Social Media Usage in Purchasing And Other Enterprise Applications

Posted in Enterprise applications software, Social Media Marketing, Twitter on July 7, 2011 by Shankar Saikia

Business operations such as purchasing, order management and others can benefit from social media capabilities such as collaboration, sharing, communication and transparency. At present the most common applications of social media in the enterprise are in marketing, branding and general collaboration. One of my favorite examples of social media marketing is Fashion TV’s  Youtube channel.  I believe that areas beyond marketing and communication can also leverage social media capabilities and behavior.

This post answers the question “how businesses can use social media” by listing social media’s main characteristics, highlighting user behavior, providing a methodology for evaluating how social media can benefit enterprise operations and finally describing an example of how social media can help an organization’s procurement operations.

Clearly social media tools such as Facebook, Twitter and LinkedIn are gaining incredible popularity among individuals – for example, Facebook  just confirmed 750 million registered users.  While social media applications gained traction as consumer applications (i.e., for individual users) business applications are emerging. Examples of business applications are Youtube for marketing, Facebook for branding, Twitter for customer service and Yammer and Salesforce Chatter for internal collaboration. While marketing, branding and collaboration are the most common applications of social media today, I posit that other areas such as procurement, order management, manufacturing, human resource etc. can also gain significant benefits from social media. The key to success will be using the core capabilities and behavioral aspects in a way to meet the business objectives of each operational area.

First, lets look at the main CAPABILITIES of social media:

  1. Content is user-generated: content, such as comments and conversations, is created by individuals, instead of being seeded by the enterprise.
  2. Anyone can contribute: as long one is a member of the network (e.g., Facebook, Twitter) one can contribute a wide variety of unstructured content such as text, pictures, video and audio.
  3. Anyone can access: a member can access content for which the member has permission.
  4. Sharing: members can easily share content with other members
  5. Transparency: the ease of contribution, access and sharing enables an organization to make more information available
  6. Security: permission for contributing and accessing content is based on permission levels.
  7. Conversation and relationship: social media enables individuals to have a dialogue with an organization, leading to a closer relationship and increased trust
  8. Speed: contribution, sharing and communication happen very quickly with minimal latency.
  9. Integrated networks: content can be shared across networks such as from Twitter to Facebook to Youtube.
From a BEHAVIORAL perspective social media has changed the nature of interactions between users and organizations. Here are some examples of behavior fostered by social media:
  1. Sharing: users are willing to contribute content that will help other members
  2. Transparency: individuals can get more information from organizations
  3. Communication: users can easily connect to each other and to organizations
  4. Conversation: social media enables users to have a dialogue with organizations
  5. Speed: sharing and communication happen almost instantly, similar to the speed of short messaging service (SMS) and instant messenger (IM)
Now we can answer the question regarding how social media can benefit business operations. Let me use procurement as an example. Let’s start with some of the core objectives of procurement:
- streamline process of buying products and services
- lower cost of products
- improve quality of products
How would social media help meet and exceed these objectives? Let’s take each objective and determine how to apply social media.
  1. streamline process: what if a user could easily share information such as “I just ordered a new iPad”? Other participants such as approvers and reviewers can use the notification to expedite the process and have a conversation with the user.
  2. lower cost of products: what if a  purchasing agent could share a PO with multiple vendors? The vendors could engage in a conversation with the agent and the vendor with the lowest bid would gain the business.
  3. improve quality of service: what if users could use the conversation aspects to  provide feedback to vendors? Vendors can use the feedback to provide quicker resolution to problems.
These are examples of how social media capabilities and behavioral aspects can help purchasing operations. You can apply the same methodology to evaluate how social media can help other operations such as order management, manufacturing, human resources or recruiting. Notice that I have not specified any specific tools such as Twitter or Youtube. The key is to use the architectural components such as messaging, users, content and security to configure and construct social media applications.
Can you think of how social media can be used in your area?
Use the following METHODOLOGY:
- determine business objectives of your area of operations
- figure out how social media capabilities will help meet objectives
- configure and build applications
Which operations in your organization can benefit from social media?

Will Color Be Bigger Than Google or Facebook?

Posted in Data mining, Entrepreneurship, Facebook, Google, Innovation, Social Media Marketing with tags , , , on April 22, 2011 by Shankar Saikia

In one’s quest to be entrepreneurial one often ponders new products and ideas. This week I started playing with an iPhone application call Color . This is a photo-sharing application like Instagram, but with a twist. Instagram enables you to take pictures with your iPhone and then share it with friends on a social network like Facebook, Twitter etc. Color is different – first of all it allows you to join a group within a certain distance of where you are physically located. Second, any pictures that you take are shared with that group. Third, and I have not tried this part yet, you can receive messages from group members! It’s a strange application, primarily because it is so different from social networks that we know – Facebook, Twitter etc. In a conventional social network, you join a network. In Color you join a group without joining a social network. Still don’t get it? Me too ;)

Two weeks ago Silicon Valley and by extension the tech world, was abuzz about Color – one reason, and probably the main reason, being that venture capitalists injected $41 million into a series A round into the company. Once I heard about the investment I became curious, downloaded the app and started experimenting. Then I read that the $41 million is part of the quest for “the new Facebook”. I can see why the search for the new Facebook has begun. It appears that Google is having problems, Twitter is having challenges and Facebook is highly valued – so, no time like the present to search for the next big thing. After all, this is Silicon Valley where tech innovation never stops.

