Thursday, April 21, 2011

Social media: The personal at work can be a disruptive mix

Social media: The personal at work can be a disruptive mix
By David Gelles

Published: April 20 2011 10:07 | Last updated: April 20 2011 10:07

There are some companies that encourage employees to have a healthy work-life balance. A happy worker, so goes the thinking, is a productive worker.

Yet, with the rise of social media, there is more personal information about individuals available on the web than ever before.

As a result, the lines between work, and the rest of life have never been more blurred.

This muddling of professional and personal identities can be disruptive in the workplace.

“Social media have had an enormous impact on businesses, from a product perspective and also, in some cases, from a performance management perspective,” says Sue Murphy, association manager, of the US National Human Resources Association.

At the most basic level, the HR department needs to make sure employees are not spending all day on social networking sites and frittering their work hours away tweeting and playing games.

“The amount of time people are spending on the internet at work has increased, so from a performance management perspective we need to be more diligent,” says Ms Murphy.

Even if social media facilities are not being abused in their overuse at work, there is a question over when and whether even sparing use could be deemed inappropriate.

Stories of employees and managers misusing social media on the job have become common.

But for the first time, authorities are getting involved in deciding whether workers or bosses are in the right. Last month, the US National Labor Relations Board weighed in after an employee was fired for a Facebook posting deemed tasteless by management.

Michael Patrick O’Brien, an employment attorney with law firm Jones Waldo, says this incident was a wake-up call for employers.

“Get legal advice before you fire someone because he or she has posted comments online or communicated with co-workers about working conditions,” he says, adding it was important for companies to “update social media policies”.

Social media can also prove an asset, and a liability for recruitment. Increasingly, says Ms Murphy, companies are posting job listings on social sites such as LinkedIn, instead of on job sites such as Monster.com.

“It’s helping to cut their recruiting costs, and to find more suitable candidates,” says Ms Murphy, adding that Craigslist, the online classified advertising site, is not an ideal recruiting venue. “There are some negative sides with some of the Craigslist postings.”

But encouraging employees to use social media to share a job listing among friends and social networks can be useful. “It helps you get your message out,” she says.

“There are millions of people on Facebook and Twitter every day. When I started in HR, you would place an ad on Wednesday, it would be in the paper on Thursday, and it would be a week before you had CVs,” says Ms Murphy. “Now it only takes seconds.”

But again, with so much data publicly available, there is a risk employers will focus on personal information when they make hiring decisions, whether it is relevant to work or not.

“The downside of using social media from a networking perspective is that we don’t have guidelines for regulating what employers are getting from these social sites,” says Ms Murphy.

“If there are photos of them partying, or if they see people that seem to be obese, they are making decisions based on what they see on these sites, which leaves the door open to discriminatory practices.”

Even after employees leave the organisation, social media can be integral to an ongoing relationship with the company.

“Employers use it to track their alumni in the press,” says Martin Murtland, managing director at for PR and Corporate Communications at Dow Jones, speaking about proprietary software that monitors mentions of individuals and companies across media channels.

“If there’s someone you’re particularly interested in, this is a way to see what they’re saying about the company.”

Yet, without guidelines, social media in the workplace can go awry. “You have to be careful about maintaining ... neutrality,” says Ms Murphy.

She recounts an incident where a supervisor went on to Facebook, downloaded a picture of a male employee who was out with a friend, then sent it out to colleagues saying “look at these two gay boys”.

Nothing was done to the supervisor, much to the chagrin of the employee. “His supervisor created a hostile work environment,” she says.

The use of common sense is important in HR policies on social media.

“Be smart with what you’re saying, be aware of who you’re reaching, and if you’re going to go looking, be prepared for what you’re going to find,” says Ms Murphy.

