The Yammer deal and what it means for Social Business Software

The not-so best kept secret was finally announced this week. This was fantastic news for the Yammer founders and Investors as they managed to sell their business to Microsoft for $ 1.2 billion in cash. (Over time Microsoft intends building this into their Office product).

For companies dealing in the Social Business Software space, their business cases are now more valid but more importantly CEO’s around the globe who don’t even know about Social Business Software must suddenly be sitting up and saying “What is this about, Why don’t I know about Social Business Software and why would Microsoft pay $ 1.2 billion for this Yammer business? That is 50-60 times their current revenue!”

While Yammer is a great product it doesn’t join all of the dots. I maintain that for a Social Business Software product to be effective and provide a real Return On Investment opportunity for the enterprise it has to be mapped to a companies vision and strategy. Through careful planning, strategic consulting and effective training this can be achieved. Worryingly many of the Social Business Software platforms don’t offer this and this will lead to deployment failure. The last thing you want is an internal Facebook! Business leaders will want to see how this tool improves the bottom line for their business, how it can achieve better efficiencies, better innovations and better client interactions delivered through the use of a Social Business Software Platform.

The link between becoming more openly innovative and effective Social Business Software deployment is something that has to be carefully constructed by both the vendor and the client.

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Creating your Organisational Tribe With Social Business Software

A national software development business in South Africa which employs a large number of people nationally. The business, Alacrity, is a well respected provider of services to the financial services industries.

As a result, the staff are oftentimes dispersed not only geographically but also at various large corporate financial services businesses with very different corporate cultures.

About six months ago, Alacrity deployed WyseTalk Social Business Software. Through the training offered by the WyseTalk team, champions were chosen within Alacrity who were tasked with driving this new communication and collaboration platform from within. As people became accostomed to this new paradigm, they started asking each other advice and solutions were quickly found from within.

One day, an Alacrity team member, Mary, had a problem with a certain type of report writing. Ordinarily she would have to email HR who in turn would have to find the person with the requisite skills. This process is highly inefficient as it could take days for them to make contact with each other. Furthermore, the time wasted would have been costly to the client and immensely frustrating for Mary.

Mary chose instead to post her question on the Alacrity community on WyseTalk and within minutes Jonathan, who was at a different client in a different province provided her with the solution. The CEO of Alacrity noted the quick assistance and publicly recognised Johathan for his assistance.

From that point onward, the relevance of WyseTalk as a Social Business Software Solution had been made and over the following months, people were asking questions and people were providing answers.

Alacrity will remain a geographically dispersed business, but now there is a great sense of camaraderie or as us South Africans like to call “Gees!”

Understanding the Growth of Social Business Software

The rumour mill abounds with Microsoft’s possible purchase of Yammer. Yammer is one of the largest Social Business Software platforms globally and has attained a massive following of users. While their business case has yet to be proven from, case studies reflect that enterprise use of Social Business Software show its Return on Investment.

Social Business Software has the potential to change the way businesses collaborate which leads to dramatic shifts in innovation and efficiencies.

Yet a recent piece by IBM reveals that currently only 16% of CEO’s are seeing the potential of Social Media and Social Business and in 3-5 years they expect that number to increase to 57%.

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The price that is purportedly being paid for Yammer by Microsoft is $ 1.2 billion which might seem exorbitant, but with these kind of statistics the market size for Social Business Software is enormous. In the next two years alone, the market is expected to reach almost $ 2 billion in revenues.

CEO’s cannot ignore what Social Business Software can do for their businesses.

How Social Business Software creates an Innovative Culture

A recent case study by a national business in South Africa and one of the earliest adopters WyseTalk’s Social Business Software yielded an amazing case study.

The Company, a national retail chain deployed WyseTalk to improve efficiency and innovation from within and asked their employees for ways in which they could improve their current functions and processes. A few days later, the Personal Assistant to one of their National Operations Managers posted that she had come up with a solution which would make their procurement more seamless and less prone to errors or shrinkage. The Financial Director noted the post and the new solution was implemented a week later.

The Financial Director stated that this new solution would save the company in excess of R 250,000 per annum. The Personal Assistant was recognised within their WyseTalk Community by other senior executives and was rewarded for her efforts.

The resultant “green shoots” emerging throughout the business has seen the Return on Investment realised.

Global emperical evidence already exists with regard to the benefits of Social Business Software, but this is a South African Business with a South African Social Business Software Platform aligning to re-define how innovation can successfully migrate from a Closed Innovation Paradigm to an Open Innovation Paradigm.

