Within Social Media Week London 2013 The Patchwork Elephant Team ran an event discussing the future of Social Business (or what some people call Enterprise 2.0) - about using social tools inside as well as outside the organisation, for internal and external teams to collaborate, to make business more effective. We ran a similar event within the February 2010 edition of Social Media Week London. We called it "Social Media in Enterprises - The Elephant in the Ecosystem" and we used a patchwork elephant to symbolise the theme - it's a patchwork elephant because it's very large, in the room, but it's hard to see the whole thing! Business models are changing, and social technologies are ever more important in the way we work, but where are we really? 8 Different speakers asked: * How has social business evolved? * What is the current state? * How does social integrate with our systems and processes today? * What are the challenges for implementation and achieving success? * Where are we headed? Our speakers were: Alan Patrick - Broadsight (and The Patchwork Elephant Team) Janet Parkinson - Technotropolis (and The Patchwork Elephant Team) Will McInnes - NixonMcInnes (author of Culture Shock) Mat Morrison - Starcom MediaVest Group (World's Oldest Living Social Media Guru™) Luis Saurez - IBM (famous for living outside of the inbox) Neil Usher - WorkEssence Anne-Marie McEwan - The Smart Work Company (author of Smart Working: Creating the Next Wave) David Terrar - D2C (and The Patchwork Elephant Team)

1. Social Business
The Patchwork Elephant Revisited
September 2013
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2. Contents
• 3 years ago
• What is the situation today?
• How will value be created by Social Business
• The next 2 – 10 years
• The next 30 years
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3. 3 Years Ago
Conclusions from the first Patchwork Elephant session in 2010
•“Demand Generation” will be the early win
•We have "Peak Organisation" - organisations designed on 18th century
principles are just not fit for purpose today
•Differences between corporate hierarchy networks and the "real" networks
that make things work are laid bare
•Social network projects growing "au naturel" in an organisation are patchy
and have a few massive nodes, who cause mass failure if taken out.
•Traditional hierarchies are orthogonal to social media structures – resistance
may be futile, but it will be strong.
•Need to aggregate an emerging body of knowledge about what works and
what doesn't.
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4. What have I learned over the last 3 years?
Client work we have done shows that:
•Social Business is systemic – you have to connect the front end activity with
the back end at a minimum…
•….and ideally it has to flow through the internal communication chains too…
•….but its not going to go away.
•Its very hard to connect companies in a value chain, “EDI 2.0” methods work
better
•“Enterprise 2.0” systems won’t work if the “Enterprise 1.0” technology isn’t
working.
•Culture follows commerce
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5. Situation Today
Business Value Chain – Social technology Heat Map
New
!
Marketing
Sales
Produce
Deliver
Monitor
Service
Procurement
Finance
Human Resources
IT Support
Research & Development
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6. How will value be created?
Average
Sale £
Sales
Volume
Primary Impact – reduces loss of
existing customers and revenue
Operating
Cost
Total Value
Created
Primary Impact – increased
attractiveness/ recruitment increases
customer base
Churn
Increase
Revenue
Secondary impact – a better
reputation allows a higher value
offering to be attractive
Primary Impact – lower costs of
attracting & serving customers if both
losing less and gaining more
Close link
Reduce
Costs
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7. The Next 10 – 20 Years
Potential Productivity Improvements by Industry (i)
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8. The Next 10 – 20 Years
Potential Productivity Improvements by Industry (ii)
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9. The Next 30 Years – “Peak Organisation?”
Ronald Coase – Theory of the
Firm
But Social Technology reduces
the transaction costs….
Question: Given that “production
could be carried on without any
organization at all”, and given that
“the price mechanism should give
the most efficient result,” why do
firms exist?
The Question stays the same why do firms exist?
Coase’s Answer: Firms exist
because they reduce transaction
costs, such as search and
information costs, bargaining
costs, keeping trade secrets, and
policing and enforcement costs.
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What are the emerging Answers?
•Internal efficiency less important
than created value
•You can contract out easily and
effectively for algorithms. Very
difficult to contract for heuristics
•Not all transaction costs are
controllable by technology, some
will remain (eg global supply
chain).
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10. The Next 30 Years – Predicting the unpredictable
There is only so far you can go with interpolation and projection,
sometimes you have to look at a predicted endgame and see how it might
occur
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