The Hindu Business Line : Networks that connect

HAVE you heard of the game `Six Degrees of Kevin Bacon' where people attempt to connect any actor to Kevin Bacon by the least number of `degrees', or links?

Imagine taking that game and making it one of the key enablers for corporations to gain deeper insight into their customer relationships. Sound far-fetched? Not exactly.

Businesses are not only seriously examining `social networking', but some organisations have already started to implement these ideas by leveraging existing concepts merged with new technologies.

What really is social networking? In practice, social networking is the process of expanding the number of one's social contacts by making connections through individuals.

While social networking has existed in some form since the beginning of human societies, the Internet has enabled people to connect through even larger networks, faster than ever before, to connect to each other not only as friends, but as friends of friends, and so on. Social networking is not merely a technology, but also involves people and the processes around how and why we interact with each other. In fact, it is in the way people communicate that the foundation of social networking technology was built.

The first generation of business communications tools leveraged advanced telephony applications, video, and mail systems to connect people to each other. By the early 90's, cell-phones, video conferencing, e-mail, and the Internet started to draw people together in a more untethered sense. By the late 90's, people were introduced to instant messaging, weblogs (referred to as blogs) and always-on mobile applications such as the Blackberry.

So what does this market actually look like? Broadly speaking, the tools used in social networking fall under the banner of social networking services.

This is actually a grouping of technologies underneath a broader category called social software that enables individuals to organise themselves in a manner that suits their needs, as opposed to being organised by another party.

Social software encompasses collaborative interaction software (such as IM and virtual spaces), social feedback tools as well as social networks.

Some of the most interesting applications are beginning to take shape within the context of corporate settings. These services, called social networking analysis (SNA), are an application of social networking within corporate functions such as sales, business development, or recruiting.

The pure SNA tools started to appear on the scene towards the end of the dotcom bust in the beginning of 2002 and these vendors have already started to make inroads targeting the business community.

The truly remarkable aspect of the technology that is driving SNA is that it is not very complicated and it leverages much of what we already know and use.

The people we generally have the strongest relationships with are already in a form (of details) that can be imported into a centralised location for analysis and mapping.

This is where the intersection between CRM (customer relationship management) and SNA comes into play.

Companies today have already built formal partnerships with CRM vendors to link the rich contact data within these enterprise applications with applications that can measure the strength of relationship with contacts.

Once the networks of individuals across an organisation have been mapped and correlated with everyone else's networks, the software provides an interface to search for contacts and to pass requests to others within the network in the hope of brokering a connection with the sought after contact.

While each SNA vendor provides different mechanisms for searching and request brokering, the concepts are very similar across the major providers.

The most common search process incorporates a number of basic data elements about a contact — such as name, location, job title, and company — and generates results that will provide the most appropriate connections ranked according to strength of relationship, usually going no more than four degrees away.

Much of the functionality within SNA tools has already been commoditised and considered mere check box items.

Where the differences may lie with most of the SNA vendors, and the most value to organisations, is in the agent technology that collects contact data and the algorithms used to determine strength of relationship based on the inputs from the agents.

To adhere to strict privacy guidelines and customer concerns, companies usually restrict their agents to reading only the to, cc:, and bcc: fields of e-mail.

Despite this seeming limitation, the algorithms created have been remarkably accurate in determining the true strength of relationship through the use of other parameters such as contact frequency, number of interactions, and level of responsiveness.

It is said that it is all in who you know. This basic philosophy has been the basis for the success of many leaders, politicians, and entrepreneurs throughout history.

In the corporate world, these informal networks have only become more valuable as the pace of business has increased.

Customer expectations are higher, competition moves faster, and industry innovation quickens.

On top of that, product commoditisation, compressed time cycles of a globally connected world, and decreasing margins within the cost distribution across supply chains have made differentiation increasingly difficult. In the end, we just move a lot faster than before.

By having and fostering a core set of relationships that are built up over time, businesses and entrepreneurs can gain the advantage in finding and closing opportunities over the competition.

Social networking has only formalised the relationships that people have been building over all this time. Technology has been able to put these theories into practice, but if not for the Internet, the reach of social networking could not have achieved any lasting usefulness either in a social or a business environment.

Before the Internet, the ability to share our paper address books, and sticky pads with others was limited at best because of the constraints of geography, time, and cost.

Now, people can transform these into an electronic network to connect seamlessly to other people's networks, enabling the software to understand the interrelationships between people across common interests and purposes.

This is where SNA makes its case in the corporate world. It is more than just meeting people through other people.

It is about acquiring more qualified leads to build a stronger pipeline, finding connections in the sales cycle and finding the types of connections that enable business to reach actual decision makers.

Knowing a name, phone number, and job title does not necessarily mean there is real connection, nor does it provide much of an entrée into potential customers.

SNA tools do more than uncover connections; they uncover the level of trust in those connections. It is the trust, not just the relationship itself, that is the true currency of SNA tools, and consequently turns static contact data into a valuable corporate asset as much as intellectual property.

The time wasted in cold calling through a corporate phone directory or the yellow pages can be traded for a simple search across the network and enables a business user to get an introduction through a trusted relationship.

This does not guarantee the deal, but it does significantly shorten the sales cycle towards closing the deal or moving onto more promising opportunities.

That is where the real ROI (return on investment) comes into play, not so much in the hard dollars of more closed deals, but in the decreased cost in sales due to compression of sales cycles.

So where is SNA going with regard to corporate networks? Probably the most obvious trend is convergence with CRM applications. When SNA starts to show demonstrable ROI from leveraging existing CRM deployments that have shown little to no ROI, vendors will begin to take notice.

And as soon as one major CRM vendor adds SNA functionality to his suite, others will follow soon after.

Security and privacy will very quickly become dead issues in social networking. Corporate enterprise deployments of SNA technology will continue and employees will begin to share their personal networks. This will occur because their relationships will be safeguarded by these technologies, while the value of sharing within the network will become readily apparent and overcome any apprehensions about privacy. SNA is the not the next big thing, but it is a significant part of the future of the corporate world for the next decade. If anything is to be taken away from the core lessons of SNA, it is that a relationship is not just a contact. A relationship is contact that is mutually fostered over time with trust.

More than that, however, SNA shows that at some level this can be measured with a pretty good level of accuracy.

While creating a network map of contacts is a useful exercise, the real `killer application' in SNA is being able to determine which relationships are meaningful, and using this information across a wide spectrum of applications. The first pass has been to build the bridges between people, but the future holds much more and the opportunity to grab onto that future is right now!

(The author is Managing Consultant, Headstrong).

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