While I certainly do not fully comprehend everything about the Color app, I admire the thinking outside-the-box of the founders. In some ways, Facebook is becoming predictable and boring. Maybe now is the time to “friend” someone you do not know, as long as she or he is physically near you – wow! how cool would that be?? That’s just one aspect of Color. There are other angles such as data mining – for example, how does a person behave when in a certain group? Well, just study the data gathered from that person’s interactions in that group…

These are exciting times in this age of mobile, social and cloud!

Any outside-the-box ideas that you are pondering?

Social and mobile and cloud – where enterprise applications are going

Posted in Enterprise applications software, Entrepreneurship, Innovation, Venture Capital on March 26, 2011 by Shankar Saikia

There is a new world order in Silicon Valley, and by extrapolation, the world of technology.  Out are Oracle, SAP, Microsoft and in are Facebook, Zynga, Groupon. The question is: if I am in the enterprise applications space what is the next big thing after Salesforce.com ?

I see three areas of innovation:

(1) Social: with everyone jumping on the Facebook bandwagon, there will be a way to make applications more social. How is this going to happen? I don’t know but I can guess the following

- your work will include more and easier collaboration

- traditional e-mail will disappear and be replaced by concepts such as “Like”, “Recommend” etc.

- sharing will become more common

- the boundry between employee and non-employee will disappear

(2) Mobile: this is the easy one. One will be able to do their work using just a mobile phone. So, the PC disappeared a while ago and very soon the laptop will disappear. Will it be replaced by a tablet (e.g. iPad) or a smartphone?

(3) Cloud: this is an interesting one, because I feel that we are very early in the lifycycle of cloud computing. I predict the following

- the data center as we know it will disappear

- instead you will find cloud centers!

- storage will be a hot area

- there will be a whole new category of Fedex-types of companies that “deliver anywhere” using cloud-based services

Are you ready for all this innovation? Hope you are as optimistic about these trends as I am. We will soon welcome a new class of billionaires …. you could be one of them. How exciting!

Software vendors, tear down this wall !

Posted in Enterprise Software Sales, Pricing of Technology Products, Sales - Basics on January 16, 2011 by Shankar Saikia

Historians say that Ronald Reagan’s 1987 “Mr. Gorbachev, tear down this wall” speech at Brandenburg Gate catalyzed the end of the cold war. Similarly, innovations such as web 2.0, social media, analytics and smartphones have enabled companies to change enterprise software sales and perhaps sales of other products as well.

Traditionally, a salesperson was needed for the following purposes:

- provide product information
- demonstrate product capabilities
- price offerings
- negotiate agreements

Technologies such as the internet, web 2.o and social media have changed the dynamics of software sales. Today customers can research product information using tools such as search and social media. In addition customers can “try-before-buy” by signing up for free trial accounts. Several companies list their pricing on the internet. Vendors that facilitate transparency increase their credibility and reputation.

The benefits to prospects are many, such as:

- increased transparency (e.g., finding information about a vendor by researching tweets, LinkedIn updates etc.)

- pricing clarity (e.g., learn how product is priced by studying online listing of prices)

- increased product knowledge (e.g., online trials, online resources)

Vendors also benefit:

- reduce cost of sales (e.g., instead of salesreps answering questions, have the prospect get answers from multiple online resources)

- improve credibility (e.g., increased transparency leads in increased trust)

With all the innovation in technologies, it is surprising that vendors have not leveraged these technologies to improve the sales process. If customers have started to embrace web 2.0 social media, smartphones etc., shouldn’t you as well ?

2011 New Year Career Resolution – Build a Moat

Posted in Career Management, Enterprise Software Sales on December 25, 2010 by Shankar Saikia

Merry Christmas everyone – it’s been a while since I have blogged.

It’s almost the beginning of 2011 and I am very excited about 2011. At 30 minutes past midnight on January 1 I will head to Miami for a mini-vacation – I will be staying at the luxurious Eden Roc Renaissance Miami for 3 nights and on January 3rd I will watch Stanford and Andrew Luck play in the Orange Bowl. I feel very thankful for a great 2010 and now I am getting ready for a fantastic 2011.  I have a plan to make 2011 fantastic from a career perspective, as I am a firm believer in the saying “if you fail to plan then you plan to fail”.

For 2011 I have one major theme – build a moat around me. A moat?

