Social medias : don’t mistake revenue for organizational performance

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Yesterday morning someone pointed out this  CioInsight survey to me (the publication date isn’t mentioned although it would be an useful information…).

It tells us that, among the technologies that will be expected to drive revenue, only 11,5% of enteprises quote social networks and only 12.3% quote wiki. Does it mean enterprise 2.0 is unable to generate revenue ?

My answer is “not obviously wrong”. And if one would tell me I spend my time saying the opposite I’d answer people have to be careful of the words they use and the concepts they use.

Let me explain.

We are talking about an increase in incoming financial flows. They are, generally, generatred by sales. The only technologies able to have such an effect are those that can generate revenue directly, like a e-commerce platform for example. On the contrary, any technology that is not in front of the customer when he buys won’t help to generate more revenue by itslef but by what it brings to its user in order they increase the sales revenue.

A social network or a wiki won’t generate any increase in financial flows by themselves. But, used by a sales team, they can improve its efficiency and help them to generate more revenue. By answering faster, finding the right expertise to bring the best answer in the shorter amount of time, by making everyone’s activité more visible and, in so doing, making cross-selling and upselling more easy, by creating conversations workspaces with customers, an organization enable its sales people to be more efficient at doing what are their primary missions : acquire new customers, retain extisting customers and make the revenue pat customer grow. But one condition has to be satisfied first : tools must be used as business tools, implying to redesing some worflows if necessary. Tools won’t solve by themselves issues that are organization and human by nature, but may be a part of the response. Used by a team in charge of bringing revenue, with a business purpose driven use (and not a nice to have peripherical use) this kind of tools may help to increase the revenue.

And what about other situation ?

Don’t mistake revenue creation / increase for organizational performance improvement. In the previous case we saw that improving a sales team organization performance helps to increase the revenue. But what about non sales teams ? The above mentioned tools helps them to be more efficient while creating useful synergies provided they are used as business tools. They don’t generate revenue by themselves but allow a better sue of corporate ressources which are not more than the part of the revenue allocated to operations. That’s to say doing more with as much ressources or the same with less, which is about cost-efficiency and allows not to make more mony but to save some or not to make more expenses to face an increase in activity.

The increase in revenue generated by sales is a mean to improve financial results. Improvements in organizational performance with constant revenue is another one.

By the way it reminds me of the JEMM Research survey : before driving conlusions from the answers, it’s useful to read how the question was formulated.