To demonstrate the application of the “sE=MC²” methodology, 3 principal business scenarios are considered:

• Cost optimisation
• Revenue growth
• Innovation

Each business scenario within an enterprise is a “hierarchy of zones” of activity (discussed in the previous article). The different zones that may be affected in each scenario during the implementation of the methodology, are shown in the hierarchy diagrams.

Cost optimisation scenario

In this scenario we consider the following enterprise hierarchy and the relevant zones:

Fig 1: Cost optimisation scenario – enterprise hierarchy & relevant zones

Fig. 1 depicts the cost zones, many of which are generally reflected in the P&L statement of the enterprise or its business division. Any kind of cost reduction in the short term or optimisation in the longer term aligning with the organisational strategy must finally contribute towards improving the CapEx or OpEx. Different zones may be supported by underlying IT assets to run their operations. The cost of asset utilisation is a function of multiple variables e.g. number of users, intensity of usage, pattern of usage, volume of business, etc.

A social enterprise has the challenge of ensuring that the cost of running the operation is proportional to their asset utilisation i.e. converting majority of its costs to OpEx. When considering long-term timeframes, CapEx in IT and resources should be viewed and justified in terms of Total Cost of Ownership within a finite period of time (which in turn must be shorter than the time horizon of Return on Investment (RoI). Nevertheless, certain zones such as “marketing intensity” may actually go up during an economic downturn; more prospects or potential customers may need to be targeted to achieve conversions. In such a scenario, the objective during this downturn period will be to optimise the overall cost of operations.

Revenue growth scenario

In this scenario we consider the following enterprise hierarchy and key zones:

Fig. 2 shows the various zones involved in an enterprise hierarchy for the revenue growth business scenario. Revenue growth can be achieved my organic and inorganic ways. Organic growth in turn is possible in multiple ways. It can be achieved by increasing the sales or volume of product or by increasing unit price. Volume can be increased by increasing or extending product lines or expanding into an altogether new market. Similarly, inorganic revenue growth can come from acquisitions (M&A) and Joint Ventures.

While pursuing a revenue maximisation strategy an enterprise needs to scale up its operation by increasing production, adding new products, changing pricing, expanding to newer geographies, adding more skills etc.

In addition, the enterprise must manage the risk from failure i.e. it must ensure a fallback strategy in case of any failure without causing much damage to its original brand. Cloud based IT deployment and expansion can provide an excellent support to follow revenue growth strategy. Cloud-based deployments help in scaling up to the desired level with an OpEx-based model. At the same time it allows the enterprise to retract and thus mitigate risk in case of failure by quickly getting rid of ‘tenanted’ hard assets.

Innovation scenario

In this scenario we consider the following enterprise hierarchy and the relevant zones:

Innovation is in the agenda of all enterprises right from the top of the hierarchy to all levels and zones. It does not have any limit imposed by business units, functions, products, services, marketing, HR or even legal departments. As a consequence it is diffuse across the entire enterprise and even outside its boundaries. Innovation happens at all lifecycle stages of the enterprise; it is a critical differentiator.

Enterprises pursuing differentiation as a prime agenda operate in the spirit of entrepreneurship. Some enterprises are entrepreneurial as a whole and some create entrepreneurial islands encircling the central organisation. Naturally, there is sufficient investment by means of time, money, knowledge and skills, for incubate ideas. Consequently, successful ideas may be commercialised or grown to a larger scale by spinning-off independent ventures or by integrating the incubated project as a business division or subsidiary inside the current portfolio of an enterprise.

To inject an entrepreneurial spirit, enterprises look for technology infrastructure as well as collect, analyse and churn large volumes of data, depending on their goals. Data-intensive and technology-enabled optimisation needs computing power besides safety, security, flexibility of access, usage, storage and interoperability. Cloud-based IT infrastructure provide these advantages at acceptable economic prices that do not require long-term contractual obligations or investments in “hard” assets. In addition, a cloud-based deployment helps to free up the enterprise or its innovating business division from the tentacles of lengthy corporate processes – this latter provides the necessary escape velocity that is key to the success of the innovation.