Moat

Here’s what I mean – I am going to focus on my strengths, get better at what I do and learn a few new skills. My skills represent my moat – to use a sports analogy, the skills represent both my defense as well as offense! To learn more about the moat analogy read this summary of an interview of Warren Buffet and Jay Z

To be specific here are my career-related resolutions for 2011:

- became a better salesperson (i.e., improve the key capabilities: prospecting, qualification, positioning, negotiation and closing)

- learn a key technical skill: mobile programming

These are the skills that I plan to improve and develop in order to widen the moat around me.

How do you plan to build and widen the moat around you?

Sales and Marketing: How Much To Spend?

Posted in Enterprise Software Sales, Enterprise Software Startup Sales, Sales & Marketing Expenses on August 1, 2010 by Shankar Saikia

No matter how functionally rich and technically advanced your software is, you have to expend resources (i.e., time and money) to get customers to buy your product. Most entrepreneurs, especially founders with primarily an engineering background, do not seem to understand this aspect of starting and operating a business. I have heard of only one tech company that does not have a sales force or has very few salespeople (Atlassian).

Here is some data on the what various publicly traded software-as-a-service (SAAS) companies spend on sales and marketing as a percentage of total revenue (source: 10-K reports at www.sec.gov) :

Salesforce.com 47 % ($605 million out of 2009 revenue of $1.3 billion)
Netsuite 46% ($76 million out of 2009 revenue of $166 million)
Successfactors 52% ($80 million out of 2009 revenue of $153 million)

As you can see each of these companies spends over 45% of its annual revenue on sales and marketing. If you are an entrepreneur you should budget at least that much for sales and marketing (perhaps  more on marketing in the beginning so that you can build awareness).

Experts cite many credible reasons for the success of one tech company over another. One reason is the concept of network effects and increasing returns to scale – for example, a platform that enables others to build applications for it (e.g., Microsoft Windows, Apple’s iPhone App Store) – the greater the number of apps, the greater the value of the platform.  Yet another reason for the success of a tech company, especially an enteprise software company, is effective sales and marketing. As I said in the beginning of this writeup, you cannot win with just a great product.

VCs Tell How They Invest (VLAB Event, January 26, ’10)

Posted in Entrepreneurship, Venture Capital, VLAB with tags , , , on January 27, 2010 by Shankar Saikia

THUNDER-LIZARDS! HEAT-SEEKING MISSLES! SEX (almost)! These were some of the topics discussed at today’s VLAB event titled “How my company leap-frogged with the help of funding partners”.

Today’s panel included the following VCs:

Howard Hartenbaum – August Capital
Josh Kopelman – First Round Capital
Mike Maples – Maples Investments
Dave Strohm – Greylock

Ravi Belani from Draper Fisher Jurvetson moderated a great session, most of which had a “hot seat” format – a few lucky attendees got to ask the panel for advice on actual VC-related scenarios.

Here are some of the nuggets from each panelist:

1. Howard Hartenbaum – August Capital

- VC as partner: A relationsip with a VC is like a marriage – you will be spending a lot of time with your VCs and so get to know them well.

- Beat the big : VCs like ideas that involve beating big traditional companies.

2. Josh Kopelman – First Round Capital

- Don’t cross the stream together: He used an analogy from a film (Ghostbusters? ) and basically meant that during fund-raising do not tell a VC which other VCs you are talking to .. or you will get the worst possible term sheet.

- Lower start-up costs/time: it takes less money to start a company and less time to test it out – both are great (e.g., $600K and 6 months now versus $6 million/6 years before).

3. Mike Maples – Maples Investments

- Thunder lizards: VCs invest in companies that can take advantage of “disruptive tectonic” forces in the market and become huge – like thunder lizards (Mike’s movie choice = “Godzilla”)

- Project Big: When you pitch a VC tell them how big an impact your product/service will have. For example, at Motive their opening slide said “we will cut data entry costs by $25 billion!”

4. Dave Strohm – Greylock

- Alignment: VCs and entrepreneurs’ goals should be aligned and investing in common stock (without liquidation preferences etc.) is one way to align interests. He said that unfortunately most deals do not involve common stock.

- Where are the women? : He asked why there weren’t more women in the VC business. Also, when Mike referred to an entrepreneur as “he”, Dave quietly admonished him and urged him to say “he or she” … But, to Mike’s credit his firm’s other partner is a woman and she sourced their best deal yet – so kudos to Mike.

Here are some of my own insights:

Grey Matter: These VCs seem soooo smart – have you checked out Ravi Belani’s profile?

Grey Hair: My own hair is greying  but I couldn’t believe how many in the crowd had more grey hair than me! My guess is that some of the grey haired folks (except for me) were angel investors. With lower capital requirements for starting tech companies (because of cloud computing, open source etc.) I think the number of VC firms is going to decline, meaning that if you want to start a company angel investors are going to be your best (and perhaps only) shot at funding.

Silicon Valley Special: The valley is truly a special place for tech innovation, especially for businesses focused on intellectual property . I doubt if any other place can compete.

My final thought: Tech is just one avenue of entrepreneurship. There are several other sectors where you can create disruptive change – health food, sports, healthcare, travel, housing …… are just a few that I can think of …

What do you think? Do you agree with the VCs or with me?

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