Leveraging social media data analytics to improve M&A – Lexology Reply

Social media part 3: leveraging social media data analytics to improve M&A – Lexology.

Data Analytics for M&AThere is no question that social media has a role to play in M&A activity.  In a recent survey by Toronto based international law firm Fasken Martineau; respondents reported that they were not only using social media to communicate deals but also for research and due diligence .

  • 36%  for research.
  • 48% for investigation.
  • 72% like LinkedIn to research personalities.  Only 50% said the same of Facebook.
  • 78% disclose transactions through Facebook and 44% use LinkedIn.

More importantly

  • 77% said they have no social media strategy, and
  • 65% said they have no intention of developing one.

DATA v SENTIMENT

There are 2 benefits of social media: (i) expert opinion, and (ii) trending sentiment.  Much of the hype behind the trends in Big Data are about connecting these 2 powerful elements with the hard numbers around corporate valuations.  For instance, an acquirer may wish balance valuations with the trending market sentiment and the opinions of experts.  An extreme example of this is the Facebook IPO where market hype vastly outweighed traditional valuations.  So much so that Warren Buffet said that he had no idea how the valuation was so high and that he just couldn’t value companies like this.  Social media is often seen as an echo chamber; a small community talking to itself.  Posts range from  self-aggrandisement to advertising puffery with very few hard facts and figures in between.  What few figures are there may be real, may be fictional or may be somewhere in between.  The value is in aggregating these figures but the algorithms needed to ensure that the right weighting is placed against the right number based on author, time etc (let alone how they account for hearsay).  the maths behind this is hard enough let alone the semantic interpretation by computers.  Needless to say, when this sort of calculating can be done it will be worthwhile for many and will be, initially, a very, very expensive service.

The moral of the story is  – BEWARE!

Social media remains useful for advertising and developing an extended network of sector contacts in order to deepen one’s contextual market knowledge.  However, as an analytical tool, to my mind, it is still out there with witchcraft.

The Business End of Social Reply

Integrating Emerging Social Software Platforms (ESSPs) into a business is fraught with danger but the payoff can be substantial.  Not only does the company have the potential for positive brand messages to flood a series of trusted networks but it can also leverage the renewed engagement of staff for better knowledge management.  In the end, though, social is fun and sexy but it is utterly irrelevant to most employees until there is some link to an employee’s remuneration.  To rephrase the HBR article I don’t think social needs to get more businesslike, rather, I think business needs to get more social.

The Law of Mobility: The legal implications of BYOD 2

BYOD

The legal ramifications of moves towards corporate Bring-Your-Own-Device policies extend far beyond simple issues of IT security and the legal discovery issues of locally held commercial data.  The biggest challenge facing the commercial world is how far businesses will have to go in regulating the online life of an employee.

Most companies have a dusty old clause in their employee contracts which states that there is no privacy in the use of firm equipment.  Recent proposed legislative amendments in the US and cases in Canada (R. v. Cole, 2012 SCC 53) clearly show that the use of social media on corporate platforms is (a) increasingly permissible  and (b) restricted from company access.  More importantly, it highlights how corporate and personal data are being blended together in a socio-corporate online collage.

Previously, companies and government departments have been able to ignore personal cries for BYOD due to: (i)  enterprise security concerns, (ii) legal risks around e-Discovery (iii) a perception of limited utility in social media and (iv) cost pressures relating to IT support costs.  However, now:

BYOD,McKinsey.Graph

  1. Enterprise security is no longer an excuse.  Increases in corporate cloud-based applications and desktop virtualisation mean that limited data is stored or cached on local devices.  In addition, any security breaches can be isolated to a certain user profile.  In the end, Bradley Manning and Wikileaks highlight the fact that there is little that will stop a disgruntled employee if they are intent on data theft.  Heavily layered, holistic security is the only answer.
  2. Mobile connectivity and enterprise workflows reduce local data storage.  Previously, compliance requirements for eDiscovery have limited the ability to store data locally.  However, mobile coverage is now better and  costs have reduced for 3/4G  and wifi acess.  Coupled with cloud/virtual apps and the ability to sign-in/sign-out documents from company portals means that firms can reap the benefits of extended and flexible working along with greater Discovery compliance.
  3. The benefits of social media have extended the boundaries and time of the corporate workplace.  Corporate blogging has now, apparently, increased to 38% with two-thirds of companies having a social media presence (beyond the 50% level in 2009).  Social media not only provides additional channels for marketing but it also increases both external and internal customer/stakeholder engagement (and such engagement extends both beyond the doors and timeframes of the office).
  4. Multi-Device support does not require bigger IT departments.  In fact, support is far more user-friendly (e.g. Salesforce.com, MS 365 etc) and has not resulted in burgeoning IT departments.  Companies can specify what devices they do support and outsource platform support to infrastructure providers.