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Friday, April 15, 2011

Google to go plus-one better than Facebook

Google to go plus-one better than Facebook
By Richard Waters

Published: April 13 2011 21:05 | Last updated: April 13 2011 21:05

Five years ago, Yahoo! had a plan for beating Google at its own game. It would encourage members of its huge online audience to vote for web pages they liked by “tagging” them. Out of this outpouring would come a more personal and social web, one that was filtered by Yahoo’s users rather than Google’s algorithms.

Fast forward to the present, and there’s a distinctly similar echo in what Google has come up with in its own latest attempt to counter a certain fast-growing social networking site.

Facebook’s “Like” buttons may have sprouted across the web over the past year, but if Google has its way we will all soon be “plus-one-ing” – the inelegant new phrase that describes its move into social, whereby we can click on the “+1” buttons due to appear on its search results and, eventually, other web pages.

The comparison with the now-struggling Yahoo, and the sight of Google copying one of Facebook’s more successful moves, raises the uncomfortable feeling that the search group is running out of ideas.

When Larry Page marked his elevation to chief executive this month with the blunt message to Googlers that a large part of their bonuses will be tied to the company’s success in social, it only added to a sense that urgency is turning to panic.

But it would be a mistake to write Google off. It has some prime assets already in place for its social push and it undeniably has the staying power. Also, it has more in common with Facebook than the usual “search algorithm v social network” contrast suggests. Both see themselves as utilities on the web, with a mission to help a large slice of the world’s population communicate and connect with things they’re interested in.

If Facebook’s key asset is its “social graph” – the web of its users’ personal connections – then Google has its own, implicit networks of relationships to mine. By tapping your most frequent Gmail connections, your list of friends on its Chat service and your phonebook on one of its Android devices, it has plenty of ways to divine your social relationships. It can supplement that by drawing on connections from services like Twitter.

Until now, Google’s main problem has been that it just hasn’t found anything very compelling to do with this information.

That’s where the “+1” voting system comes in. Smartly, it got a low-key launch (lessons learnt here from the debacle around Buzz, the rudimentary social networking service that attracted criticism last year over its handling of privacy). Websites will have good reasons to display the +1 buttons: votes will feed into Google’s search system and could help their rankings.

More of an issue is what users will get out of clicking those buttons – there is no social networking site to collect all those preferences and display them to friends. But as Google starts to show what your contacts have “plus-owned” in the search results you see, the draw could strengthen.

There are other pieces that need to fall into place. Google needs more users to set up profiles and add personal information about themselves, as they do on Facebook. Then, the value of having a Google profile should start to become more apparent.

To feed this virtuous circle, Google needs to find many more things for users to share. Inevitably, that will mean finding a way to draw in an equivalent of the Facebook status update – something that Buzz has so far failed to do.

An acquisition of Twitter still makes sense, which would bring a new brand and an extra dimension in much the way YouTube did. It would have the added benefit of marrying a company which has become a byword for the failure to find an effective business model, with one that is sitting on a geyser of cash.

Larry Page’s “social bonus” kicks in for Googlers in the final quarter of this year. That might be a little early to see real results from the latest social push, but the message he has sent is not unreasonable: Google does not need to build a new social network from scratch and is closer than it may look to seeing some results.

None of this is to belittle the severity of the challenge. Simply welding social behaviour on to an existing web service – as Apple has proved by trying to attach its Ping music network to iTunes – does not work unless users see some compelling benefits.

Google has plenty of ways to make that mistake. Properties like YouTube, Android and the Chrome browser could become powerful platforms for promoting and spreading its social services. But force-feeding users with Facebook alternatives they don’t want or need is a recipe for disaster – as seen with the privacy row around Buzz.

The question is not whether Google “gets” social – it is whether it is as attuned to, and respectful of, its users’ interests as it claims.

Richard Waters is the FT’s West Coast managing editor

richard.waters@ft.com

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‘It is a service, not a technology’

‘It is a service, not a technology’
By Charles Batchelor

Published: March 15 2011 16:22 | Last updated: March 15 2011 16:22

Chief executives and finance directors are understandably cautious when the IT industry waxes enthusiastic about the next “breakthrough”.

