activity happened without spending a single dollar on formal internal communications or training.

Increase in Internal Network Connectivity 

Increases in network connectivity involve the degree, frequency, density and concentration of information flows between nodes in a social network. The organization is able to define better business and market intelligence, more frequent and tangible customer centricity and responsiveness, and clear instances in which cross-silo knowledge exchanges lead to tangible results.

At CapGemini, six months after the informal launch, the 900 communities of practice were using 500 forums, 500 wikis and more than 250 expertise- or project-focused blogs. Business results as defined in the previous paragraph are not long behind.

Increase in Connection to Valuable Third Parties 

In today’s increasingly interconnected environment, ignoring external parties that have an interest in products or services is a guarantee for trouble. These interested parties talk about brands or offer up opportunities, and organizations that respond rapidly and effectively to issues gain competitive advantage.

Ford Motor Co. opened up its launch of the new Sync service to customer input and conversation. With 1 million page views in less than 12 months, the company experienced a significant reduction in customer-service support costs as 10,000 customers began to offer each other tips, pointers and answers. Further, it began to receive significant tangible market intelligence as engaged users began to share product integration and compatibility experiences, tips and tricks. 

Increase in Number of Projects

ROII is obvious when the scope, degree and intensity of interaction increase due to implementation of the three above principles. An increase in the number of projects creates value as people learn to work together effectively in networks, putting informal learning to work on resolving issues, creating opportunities and generating activity that enhances an organization’s reputation for listening and responding effectively.

Fast Company recently published an article on Cisco Systems’ large-scale adoption of social computing as the main means of working with information and knowledge. CEO John Chambers said that as a result, Cisco has gone from being able to focus on three to five strategic initiatives at a time, to now working on numerous strategic initiatives in parallel. 

Informed Judgment 

The heart of the matter is providing decision makers with an informed business case that ties investment to the results that it brings. A solid case describes results in business terms, such as increased revenue, better customer service, reduced cost or speedier time to performance.

Network returns are asymmetric, so simplistic count-’em-up approaches are no longer viable. But how can one make a solid network-era case to an executive who is still playing by yesterday’s rules?

The answer is to improve the corporate network as a continuous process, not as a project with a hurdle rate. Improving network performance need not be all-or-nothing. It can be implemented in small stages. Break major decisions into numerous low-risk incremental decisions. Instead of making one major decision a year, CLOs might look at boosting network results as a series of monthly decisions. Continuous monitoring of the statistics of ROII would guide mid-course corrections.

Create a hypothesis and use existing techniques — surveys, focus groups, facilitated brainstorming — to find out what employees and customers are doing and how they want to work together. Then, check it out with a wider sample of the workforce to see if it holds up. It’s clear we are moving rapidly into a networked world in which responsiveness, innovation, gaining competitive advantage through learning faster and embedding knowledge into products and services are all important.

In a world of intangibles, we need to contribute to the productivity, viability and profitability of any given enterprise. We should rethink and expand our methods for making judgments about where, when and how we invest in the ongoing interaction between our employees and customers.

Such judgments lead to and support initiatives where innovation and economic value is being created.

That is the return on investment in interaction.

.

Comments (7)

Enterprise 2.0 ‘Changes the Game’ for Business Process Management

July 2, 2009 at 8:37 pm · Filed under Enterprise 2.0

No matter how automated a workflow may get, there are always stages in which things need to stop for an exception, an approval or a quality check. The role of human interactions has always been a complicating factor in business processes. Introducing Enterprise 2.0 approaches may help shift the emphasis from business process re-engineering to business process re-energizing.

Pete Swabey has documented instances in which major companies started addressing critical business problems with enterprise 2.0 approaches. There is growing evidence that social software is changing the way companies design and execute business processes.

For example, at Aviva, a UK-based insurance company, employees have been collaborating online around “smart spaces” to come up with new ideas.

To quote Toby Redshaw, CIO of Aviva:

“A good, well-positioned Web 2.0 platform bypasses the obstacles in a hierarchy; it changes the game. You want expertise to be virally available. You want smart interactions to happen horizontally, not up a hierarchy, across a boundary and back down.”

Enterprise 2.0 approaches synch more closely with human interaction across enterprises — something traditional business process re-engineering misses. As Phil Gilbert of Lombardi Software put it, business process re-engineering is “a rigid sequence of events is one that does not suit human beings. The traditional notion of a business process comes from the manufacturing world where you can standardize the inputs and outputs of a given process.”

Harvard’s Andrew McAfee, the guru of Enterprise 2.0, pops up in Swabey’s article as well, explaining how typical business processes are too inflexible for exceptions. Enterprise 2.0 tools can “help employees work together to manage  unexpected exceptions to business processes.”

You know organizations are getting serious about Enterprise 2.0 when people start talking about building social networking into business processes.

Comments (14)