The Generation Y mindset and the Adoption of Social Business Software

Having recently Completed my Masters thesis on “The Delay of Social Business Software Adoption in the Enterprise and its Effects” I thought I would start sharing some of the insights that the paper delivers. During the Grounded Theory process it became evident quite early on that the impact of Generation Y in an organisation was a vital component. The Causal Loop Diagram creates the theory.

The Balancing Loop of the Causal loop diagram

Link 1: As the organisation increases its Generation Y mindset, so the generation gap in the organisation increases.

Among the differences, life experiences and social trends are the reasons that affected the behaviours, communication approaches, and viewpoints between older generations and Generation Y because the latter are exposed to a vast array of media and educational opportunities, and grew up in a more global environment (Timmerman, 2007; Hammett, 2007; O’Bannon, 2001). Furthermore, generation Y is viewed unfavorably and it faces struggles in dealing with other generations in a wide range of industries (Anantatmula & Shrivastav, 2012a).

Link 2: As the Generation Gap in the organisation increases, so the level of trust in the organisation decreases.

Boomers and Generation X’ers were significantly different in their acceptance of others, as measured by the scale as a whole. Moreover, when the factor analysis is considered, one factor which was significant appeared to involve aspects of trust: The negative feelings towards others (Cennamo & Gardner, 2008). Cennamo and Gardner also add that Generation Y is technology literate and savvy, processing information quickly but not in a linear way, which is the preferred method of the previous generations.

Link 3: As the level of trust decreases in the organization, so the level of information security will increase in the organization.

Casalo et al., (2007) states that there is a connection between trust and the perceived security in the handling of data, and that there exists a direct relationship between the two (Casaló, Flavián, & Guinalíu, 2007)

Link 4: As the level of information security increases, so the level of information system policy issues of the organization increases.

Business convergence of information security necessitates the need for new enterprise framework policy structures within organisations (Casaló et al., 2007). Swanson (1998) adds that “the system contains information which must be protected from unauthorised, unanticipated or unintentional modification.”

Link 5: As the level of information system policy increases, so the Generation Y mindset of the organisation will decrease.

Generation Y generally have a strong entrepreneurial spirit and an inquisitive mind, which means that they seek constant stimulation. Policies will constrain this behaviour. Wang (2005) states that “the organisational system needs to be re-structured in order to cope with the new requirements for entrepreneurship and technological innovations” (Wang, Z., 2005).

The Reinforcing loop of the causal loop diagram


Link 6: As the Generation Y mindset of the organisation increases, so does the likelihood of social Business Software adoption for the enterprise.

Oblinger (2003) states that millennia’s are characterised by orientation for collaboration, preference for experiential activities, appreciation of structure, and interest in new technologies. Tapscott (2009) stated that “The Net generation is tapping into Web 2.0 communication tools to not only hunt for information, but also to contribute to it, building a collaborative workplace” (Norton, 2010).

Link 7: The greater the adoption of social networking in the enterprise the greater the levels of collaboration in the organization.

Social media can be organised into four categories: communication, collaboration, multimedia and entertainment learning platforms (Villano, 2010). The improved collaboration and communication enabled by social networking for the enterprise saw increased efficiencies and, on average, saved businesses deploying this technology $ 205,000 per project (Bishop & Consultant, 2011).

Link 8: As the levels of collaboration increase, so the level of Open Innovation of the company increases.

This acknowledgement further represents the basic premise of the concept of Open Innovation, which proposes that companies should use both external and internal competencies in innovation processes (Chesbrough, 2006). The processes of knowledge development and creation of shared understanding among the collaborators are central (Gressgård, 2011).

Link 9: As the level of innovation improves so the Generation Y mindset of the organisation will increase (the Generation Y mindset includes the paradigm of Open Innovation)

Structural (knowledge access) and behavioural (knowledge exploitation) aspects are crucial for organisations’ innovation capabilities, and that realisation of the potential for innovation brought about by ICT is dependent on well-functioning CMC processes (Gressgård, 2011).

To Recap the mechanism: The more a Gen Y mind-set (where this is framed as people with aspirations to do things in new ways) exists in the organisation, so it will increase the adoption of social networking or technologies in the enterprise, which will increase the level of collaboration in the organisation, which increases the level of innovation (Change Behavior Over Time) in the organisation, leading to an increase in the Gen Y mind-set. As the Gen Y mind-set in the organisation increases so too does the generation gap in the organisation. This leads to a reduction in the levels of trust in the organisation. As the levels of trust drop then the organisation will need to increase its levels of information security, which leads to an increased requirement for information system policy issues in the organisation, which leads to a reduction in the Gen Y mind-set in the organisation intervening variable.

While the above reflects a theory, my own experiences in building a Social Software Business in Africa will be shared with you.