Time is a critical dimension in all implementation projects. In this  methodology, multiple timeframes can be introduced simultaneously in the design and executive of an sE = MC² mission or project. They are as follows:

• Short-term timeframe
• Medium-term timeframe
• Long-term timeframe

It is essential to map clearly the different factors in the figurative equation to the corresponding timeframes, in order to achieve organisational and project milestones without delays and satisfy all stakeholders. The different factors in our equation (M, C, C) play pivots for different timeframes. This connection is discussed in detail in article. In addition, to simplify the project design, functions and operations in an enterprise as grouped into zones.

Short-term timeframe

Any mission or project has multiple stakeholders. Among the different stakeholders, not everyone is equally optimistic about an implementation plan; neither is everyone unanimous about the goals of the project. It is the challenge of the project or programme manager to nurture sufficient support from stakeholders to achieve his milestones at each phase. There is often a considerable faction of stakeholders who need to be satisfied with immediate results. Analyses of high-cost zones at the beginning of a project help to understand how they can be eliminated or reduced without additional CapEx. For this purpose, the frequent pivot used is Cloud-based implementation (or deployment, if the design involves a deployment project).

For example, a quick and simple migration of data / databases and logic onto a Cloud-based platform results in a considerable decrease in OpEx in immediate subsequent quarters.

Caution: Nevertheless, decisions should be carefully weighed, not to rush with immediate cost-cutting plans that can cause “unintended consequences” to ongoing strategy implementation.

Medium-term timeframe

Zones that can be improved in the medium-term timeframe in any business scenario (next article), require a minimum level of training and adoption on tools and processes. For this timeframe, the most relevant pivot is Mobility. Mobility can be used effectively to:

• increase efficiencies in internal functions (zones)
• reduce Time-to-Market for products / services
• start altogether new channels of revenue

For example, in the medium-term timeframe the effectiveness of Mobility solutions is optimal if they can be deployed towards the enterprise’s “Edge”.

Long-term timeframe

Process restructurings require persistent training or redesigning enterprise cultures. Therefore, they should necessarily be placed in the long-term timeframe. For e.g. developing informal communication channels (forums, bulletin boards, etc), and also documenting verbal explanations into structured Wikis or FAQ threads. These latter require not only require time and concerted effort but also require developing a coherent mingling of processes and enterprise culture that would independently motivate personnel in different zones, to organise on their own without written or official mandates every time.

As can be apprehended, the pivot in this timeframe is Collaboration – in the form of informal or semi-formal exchanges. In addition, opening up collaboration to external collaborators (partners, suppliers, co-opetitors) require planned approaches. Problems, issues and requirements need to be structured carefully such that there is smooth informal exchange of information or knowhow, without leaking out strategic information essential for the development of the enterprise. This latter also depends on the type of open collaboration approach adopted – competitive or collaborative.

In the subsequent article, is discussed in detail the key business scenarios that are involved in the sE=MC² methodology.

In this article, it is discussed in detail, each key factor contributing to the social orientation of an enterprise.

sE as in social Enterprise

Here in consideration is any enterprise which needs to adapt to the principal scenarios. The connotation social does not singularise internet companies in “social media”. The enterprise can be in any sector – manufacturing, financial services, marketing, distribution, travel & leisure, government, public sector etc. By definition, an enterprise is an organised collection of professionals “interacting socially” to serve a concrete purpose. As a consequence, the better is the social factor genetically coded in the DNA, the higher is the overall efficiency of the teams, and hence of the organisation as a whole.

Social factors work to engage in new ways with customers, employees, partners and collaborators. Employees engage across an internal social platform to perform more efficiently. In addition, they engage with partners, influencers and consumers ‘socially’ and collaboratively in “Business as Usual” (BaU) scenarios. Social enterprises empower closed-group collaboration using private usage of social networks.

A social enterprise can be looked at as an entity which is connected within a social setup i.e. formal as well as informal set up. Employees, partners, influencers, Governments, students, researchers and even competitors also constitute a Social Ecosystem. Enterprises connected with the wider world benefit in various ways from concept development to product development, from supply chain to distribution management, from sales to customer services.

Work has progressed towards quantising and calibrating the degree of being “social” using ‘social quotients’. Nevertheless, it has not yet been uniformly adopted across sectors; some sectors are more open to others.