What are they to make of cloud computing, the latest big technology idea to come to mainstream business attention?

Simply put, cloud computing is the use of off-site servers, routers and databases that are not “owned” by the business, to handle all, or large parts, of a company’s computing needs.

Instead of managing requirements in-house, with all the costs and hassle involved, a company will outsource operations such as e-mails, enterprise resource planning and data storage.

Factories used to generate their own power on-site, but now routinely buy in electricity and gas.

Cloud enthusiasts believe that, in future, companies will buy computer capacity in the same way.

Executives may be unfamiliar with the cloud but many will have been using it for years without realising it.

E-mail providers such as Google, social networking sites including Facebook, and Flickr, an online photo and video-sharing service, are all run from global data centres, many of which are owned by companies such as Amazon and Microsoft.

The e-mails or photographs that appear to be stored on your desk- or laptop are actually held remotely.

The term “cloud” comes from the technical diagrams used to represent telecommunications and computer systems, which traditionally enclosed networks within cloud shapes.

Cloud computing represents a development of previous arrangements such as “managed services”, where a company handed the operation of its IT network to an outside supplier.

It also piggybacks on “virtualisation” technology, which allows users to get more out of their network by squeezing several applications on to a single server.

“Research has shown that [in-house] data centres do not use more than 20 per cent of their capacity,” says Michael Kogeler, director of cloud strategy at Microsoft International.

It was the idea of putting all that unused capacity to work and the growth of the internet that led to the birth of cloud computing.

“The cloud is a service, not a technology,” explains Rupert Chapman, a cloud specialist at PA Consulting. “You only pay for what you use” and access the computer power over the internet.

Cloud computing is sometimes seen as of particular benefit to small and medium-sized businesses that lack the resources to set up their own IT departments but it is also used by large companies.

It allows businesses of all sizes to acquire computer capacity to launch products and services quickly.

There is little or no capital expenditure involved and costs are based on transactions completed or volume of data stored and should be lower than if managed in-house.

Because the capacity of the cloud is, in theory, unlimited, companies can store far more data and handle far more transactions than might be possible on their in-house system.

They can also back up data on a remote site for security. Because data are not kept in house, they can be accessed from anywhere with an internet connection, so are available to executives on the move.

Going to the cloud for capacity also means the IT department is not constantly updating servers and software to keep up with technology.

A large cloud provider can also devote more resources to maintaining the security of the network.

“From customers’ perspective there are three ways to use the cloud,” says Mr Chapman.

“They can use it to dip their toe in the water to test an application. If it meets their needs, they can bring it in-house and run it on their own machines. The test environment has traditionally been expensive but one client achieved an 80 per cent cost saving.

“Alternatively, customers can use the cloud on a selective basis for particular services. A market information organisation used a customer relationship management system to suck in just the customer information they needed.”

Finally, companies can take a “transformational” approach, opting to use the cloud for most of their applications, retaining direct control only of those that make a real difference to their organisation. Relatively few companies do this as yet, says Mr Chapman, because they often have a big investment in their legacy systems or are tied into managed service contracts.

Problems companies should watch out for include legal ownership of data, security and the risk of getting locked in to a service provider.

An appropriate contract should resolve ownership issues. Security should be better at a dedicated cloud provider, but hackers have attacked networks and sensitive data should be encrypted in transit and storage. The contract should also allow a customer to change providers easily.

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Social media: The worst thing is to ignore your customers

Social media: The worst thing is to ignore your customers
By Jane Bird

Published: March 15 2011 16:22 | Last updated: March 15 2011 16:22

Comment on a product or service using Twitter or Facebook and within minutes your words could have been read by thousands.

This benefits business when the comment is favourable, but customer complaints can rapidly acquire huge momentum.

Many companies are using social networks, blogs and other online forums both to keep in touch with customers and as a vehicle for sales and marketing.

The challenge is to handle the vast volume of messages that can result.