The fact of the matter is that companies and government departments must move to BYOD sooner rather than later.  In a recent article, Elizabeth Johnson of law firm Poyner Spruill LLP notes that in the US:

  • 87% of people confirm that they use personal devices at work.
  • 48% of companies state that they will not allow it.
  • 57% of the same companies acknowledge that employees do it anyway.
  • 72% check email on their personal devices.
  • 42% check email on personal devices even when sick.

In fact, many US college students claim that they would accept lower pay for the flexibility to use personal devices at work.  Whatever the case the creeping cloud of BYOD will take hold, if only due to the cost benefits of not having to pay for new devices enabled by better enterprise apps and improved enterprise security.

I would posit that much of blame for limited uptake can be laid on the fact that organisations are simply unwilling to deal with the additional layer of complexity.  BYOD lies at the nexus point of enterprise trust:  their data in your hands.  How far are companies willing to let go of their information in order to reduce costs and increase productivity?  Will the law protect commercial interests in data rather just IP? Or computer based personal records?  In the case of Phonedog v Kravitz the employers (Phonedog) set up the Twitter account “@PhoneDog_Noah”, which the employee used “to disseminate information and promote PhoneDog’s services.”  During his employment, Kravitz’s Twitter account attracted approximately 17,000 followers.  When he left he kept using it and gained another 10,000 followers.  Phonedog claimed that the account was theirs and sued for damages.  The court was satisfied that an economic interest was established and that harm was done.

In brief, the answer is that companies need to define the touchpoints where their data meets the social sphere.  If businesses are to reap the benefits of increased customer/stakeholder management through wider adoption of emerging social software platforms, enabled by BYOD then they need to deal with the added complexity at the nexus point of security, legal and information management.

 

The Social Enterprise: what will business 2.0 look like? Reply

social-enterprise

If Andrew McAfee‘s book “Enterprise 2.0: New Collaborative Tools for your Organization’s Toughest Challenges” is to be believed then:

“We are on the cusp of a management revolution that is likely to be as profound and unsettling as the one that gave birth to the modern industrial age. Driven by the emergence of powerful new collaborative technologies, this transformation will radically reshape the nature of work, the boundaries of the enterprise, and the responsibilities of business leaders.”

Most pundits believe that Enterprise 2.0 is the full adoption of Web 2.o by an organisation.  In the next few years, therefore, we will see:

  • Cloud technologies and better enterprise application security enable bring-your-own-device and with it the greater fragmentation of organisational information.
  • Greater transparency of organisational work through social media leaks (i.e. people advertising their work and mistakes on the internet)
  • The decomposition of many more business processes into micro-tasks (much of which can be outsourced or contracted out).
  • The improvement of distributed working practices enabled by better collaboration tools, devices and connectivity.
  • Increased pace of business through improved self-governance and, in turn, empowered by better oversight (from GRC and finance software to more pervasive CRM implementations).
  • Shorter time-to-market cycles driven by improved idea generation and organisational creativity (so called – ‘ideation’).

So, is Enterprise 2.0 the social enterprise?  Are the benefits of Enterprise 2.0 merely social?  Simply a more hectic work schedule enabled by greater ease of using mobile devices and tighter communities of practice?

McKinsey Social Enterprise

A 2010 survey by McKinsey & Company found that most executives do believe that this is the sum total of Enterprise 2.0 benefits.  Most simply believe that (i) knowledge flow and management will improve.  Many believe that (ii)  their marketing channels will be greatly improved whilst only a few believe that (iii)  revenue or margins will increase in the networked enterprise.

If this is the dawn of the new enterprise then why do so many large businesses find it difficult even to implement Microsoft SharePoint?

The most likely truth is that this is not the dawn of Enterprise 2.0.  We are probably not on the cusp of a grand new age of information work.  Our businesses are unlikely to change significantly, although the hype will be re-sold by IT vendors for some time. One only has to hearken back to the ’80’s to remember to cries of the ‘paperless office’ to realise the low probability of Enterprise 2.0 materialising.

Whether it will be Enterprise 2.0 is debatable but we are entering the age of  The Social Entreprise.  It has ushered in a new age of commercial culture but it will unlikely herald a paradigm shift in commercial structures.  The truth is that human networks and communities operate in parallel to corporate reality.  Networks are how humans interact  – they are not how humans are paid.  Ask anyone who has ever been through or performed a cost reduction exercise.  In short, emerging social software platforms (ESSPs) are fun and sexy but the do not currently affect operations in most businesses.  Emerging social software platforms will make a difference internally when they affect cost structures and not just when they show up in sales figures.  This means that ESSPs need to be able to track and apportion innovation; they need to actively manage workflow (not just passive engines); they need to engage dynamically in governance and highlight good corporate participation and collaboration.   Only once these elements are incorporated into scales of remuneration and talent sourcing will both the enterprise and the workers benefit.

Maybe then we can move to Enterprise 3.0.