Social Networking Target the Enterprise

Emerging method of relationship management poised for corporate success.

Leveraging advance in communication and integration, a new kind of application — corporate social networking — is being folded into the CRM feature set.

Corporate social networking software measures, reads, and evaluates e-mail, instant message, and calendar entries, capturing the name of meage author while protecting the content. The names are then exposed to algorithms that earth, weight, and rank others in the database for possible contact within the company a user is trying to reach.

Startups offering both point solutions and solutions that are part of a greater CRM suite include Contact Network, Interface Software, Spoke Software, and ZeroDegrees.

Early next year ZeroDegrees plans to roll out an upgrade to its current offering that will allow users to tap into group functionality to form associations outside their own companies. In addition, the ZeroDegrees application will gain full Outlook integration.

In fall 2004, ZeroDegrees will release a beta version of a sales intelligence dashboard based on the concept of the semantic Web. The tool uses natural language between systems to crawl the Web and search out relevant information.

For example, the ZeroDegrees dashboard would allow a person in furniture sales to be alerted when a large company leases more space or place ad for employees, thus indicating expansion and the need to furnish new office space, said Jas Dhillon, CEO of ZeroDegrees.

“Social networking is a way for us to build a large network of people who use the system,” Dhillon said.

Questions that remain to be answered include whether corporate users will be willing to share valuable contacts and whether social networking apps deliver worthwhile information.

Law firm Honigman, Miller, Schwartz, and Cohn used Interface Software’s InterAction suite to land lucrative accounts, according to Cynthia Reaves, partner at the firm.

“We use InterAction to strategize about how to approach a client and develop teams of people to approach a potential client on a particular matter,” Reave said.

Interface is unique in that its social networking capability is a single feature in a complete CRM application for the professional service industry. It also uses outside content from companies such as Dun & Bradstreet and Hoover’s to extend and improve the quality of potential contacts.

If you don’t know the name of a company, you can search for companies by  region and revenue; you can ask for the names of all the C-level executives at those companies; and you can match those names to people in our own company who know them, aid Rick Klau, vice president of vertical market at Interface.

Although users at a professional service company that live and die over good contact might be willing to share information, one industry analyst believes social networking has severe limitations in the enterprise.

“A friend of mine [isn’t necessarily] a friend of yours,” said Barton Goldenerg, principal at ISM, a CRM research company.

Goldenberg said that in sales applications, social networking has a good future, but at the middle- and upper-management level it is too intrusive.

“Those people who work in a high-value network of people are careful of who intrudes on that network,” Goldenberg added.

But, according to Ben Smith IV, CEO of Spoke, 47 percent of its users are CEOs or senior executives, and 30 percent are mid level management.

Moreover, vendors such as ContactNetwork are finding users willing to make contacts both inside and outside the firewall.

To rank contacts for relevance, the various solutions use parameters such as frequency of e-mail correspondence, job title, and seniority. All the systems weed out bad contacts.

Because the applications for the most part use XML tags as their messaging device, they can easily reside in larger Siebel or Salesforce.com applications.

But point solutions may not be around long, as established CRM players become keen to the functionality, said Dennis Pombriant, vice president and research director of CRM at Aberdeen Group.

“Companies like Siebel and Salesforce.com are watching this space. These social networking companies will be gobbled up real quick,” Pombriant said.

Pombriant believes the two exceptions are Interface Software, which offers a full CRM product, and perhaps ZeroDegrees, if it can deliver on its promise of extending its capabilities out to sales intelligence.

Social networking as a phenomenon is helping CRM improve the speed of closing a deal, but with a different twist, according to Pombriant. “We are no longer interested in buckshotting the marketplace to do indiscriminate selling. Social networking is trying to identify the best opportunity and people to pitch those opportunities to,” Pombriant said.

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