When you start to participate in social networks, you open the floodgates to what your customers want to say, says Graham Murphy, senior community developer at Grooveshark, an online music service. “It can be a blessing or a curse.”

Grooveshark has benefited from networks, which have helped build registered users to almost 8m with negligible advertising.

It is certainly a disadvantage that people can so loudly voice a negative opinion, says Mr Murphy.

“But there’s the opportunity to flip it in our favour. If we solve a billing issue in 20 minutes, they’ll post something great about us. Suddenly we look better than we did before.”

When Grooveshark has server problems, it is alerted in minutes by its followers – 200,000 on Facebook and 50,000 on Twitter.

“Their voice gives valuable insight into our website.”

The company uses software from California-based Assistly to aggregate all messages it receives into one inbox, where they can be prioritised and acted on swiftly, generating a “virtuous circle” of positive comments.

Alex Bard, Assistly’s chief executive, says the aim is to help companies turn customer service into sales and marketing. “If customers are going to gang up on you, they’ll do it anyway,” he says.

“Customers are a core asset that you can learn from, creating a better relationship. The worst thing you can do is ignore them, and the best is to respond.”

Mr Bard encourages companies using Assistly software to let a broad range of employees participate in customer dialogues, rather than just the service team. “This gives engineers or product developers insights that help them make better decisions.”

The real prize is to get customers to recommend you to their friends, says Gail Goodman, chief executive of Massachusetts-based Constant Contact.

It provides polling, monitoring and tracking tools that help companies set up surveys on social networks and understand which postings generate most discussions and traffic.

Dingo, a pet food distributor, used the software to extend its fan base from 350 to a target 5,000 in three days last August, by asking fans to get their friends to sign up. It offered a $20 coupon for everyone if the target could be reached. A further promotion brought fan numbers to 25,000 by the end of February.

“Forty per cent of US households have dogs, so we knew we had a big opportunity, and dog-owners often know other dog-owners,” says Mike Halloran, online marketing manager. “We wanted existing fans to tell their friends about us.”

Brands are working out rules about how far they can go, because people do not want to be advertised to, says Ms Goodman. “Your page will be dormant and deserted very fast if you do this. You need to be engaging, fun and provocative – create a destination for conversation, not a push-marketing venue.”

This is no small challenge, because consumers are busy and there is huge competition for their time online, she says.

Grooveshark’s Mr Murphy sees social media as a way to “personify” the company.

Its Facebook and Twitter postings tend to focus on third-party products, service updates, or blog posts, for example, about the company’s presence at a festival. “We did a post on our campaign to help victims of the BP oil spill in the Gulf, and one to promote an artist we are interested in,” he says.

His company won’t take payment for a posting. “We want to be objective and informative rather than self-promoting, so that people have a positive feeling about us and tell their friends,” he says.

One problem with using social networks for sales and marketing messages is that they accumulate quickly and are often ignored. More than three items posted a day could be seen as a “spam blast”, says Mr Murphy, and will drive followers away.

Mr Halloran favours e-mail for sales and marketing promotions, but says Twitter is ideal when you want things to be instant.

“The nice thing about Twitter is that messages tend to be looked at a bit more quickly and regularly and in-boxes are less cluttered.”

Dingo plans to use Twitter for customer service, so people can send questions and receive rapid replies.

“A dog might have just stained a carpet and the customer wants to know how to remove the mark,” says Mr Halloran.

“If we post a solution to this on Twitter it will be seen by many people and picked up in search engines such as Google and Bing long afterwards.

“We are looking at anything where posting answers creates ‘breadcrumb trails’ that link back to us.”

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Sales moves from art to science

Sales moves from art to science
By Paul Taylor

Published: March 15 2011 16:22 | Last updated: March 15 2011 16:22

For years, sales and marketing was a pretty haphazard affair in most companies, more art than science.

Sales directors kept contacts in a Rolodex file or on their computer and sales staff worked the phones or hit the road with samples in a suitcase.