Services sectors such as Travel & Leisure which have direct touch with their clients through their services and dynamic pricing tend to listen and stay in touch through its ‘social ears and eyes’. Sectors such as Manufacturing have adopted social approach albeit in a very limited extent. They are still searching for concrete applicability; i.e. justifications for being social. Applicability can be measured concretely if there are one or more individual consumer touch points. For e.g. if a product is a high margin B2C item and sold through a direct channel to individuals or households, consumer-goods manufacturing companies are prone to open social channels of interaction. Moreover, social adoption depends also on the various functions within the central organisation. Customer service functions are at a more vantage point compared to other internal functions – naturally no department head wants negative criticism floating around for too prompt adoption of social techniques.

M as in Mobility

Mobility refers to the agility of an enterprise in making decisions and running its business as usual. Mobility is best achieved if it is pushed to the Edge. We first define the term ‘edge’. Edge means further away from central administrative activities within a large enterprise; physically or geographically but not organisationally. It refers to divisions or units of personnel who are interacting frequently and regularly with partners, collaborators and clients, both on the move or from office. For e.g. a particular business division may not be located at the headquarters or even near about. However, it can be at the core of current business development activities, and thus have a large group of travelling or sedentary personnel in sales and project management. We can thus refer to such a unit or division at the “Edge”.

Enterprises are increasingly promoting mobility with field-workers on the move and consultants and project managers at client-sites. It is well-proven that organisational efficiencies increase rapidly if travelling workforces are given the right tools in hand on-the-move.

Mobility (to the Edge)

In this methodology, the term Mobility is extended further to refer not just to travelling professionals but also to business divisions and project groups that have the capacity to make “mobile” decisions in an Agile manner without the lengthy corporate process of validation with a central organisation. Naturally, to make efficiency improvements for such “Edge” units and divisions, it is necessary not only to equip them with the right set of tools (both analytic and decision-making) but also train them in Agile decision-making processes to effectively use such tools and take the right decisions on the fly.

For example, during a highly competitive bidding process for a large RFP, the responsible Key Account Manager (KAM) would be more Agile than his competitors, if he could make by himself changes to the original validated proposal. These urgent changes are often demanded by the client during a bidding process and responsible KAM or sales contacts need to get back urgently to the client with a favourable response. In such circumstances, the KAM or sales team’s dream is to be in a position whereby they could take the change decisions themselves; instead of validating by a corporate sales board each time a change was requested. Finally, once the deal was concluded the KAM would inform the corporate board about the final proposal and show his justifications for adapting the original proposal, pricing, etc.

However, to have this level of Agile and decision-making capacity at the edge, the KAM would need:

1. A complete set of analytic tools to churn out numbers, pricing and dependencies to justify all changes.
2. Appropriate training in Adaptive processes (preferably Agile), to synchronise his changes with different stakeholders – both internal and external. This would require communication and exchanges in highly heterogeneous formats (emails, instant notifications, conferencing, closed-group forum exchanges, etc). Thus he would need to be well-skilled in edge-mobility processes.

Similar situations arise in project management for client projects – both at the start and during the project. Empowering decision-making capacities towards the organisational edge is becoming a global phenomenon and there is strong evidence from large multinationals such as IBM, General Electric and Procter & Gamble.

BYOD

A related concept opted frequently by innovative multinationals is the Bring-Your-Own-Device (BYOD) where their IT departments support the use of personal mobile devices (laptops, iPhones, iPads, Android devices, Windows phones, Bluetooth devices, etc) employees including office workers. The use could be for conventional business purposes such as agenda management or brainstorming in professional circles (via Facebook, Tweeter, LinkedIn, etc). This is often referred to as “employee-liable” strategy (as opposed to conventional corporate-liable strategy).

This essentially means that organisations are adopting policy driven usage of devices than rules driven to empower the workforce yet asking them to be responsible for their own behaviour to use their time productively yet being connected with key stakeholders.

When it comes to the benefits companies receive from BYOD, company CIOs identified, the following major ones (2):

Increased productivity: Overall, the primary benefit IT leaders see from BYOD is increased employee productivity, both in terms of greater output and improved collaboration with others.

This finding contradicts employers’ fears, that employees are distracted by exposure to personal applications and content (e.g, social networks, games, unauthorised sites for personal business and entertainment). This has been a regular argument against mass adoption of BYOD.

