CIMdata PLM Industry Summary Online Archive
6 January 2011
CIMdata News
The Social Network & Product Development by Peter Bilello
Columns From: Time Compression, Peter Bilello President, CIMdata Inc.
Social networking continues its meteoric rise, with time spent on media such as wikis, blogs, instant messaging, visual conferencing, and chat rooms growing exponentially in recent years.
According to Nielsen Online, time spent on social networks increased 277% in the United States during 2009, and Twitter grew 1,382% year-over-year in February 2009. A presentation at a recent Twitter developer conference noted that an average of 180-million people visit the site monthly. The site signs up new users at a daily rate of 300,000 and its search engine receives about 600-million queries every day. Facebook claims to have more than 500-million active users, half of whom log onto the site on any given day. As an indication of global reach, about 70% of Facebook users are outside the U.S. A growing number of social media sites are being used for business purposes. According to a survey by Jobvite, an Internet platform for referral hiring, 83% of its respondents use or plan to use social networks for job recruiting in 2010: 78% using LinkedIn, 55% Facebook, and 45% Twitter. These statistics are stunning–even to the most cynical business analyst–and they demonstrate that social networks aren’t merely a passing fad just for kids.
In contrast to websites where users passively view content, social networks and social media are based on Web 2.0 social computing technology with applications that facilitate creation and interactive sharing of information among groups of users. As such, the sites facilitate collaboration with highly iterative exchanges of information and opinion among potentially very large groups of participants.
Game-Changing Impact
Part of the popularity of social networking may stem from the innate need for people to communicate and connect with one another. Humans are hard-wired to cooperate and share opinions, notes Tribalization of Business: Transforming Companies with Communities and Social Media, a 2009 study from Deloitte LLP. It reports that the positive impact of social networking communities on business has the potential to be game-changing. The study–which measured responses of more than 400 organizations, including a hundred Fortune 500 companies with online communities–found that the top business objectives are to engage with customers, partners, and employees to increase word-of-mouth, customer loyalty, branding, idea generation, and improved customer support. Resolving a customer problem through an on-line community, for example–either by a company representative or by another community member–can boost customer satisfaction and amounts to a tremendous cost savings.
At many of these companies the primary driver of such initiatives is the marketing group, which views on-line communities as a low-cost–or no cost–way of amplifying the company’s marketing message. Consequently, efforts usually are not focused on gathering or disseminating data or insights that could prove useful to other groups within the enterprise such as product design and engineering. A recent CIMdata opinion poll indicated some companies are starting to use social computing and other Web 2.0 technologies in their product development processes, although on a very limited basis. Specifically, 9% indicated they use these solutions a great deal, 25% indicated some use, and 24% very limited use.
What Holds Companies Back
One major factor holding many companies back from embracing social networking is the view of social computing as an amorphous concept–an approach that cannot be tightly controlled or managed for significant benefit to the company. Rather, employees are perceived as wasting time on non-business activities instead of explicitly collaborating among the various individuals and groups working within the context of product development. This perception of abuse is reflected in company policies at a large number of organizations. David Armano, a senior vice president at communications firm Edelman Digital, wrote in the November 2, 2009 issue of Harvard Business Review that approximately 70% of organizations ban the use of social media, thus reinforcing the trend for people to increasingly interact with networks using mobile devices. Facebook reports that more than 150,000 active users assess their network through mobile devices and that these users are twice as active on Facebook as non-mobile users.
Companies may also be concerned that commercial social computing solutions have not been designed with privacy and data security as fundamental capabilities and that this could put product designs, sensitive information, and proprietary data at risk. Indeed, the social networking technologies offered by today’s PLM solution suppliers are relatively new and basic in nature–but nevertheless represents significant steps forward. Some PLM solution suppliers are cultivating their own customer communities while others offer social networking enabling technologies from Microsoft and other software suppliers. A few PLM solutions are designed to mine the managed data of knowledge buried in social networks.
Analytics Unlock Huge Potential
Beyond monitoring social networks, such PLM search capabilities and analytics of making sense from captured information hold the key to unlocking huge potential benefits of social computing. This involves more than merely monitoring and reporting of raw numbers; such capabilities provide knowledge-based intelligence technologies to gain insight and identify patterns or trends from volumes of seemingly random or unrelated data, and filter out the noise and chatter from meaningful knowledge useful to a company. Such insight has the potential to integrate the voice of the customer into product development, capture requirements, evaluate sentiment, predict trends, and anticipate buy preferences–all of incredible value in the early stages of product development when design concepts are just starting to take shape. Some companies are beginning to look to social networking as a mechanism to support “crowdsourcing,” where individuals outside the company (e.g., suppliers, partners, customers, and the general public) are invited to contribute ideas and suggestions for new products and perhaps even create new designs in what is known as “community-based design” or “distributed participatory design.” Additionally, some companies are expanding the scope of these activities to include other product lifecycle management tasks.
Other companies are using social computer technology to establish internal collaborative product development sites that allow participants–often in different locations and time zones–to pose questions and share comments as well as exchange CAD files, documents, spreadsheets, presentations, etc. By bringing in people from departments such as manufacturing, finance, marketing, or customer service, for example, product development specialists can get input from a diverse group on various aspects of a new product that might otherwise might not be considered or accurately perceived. This collaborative social computing approach manages these seemingly unstructured exchanges by collapsing comments strings and attaching the initial image or statement that prompted it–much like Facebook does.
Benefits & Challenges
Getting the most from this new way of working and the social computing technologies offered is yet to be fully understood within the context of product development–generally a hugely under-exploited area of social networking. CIMdata’s experience is that, if properly implemented, social networking within a product lifecycle management context has the potential of providing huge benefits. Collaboration takes place in bringing people together–often from different disciplines–in an unstructured way. Valuable information and insights are gained by interacting with people from outside the company, especially interacting with customers on a more interactive basis. Early product concepts can be readily evaluated.
What’s more, to attract the brightest and best employees, companies must recognize that today’s and tomorrow’s knowledge workers expect to interact in this highly-collaborative manner. Benefits such as these may prove to be elusive to many organizations, however, that apply traditional cost-benefit evaluations to new ways of working that have yet to even begin to reach their full potential.
The PLM industry has an opportunity to lead the way in using social networking within a business environment. Indeed, the knowledge obtained from social networking could become an important element in the body of diverse information managed by PLM, which serves as a digital highway supporting the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise, and spanning from product concept to end of life—integrating people, processes, business systems, and information.
Social networking within the business context is still in its infancy, however, and much work remains in adapting this new tool for use within a business context. Building on initial strides already made, many challenges remain in extending existing social computing capabilities and breaking new ground in areas such as:
• Capturing, analyzing, and managing social media information.
• Extracting meaningful data and useful knowledge out of unstructured data.
• Putting structure to social computing without hindering transparency and free flow of ideas, concepts, and product-related information.
• Directing social networking initiatives within a broad range of disciplines for the overall benefit of the enterprise.
• Establishing corporate policies that enable employees to participate in social networking without compromising corporate intellectual property or risking the release of potentially damaging information.
The overall objective should be to utilize social computing technologies in providing enhanced collaborative environments for PLM users that further expand the use of PLM within and across extended enterprises. The competitive advantage of leveraging social networking in product development process could be enormous, as are the business risks for companies ignoring the yet untapped sources of knowledge they never knew existed.
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