Marketing usually meant commissioning an advertisement in newspapers, magazines or broadcast media and perhaps organising a direct mailing campaign.

IT began to change corporate sales and chief marketing officer (CMO) roles in the 1990s with the introduction of more sophisticated contact management and customer relationship management (CRM) systems and salesforce automation tools.

CRM software, in particular, has become a key IT tool to improve efficiency and customer focus.

Harris Products, the metal working products company, chose the CRM suite of SAP, the German software company, to improve control over sales processes and give a more accurate view of prospects.

Lincoln Electric, Harris’s parent company, was able to build a common customer database, establish a standard sales methodology to provide greater accountability, eliminate duplication in reporting and provide better information about sales opportunities.

“We needed one complete version of the truth about our customers, as we couldn't manage what we couldn’t measure,” says Greg Langston, vice-president of sales at Harris.

“[It] changed the way our sales reps sell and we are collectively now more in control of revenue and forecasts. It is also helping us to focus on our customers, and invest in the aspects of the business that directly impact our success.

“It’s all about results and accountability driven by superior information and process.”

Harris reps, who sell a lot of welding equipment, can now see full details of contacts and previous dealings with customers in one place, instead of having to look in various files and databases.

Companies, particularly those in customer-facing industries such as retail and entertainment, and their CMOs are also having to adapt to fundamental changes in media consumption, the rising power of the consumer and the growth of social networking.

Donovan Neale-May, executive director of the California-based CMO Council, says globalisation of markets and digital channels mean that senior corporate marketers are having to develop new skills and redirect marketing spending.

New software tools are helping. “Sales and marketing campaigns haven't historically always been that easy to monitor or measure,” says Bill Ogle, Motorola Mobility’s CMO, who is in charge of building the smartphone maker’s brand.

“However, new tools – most noticeably salesforce automation and CRM – as well as search marketing measurement, together with the emergence of social network channels, have had a huge positive impact in terms of campaign return on investment, ” he says.

Like other companies, Motorola can now much more accurately measure the effectiveness of its marketing.

Many of the technology tools used by marketing and sales professionals are also moving rapidly online and into “the cloud”, where software and IT services are provided over the internet rather than in-house.

Traditional CRM software packages have helped companies manage their interactions with customers and sales prospects by co-ordinating business processes – including marketing, sales activities, customer service and technical support.

But some packages earned a reputation for being difficult to implement and use and for being expensive. These concerns have been a driving force behind the success of cloud-based CRM offerings, pioneered by Salesforce.com.

“The problem with traditional sales and marketing apps was actually getting sales and marketing people to use them,” says Alex Dayon, executive vice-president of CRM at Salesforce.

“That’s because the apps were cumbersome and didn’t always share data across departments, making it difficult for managers to have insight into business performance. Traditional sales and marketing apps were also incredibly expensive and difficult to install.”

By contrast, cloud-based packages promise fast implementation, do not require hardware investment and can be automatically updated. “With a cloud app, you just open a browser, log in and start using it,” says Mr Dayton.

Recent converts include NBC Universal, the media and entertainment company, which wanted to change its advertising sales business.

The company went for Salesforce’s cloud-based CRM service. “Four weeks later, we had 75 per cent user adoption [among the sales team]. That is unheard of,” says John Sabino, senior vice-president of commercial operations at NBC.

Instead of grappling with software, reps can look at all relevant information in one place and have time to focus on clients and identify opportunities. “It gives us a competitive advantage,” says Mr Sabino.

Other companies have found innovative ways to speed up the sales closing process.

Groupon, the deal-of-the-day website that offers local discounts to online consumers, discovered that its sales teams were spending up to 25 per cent of their time chasing and signing contracts. The company turned to AppExchange – an online marketplace for cloud computing applications – and found a digital signature app, EchoSign.

“The normal process for our sales force across the UK and the world, was to get the Groupon contracts signed in person or follow the tedious process of scanning, mailing or posting the contract,” says Ash Mahmud, head of CRM at Groupon UK.