• Increased job satisfaction: Employees want to use the same devices for work as well as for their personal activities. When allowed to choose their own devices, employees are happier and more satisfied in their work. This is closely connected to the philosophy of the “millennial worker” discussed in the next section.
• Reduced mobility costs: due to employees paying for part (or all) of the costs of their mobile devices and to improved IT resource utilisation. It is a top benefit for several EU countries such as France and UK.

Here are some key findings on BYOD with regional and organisational flavours (2):

• In all organisations – MNC or SME:
  • There is a high degree of consistency between midsize companies and enterprises in attitudes toward BYOD.
  • Globally, 89% of IT leaders from both large enterprises and midsize companies support BYOD in some form.
  • 69% view BYOD contribution as “somewhat” or “extremely” positive.
• Regional acceptances:
  • Asian and Latin American companies encourage extensive BYOD, while Europeans are more cautious and restrictive.
  • USA is the overall leader in BYOD adoption and policy.
  • USA and India are ahead of other countries in desktop virtualisation. Other IT leaders are aware of it, but implementation is still lagging.

The Millennial worker

Third and a equally pressing factor is the emergence of the millennial worker. These are young knowledge-based professionals, who want to keep multiple options or choices. They want to have the independence to switch contexts in their daily lives and yet stay productive for organisations. They want to run their work and also enjoy their social lives simultaneously and seamlessly. They want more freedom and in the process they want to add-value to their personal lives, the organisations where they work, and to society. This is a driving factor in many organisations for the adaption of mobility.

C as in Collaboration

Given all the above, the key human requirement is of continuous collaboration and interaction of data in unstructured or highly hetero-structured forms (emails, SMS, video, documents, notes, tweets, comments, etc). Depending on the scenario, both employees and external collaborators need to exchange frequently, information and professional opinions on projects, products and roadmaps.

In our methodology, when we use the term collaboration, we mean specifically “open collaboration”. Open collaboration, per se, has wider ramifications in corporate as well as entrepreneurial setups. It is not within a single enterprise but often transcends organisational boundaries. Open collaboration helps in reaching out to the right group of people – clients as well as collaborators, irrespective of their location or enterprise – to work on a particular problem or design a precise solution, . The goals, interests and motivations can be various as explained in the following subsection.

Different types of collaboration

Open collaboration is primarily of two major types: Community-basedcollaboration and Competitive collaboration. We will discuss them in detail below. In practical implementations, the case may be a hybrid of these two major types of collaboration.

The exact type of collaboration that must be adopted depends on the goals to be achieved from the collaboration. We will explain the implementation for the cost optimisation scenario.

Community-based collaboration

This type of collaboration is required when the optimisation problem requires the full might of cumulative knowledge to continually build on past advances.

When: According to our methodology, organisations should incorporate community-based collaborative methods as part of their social enterprise strategy in the following situations:

• When the Technology or the Design or the Optimisation approach:
  • has yet to be established or explained
  • creates an Incentive to share knowhow
• When the customer or internal needs:
  • are not fully or clearly understood
  • are highly varied or changing frequently
• When the development process is such that a distinct part of it can be separated at arm’s length for working with external collaborators.

Mode: The interaction is governed loosely by social norms & soft rules to encourage:

• Open access to information and knowledge for the collaborating parties
• Transparency of information, decision-making and processes
• Joint development in projects and processes
• Sharing of common Intellectual Property for individual use in each organisation
• Mutual respect between participating organisations and professional individuals

Examples: The world of Open source solution is one of the best examples in this category – Linux, Google Android, Apache, and many others.

Reward: As this type of collaboration requires group work that must extend across organisational and / or individual boundaries, the rewards need to be oriented towards intrinsic forms of motivation. Intrinsic forms of motivation include fun and enjoyment, higher degrees of autonomy in personal and private life, improving professional and personal identity.

Competitive collaboration

This type of collaboration is required when the optimisation problem is best solved by broad experimentation. There exists no single solution to the problem, multiple partial solutions perhaps. Rather different solution paths need to be tried out to understand the optimal solution.

