A lot of companies feel the that adopting social computing in their enterprise can lead to a competitive advantage for them, and they are actively working towards it in some shape or form; but few companies are positioned to take advantage of the tools/ resources they are deploying.
Companies trying to derive a competitive advantage by adopting social networking can use VRIO framework (http://en.wikipedia.org/wiki/VRIO) to define their social networking strategy. Social networking is considered valuable but is it costly to imitate or is it rare? While social networking tools are not rare and costly to imitate, social networking is more of an organization’s culture and less of a tool. Cultures, as we all know, are extremely difficult (and hence costly!) to imitate. A culture where employees work closely with others and adopt social networks within an enterprise are rare as well.
One last part of VRIO is often forgotten though. It is the ‘O’ in VRIO. Having valuable, rare, and costly to imitate resources/ capability is not enough for an enterprise to gain sustainable competitive advantage. A firm must be organized, ready, and able to exploit the resource/capability.
Just implementing tools for blogging, Wikipedia, idea factories, social networking within enterprise, etc. will not lead to any competitive advantages. Companies have to consider how they are going to derive value out of these tools and how the culture of their organization needs to be molded to succeed with these implementations. A Social Networking site in itself is more like a digital break room. Employees will simply go there to relax and take breaks. While breaks have value but these can quickly spiral out of control and before you know it, some employees may get so hooked to these tools that they start spending an enormous amount of time on these sites with little productivity gains. It is amazing to see the amount of time some people spend on facebook. While it is great for facebook and its advertisers, is it really good for an Enterprise?
Social Networking concepts, however, can be extremely valuable for companies. These concepts can take collaboration to the next level. One thing I like about Microsoft SharePoint is the way it has changed the definition of collaboration. Before SharePoint, collaboration was often confused with file-sharing; SharePoint added the concept of collaborating around data. If we overlay the social networking concepts on top of the collaboration around documents and data, we would see a glimpse of future business applications. You should check-out Mike Hacker’s post on SharePoint 2010 (http://blogs.us.sogeti.com/mhacker/2009/07/13/sharepoint-2010-tech-preview-site-launched/). SharePoint 2010 will probably steer towards this strategy as well. It would be interesting to see if any major ERP vendors take this approach in any future releases of their ERP systems. Collaborative approach to enterprise resource planning can certainly lead to immense productivity gains for an enterprise.
Recommended Read: “Gaining and Sustaining Competitive Advantage” by Jay Barney
Gaining and Sustaining Competitive Advantage