“It wasn’t unusual for a rep to visit a client two or three times to negotiate all the details.”

The sales reps have managed to cut the time taken to close deals to just under three hours.

Businesses are also learning how to tap into social networking and use the online customer relationships they can create for commercial gain.

“Social networks promise to be the next generation of e-commerce engines,” says Matt Anderson, a partner at Booz & Company.

While commerce mediated by social networks is still nascent, some companies are already testing the waters.

For example, 1-800 Flowers, the online florist, has a fully functioning Facebook store where customers can buy and pay for flowers to be delivered.

CMOs are also beginning to tap into social networks to guide product development, attract customers and boost sales.

Dell, the computer company, is using Twitter, to offer customers Twitter-only deals on equipment.

In December, the company also launched a social monitoring centre, Ground Control, designed to track and analyse the more than 22,000 daily topic posts related to Dell, as well as any mentions on Twitter.

“Digital channels have transformed the way customer interactions are recorded and reported back,” says Patrick James, head of marketing, sales and service at Capgemini Consulting.

He says: “We can track when, how and where customers enter digital channels as well as what they do, when they exit and where they go next.”

With sophisticated IT, including superfast memory-based databases, companies can now mine that data in near real time to detect trends and adapt their marketing strategies accordingly.

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Do you know your SaaS from your PaaS?

Do you know your SaaS from your PaaS?
By Charles Batchelor

Published: March 16 2011 17:29 | Last updated: March 16 2011 17:29

The “cloud,” as a term, has the virtue of simplicity. But burrow into the different types of cloud computing service on offer and you realise the techies have got hold of the dictionary. Infrastructure-as-a-service, platform-as-a-service and software-as-a-service are terms frequently used to describe the shapes the cloud can take.

“There are real differences, but there is also a degree of marketing spin,” says Rupert Chapman, a cloud specialist at PA Consulting. “They describe the levels of service on offer.”

Infrastructure-as-a-service (IaaS) involves the customer paying for off-site use of basic hardware and equipment – servers, network equipment, database storage from the provider. “I get access to very cheap shared machines and can put my own operating system and applications on top, so I have a degree of control,” says Mr Chapman.

Platform-as-a-service (PaaS) is the next level, with the customer renting both the machines and the operating systems that do the job. The customer does not need to understand the architecture of the platform or to carry out upgrades. At this level, customers can also develop and test their own applications.

Staff who are not programmers can try out applications to see how they work and if they are of value to customers and users. A credit-checking database could, for example, be used as a building block to construct a customer management application.

Software-as-a-service (SaaS) is the third layer in the cloud. Customers rent whatever applications they require – enterprise resource planning, customer relationship management and human resources are common business applications – and have only to log in to be able to use them.

“All I need is an internet browser and I can log in from home, the office or the coffee shop,” says Mr Chapman. “Everything is looked after by the cloud provider.”

SaaS is sometimes used as a catch-all phrase to mean “cloud computing”, but the purists insist the two terms are different. Cloud computing is the more general term used to cover the different levels of service available.

“Clients tend to forget about the labels,” says Mr Chapman. “These are terms that will stay in the IT world. Most business users don’t care and are probably turned off by them.”

“We prefer to call it IT-as-a-service,” says Michael Kogeler, director of cloud strategy at Microsoft International, which has launched Windows Azure as a cloud computing platform. “That’s more understandable.”

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The Economics of the Cloud

Computing is undergoing a seismic shift from client/server to the cloud, a shift similar in importance and impact to the transition from mainframe to client/server. Speculation abounds on how this new era will evolve in the coming years, and IT leaders have a critical need for a clear vision of where the industry is heading. We believe the best way to form this vision is to understand the underlying economics driving the long-term trend. In this paper, we will assess the economics of the cloud by using in-depth modeling. We then use this framework to better understand the long-term IT landscape.