When: According to our methodology, enterprises should incorporate community-based collaborative methods as part of their social enterprise strategy in the following situations:

•  When there is the need for broad experimentation:
  • of technical approaches to solve certain problems
  • over different customer groups or internal departments that require solutions
  • on product features or service definitions

• When regular creative destruction is a necessity:
  • to foster diversity and heterogeneity of the different solutions
  • to encourage competition between collaborators in the value-chain

• When the possibility exists to offer clear incentives:
• for competition between collaborators
• to search for new solutions and products
• to protect collaborators own IP

Mode: The collaborating parties or some of them develop multiple competing varieties of complementary goods, components or services. Then they allow customers to choose from their competitive offerings. The collaborators are strongly focussed on their own economic interests.

Result: The resulting environment is of fierce competition. Naturally there is very little cooperation between collaborators.

Examples: Games and music distribution platforms fall clearly in this category: Nintendo, Sony-Playstation and Apple-iTunes are strong examples of competitive collaboration platforms and the corresponding ecosystem.

Reward: As this type of collaboration requires pitching competitors, one against the other to bring up their best contribution, the reward for collaborating needs to be oriented towards extrinsic forms of motivation. Extrinsic forms of motivation are money, direct needs of collaborator, immediate career interests of professionals.

While it is important to collaborate between human beings and groups, frontiers of collaboration are being pushed to include machine or devices as well. Increasing number of gadgets used both in household and corporate environments, are being adapted with collaboration and Machine-to-Machine (M2M) interfaces. Computers, TV, mobile, gaming consoles, tablet PCs, universal remote controls, and healthcare diagnostic machines are some examples of devices which are used in our everyday lives and which enable collaboration at the machine level.

Collaboration necessarily churns enormous amount of data in heterogeneous forms and types. At the lowest level data and data-flows can be highly unstructured. The higher the degree of formality in communication the more structured is the data generated through it. Naturally, with social inclusion the volume of unstructured data outweighs the structured data. Enterprises are trying to collect, analyse, collaborate among them to delivery predictable service with deeper insights.

C as in Cloud-computing

Cloud computing provides an infrastructure that allows manufacturing and service companies, public-sector enterprises, insurance companies, and research facilities to tap improved computing resources at lower initial capital outlays. Cloud computing caters to the key technology requirements as follows:

• Enables on-demand access to computing and large storage facilities which are not provided in traditional IT environments.
• Supports Big data sets and Big-data flow – both internal and external to the organisation.
• Facilitates the sharing of unstructured data and multiple stakeholders that may also be geographically distributed, providing more timely access to critical information and reducing the need for duplicate testing.
• Improves the ability to analyse and track information (with the proper information governance) so that data on products, projects, costs, performance, and effectiveness studies can be analysed and acted upon.

When considering a move to use cloud computing, consideration must be given to the different of cloud delivery models:

• Infrastructure as a Service (IaaS),
• Platform as a Service (PaaS),
• Software as a Service (SaaS),

Each delivery model brings different requirements and responsibilities. The choice of the right cloud deployment model (private, public, and hybrid) also weighs heavily in strategic decisions.

In the subsequent article, is discussed in detail the different timeframes that are involved in the sE=MC² methodology.

The Framework

Our methodology is summarised in a simple figurative equation as follows:

Here, the terms mean the following:

• sE : refers to a social Enterprise. This can be any enterprise which needs to adapt to the principal scenarios. The connotation social does not singularise internet companies in “social media”.

• M : refers to Mobility of the workforce and the enterprise in its daily operations or in its adaptation to new scenarios.

• C: refers to Collaboration :
  • internally between  employees, projects, business divisions
  • externally between suppliers and coopetitors.

• C: refers to a Cloud-based approach to the implementation. Can be:
  • Private or Public or Hybrid cloud
  • SaaS or PaaS or IaaS solution for ERP, CRM, R&D functions
  • Elastic resources on demand

The above expression is more than an equation. The left-hand side shows the vision and goals of the successful social enterprise. The right-hand side gives the complete set of ingredients required to reach the goals. The mapping of the vision-goal (left-hand side) depends on the key issues and wish-list on the CEO’s table. The implementation using the correct mix of ingredients (right-hand side) and the different phases of implementation depend on the scenario chosen.

In the subsequent article, is discussed in detail the different (right-hand) factors that contribute to the overall social efficiency of an enterprise.