An accountant’s Web 2.0 analysis

I guess I don’t need to remind regular readers that I detest most of the X2.0 moniker stuff. Most people just don’t understand what it means, sometimes I get confused. My benchmark is simple: I can’t find a single buyer who ever said: “Can I please have some X2.0?” Instead I find plenty that want problems solved and where some of the technologies that corral themselves around Web 2.0/Enterprise 2.0 make at least some sort of sense. It was therefore with considerable interest that I worked my way through Louise Ross’s heroic attempt to cut through the hype and present a detailed overview and case for what she terms Web 2.0. The full report runs 28 pages but is well worth the study if only for the fact Louise has done a great job in marshaling a tsunami of facts into reasonable order. However, there are some points of fundamental disagreement. Louise already knows my position as I’ve said so on her blog entry but expand here:

• Louise sometimes muddles Web 2.0 with Enterprise 2.0. If we have to use those expressions then it is as well to get the generally applied differences out of the way. Enterprise 2.0 is being used as an expression that covers internal (to the business) efforts to bring social computing into the business environment. They address collaboration and what my colleague Oliver Marks terms social business design. If that sounds scary then it is.
• Today’s emphasis is on outward facing efforts, mostly owned by marketing departments, designed to achieve a range of objectives such as raise brand awareness or sell more of what ever it is they have on offer. A Deloitte survey confirms that to be the case.
• Louise contention that the paucity of ROI numbers is down to the lack of engagement by accountants is wrong. As Deloitte discovered and which I can confirm anecdotally both from received reports and my own experience, companies that are using these technologies are generally using the wrong metrics and focusing on the wrong distribution of resources. Too often they see this as something to do with technology and completely missing that this is to do with people – it is therefore an inherently social exercise. Some years back, I attempted to help Charlene Li to deal with the ROI of blogging idea. Looking back it was a crude and misguided effort. That hasn’t changed. As an aside, it is no coincidence that I have recently aligned with Oliver and Ray Wang, now with Charlene’s organization. More on that another day.

One point that wasn’t brought out in Louise’s study but which is becoming increasingly an issue as confirmed by Deloitte: What do you do about the lurkers? In most communities Nielsen’s 90/9/1 rule is alive and very well with 90% of people acting as information consumers. Questions like: Do we need to do anything about them? Do we know what value they are receiving/bringing? are starting to rise to the top of the agenda. This is in marked contrast to the oft seen emphasis on numbers of post, comments, community growth numbers which say nothing about the community at all. Other questions are also emerging like: How do we meaningfully reward those who are adding value? How do convert clearly held passion into value?

Specifically as it relates to community though (and this is where a lot of value can be won or lost) I am seeing a stand out trend that few communities understand: they cannot thrive without full time committed resource and a cadre of well rewarded enthusiasts willing to keep going. Rachel Happe has some solid advice in her Social Media Fear Factor post. She scratches the surface of what is a complex problem but even so gives aspiring community leaders a good foundation for attempting new initiatives.

In one sense it is good that accountants have been slow to respond to this trend. Our natural tendency is to look for measures that have a financial bottom line. If you’d thrown bean counters into the mix over the last few years I’m betting they’d either nix projects on the grounds of no ROI calculation or they would have been made very uncomfortable by the apparent fuzziness surrounding such projects. Today, I’d argue that ROI remains difficult though it is possible to turn the soft measures into something where there is a financial expectation. But it takes much more time and commitment than people realize in order to get somewhere you can say there is enough data to return sensible measures.

There is much more to learn on this than seems apparent. Louise’s study combined with the Deloitte survey should give you something to seriously consider. If nothing else, it should get you thinking about the role accountants can play that will add value to social computing efforts. I’m guaranteeing it will be a lot different to what you might think.

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