The risky business of social media

By Nick Hortovanyi

This is an article that appeared on Australian Flexible Learning Framework websites in August 2009 from their e-newsletter. It is based on an interview that I gave and thought I'd share it with you.

The risky business of social media

Social media tools – such as Facebook, Twitter, wikis and blogs – are increasingly powerful and valuable for communicating, collaborating, retaining and harvesting knowledge. 

However, despite the widespread use and popularity of social media, and its ability to facilitate knowledge sharing and collaboration in workplace training, privacy issues and fears of misuse continue to deter many organisations from adopting these tools.

Nick Hortovanyi, CEO of Toast Technology, says that the benefits of allowing staff to access social media in the workplace far outweigh the risks – and that resisting the adoption of social media will result in organisations losing their competitive advantage.

Comparing social media to a ‘steam roller’, Nick explains why it’s critical that organisations act quickly to get on board.

Why should organisations adopt social media?

An ageing workforce

A key factor driving social media adoption is our aging workforce: for example, 60% of utilities workers and half of the Australian public service are expected to retire in the next 10 years. A vast amount of valuable knowledge and experience will be lost when these workers retire – unless organisations act quickly to implement an effective system to retain, share and harvest their knowledge. As experienced workers leave an organisation, social media applications can facilitate flexible and effective training and retraining of remaining and new staff.

Attracting and retaining high quality staff

Within the vocational education and training system, training providers are already starting to adopt social media applications as tools for learners to share knowledge and collaborate, allowing them to undertake training in any location and at any time. This flexibility is something that younger generations, in particular, have become accustomed to and expect. If organisations don’t provide access to social media
infrastructure in the workplace, they risk losing high quality new applicants to replace experienced retiring employees.

Capability development

Social media applications can enable management to identify and address areas within a team that need strengthening. Social media can facilitate high-quality mentoring programs, enabling employees to access the most appropriate mentor to suit their requirements, regardless of location and distance. Similarly, organisations can engage specialists from remote locations on a just-in-time or ‘as needs’ basis, using instant messaging and videoconferencing tools (such as Skype).

Cost saving

There is a lot of great open source social media software – so getting started isn’t expensive. Social media can also save organisations time and money by enabling online – as opposed to face-to-face – training. This can reduce accommodation and travel costs, as well as the amount of time staff need to take away from their regular duties to attend training.

What are some of the risks of adopting social media, and how can they be overcome?

Not adopting it

The biggest risk for organisations is to ignore social media. If organisations take this approach, they risk losing relevancy as we move from a manufacturing to a knowledge-based economy. Social media tools will be a key part of this new economy – so if organisations can’t use these tools, they won’t be able to engage effectively in the knowledge economy.

Privacy and misuse

These are the most common concerns for organisations – however, they are relatively easy to overcome by implementing a social media policy.

An organisation’s social media policy should establish clear guidelines around privacy and acceptable use, as well as specifying how management should respond to infractions. An effective social media policy needs to be easy to understand and put into practice – so it should be ‘light’, clear, and concise. It’s imperative that this document is regularly reviewed and updated to keep pace with technological advancements. Check out IBM’s and Telstra’s social media policies online if you’re looking for some ideas on how to get started.

It’s also important to remember that firewalls can provide protection for organisations while they’re finding their feet and establishing what does and doesn’t work for them.



Inexperience

Not being able to use social media tools effectively is a significant risk. The only way for organisations to overcome this is to provide staff with access to the tools and time to experiment and develop their knowledge. Organisations need to ‘learn by doing’ – create a blog; create a wiki; experiment with tag clouds and learn how they work.

After you’ve tried out the tools and built up some experience, you will be well placed to become a social media ‘champion’ within your organisation, and start educating your managers and co-workers in a non-threatening way.

What’s your advice for a practitioner who wants to adopt social media, but their organisation won’t currently support this approach?

Start experimenting with the tools in your own time. Create your own personal blog (using TypePad or WordPress) or a Twitter account, develop your networks, and show your colleagues the responses and value that come from building connections using social media tools.

Establishing business leadership through social media

By Nick Hortovanyi

This is a presentation that I have been working on over the last year. It is being well received, so I thought I'd share it with you through slideshare. Have embedded it here for your convenience.

Love to gain your feedback or thoughts on the issues presented in it.

Companies Using MS Word "Out of Habit," Says Forrester

By Nick Hortovanyi

I came across this interesting article on slashdot this morning - Companies using MS Word "Out of Habit," Says Forrester. 

"A Forrester Research report has found that companies use Microsoft Word for word processing out of habit rather than necessity and are beginning to consider other alternatives as the Web has changed the way people create and share documents. The report, "Breaking Up Is Hard To Do: The Microsoft Word Love Story," by analyst Sheri McLeish, suggests that businesses may still be using Word because it is familiar to users or because they have a legacy investment in the application, not because it is the best option."

It was easy giving up on Microsoft software for work. I now use a combination of Open Office, Google Docs and iWork depending on what I'm trying to achieve. So don't believe that the only option is Microsoft Office. If you haven't tried some of the other products give them a go, you will be pleasantly surprised.

Is SOA really dead?

By Nick Hortovanyi

A blog post titled "SOA is Dead; Long Live Services" was directed to me by a couple of persons. It highlights, what I first started to describe a couple of years ago as "Journalist led technology"; sometimes I do believe that it is Analyst led as well. That is, that the potential promise of the technology genres and acronyms, in this case SOA, take over. Without necesarrily having the real world experiences to back it up, to cut through the hype.

We most not forget that SOA means Service Oriented Architecture. It is an architectural style, that is a different style, then what has been used in the past in the client/server world of old. "to SOA or not to SOA" which I wrote about a couple of years ago, is always an interesting question.

"What are the alternates to a SOA style architecture?" still holds true in my opinion, that if you are not using a monolithic 80s/90s style client/server model, then there will be a business tier that exposes services at some granularity to be consumed by a presentation tier or another business tier service. Its the pace layering that becomes the issue (my thoughts here on timeless software).

To me Anne has highlighted the true issue that has been missed which is the important stuff: architecture and services.

The rise of the intangible business model

By Nick Hortovanyi

Around this time last year I wrote a prediction blog entry for 2008 where I used my then delicious cloud tag as the basis of formulating the subject of the entries. Well this year, the top two tags from last year, being SaaS and Business are still the same. So instead of repeating what I did last year, I thought I'd summarise what I see emerging in 2009 as more dominate, being that of the intangible business model. 

Let me explain this over the next few paragraphs. I work, and most likely if you are reading this you do to (or at least in your department), in a business that is focused around the production of intangible assets - they cannot be seen, touched or physically measured. That is, there is no physical product or building (bricks & mortar) produced.

However, to produce these intangibles assets some property, plant and equipment also known as fixed assets (eg buildings, land, software, computers) are acquired. In the case of a software company that hosts software for other organisations, this may also extend to include a production data center. These costs quickly mount up, and financing operations until profitability or an exit is achieved has become near impossible. Not to mention the expectation of customers to not pay as much for the software or services as they view it as a commoditised transaction.

This means you either need to sell more volume at a lower price, or reduce your costs to achieve a cash positive position sooner.

Cash is good, Assets are bad

I've heard the above phrase a number of times in the past, and the first time I heard it, I was a little confused as I thought Cash was an asset to. Which it is, but I believe that it is a current asset (eg cash, receivables, inventories and prepayments) as opposed to a non-current asset (eg investments, fixed assets, intangibles and deferred tax assets). I also thought that not all non-current assets are bad, maybe it should really say fixed assets are bad.

I apologise for all the accounting speak, it is not my native tounge either, so I hope it is making sense so far! If you have an accounting background and I've got this wrong, please be gentle on me; but please tell us where?

The intangible business model in my mind, will minimise fixed assets, hence the need for debt (liability) to finance it. Who is going to be able get financing anyway in 2009? (unless of course they already have it)

In the case of a software company, how are they going to get the costs down? They'll provide it as a SaaS based service over the internet, right? If they host it themselves, up goes those fixed assets and liabilities through the debt to fund it. Well, thats not going to work is it? (fixed assets are bad) So they'll use cloud based services, such that costs will rise propotional to sales and the major non-current assset on the balance sheet will be the intangibles comprising the software service. Operational costs will be reduced, thus lower pricing for customers in an increasingly commoditised SaaS world.

So in my humble opinion I'm predicting that in 2009 we will see the rise of the intangible business model. Hopefully also better recognition that a larger preportion of our economies depend on them and not on factories that produce physical products with inventories.