Enterprise Relationship Management

Dan Keldsen Interviewing Geoff Hyatt of Contact Networks about one enterprise variation of Social Networking usage, Enterprise Relationship Management

Full transcription is available by following the permalink to the full entry.

Complete Transcription follows:

Dan Keldsen: This is Dan Keldsen, Senior Analyst and Consultant with the Delphi Group in Boston, Massachusetts. We can be found at www.DelphiGroup.com or give us a call at 617-247-1511 or 1-800-Delphi0 which is 1-800-335-7440.

This interview with Geoff Hyatt, founder and CEO of Contact Networks in Boston, Massachusetts. We'll be discussing the recent and rapid evolution of social networking and specifically the application of social networking via technology and an enterprise setting which is being called Enterprise Relationship Management.

Some upfront details on Contact Networks are www.ContactNetworks.com or 617-305-7961. Let's start it off here. Geoff, if you could provide a brief background of yourself and Contact Networks.

Geoff Hyatt: Thanks Dan. I appreciate you having me here. I was at the Boston Consulting Group where I had the opportunity to work with the world's leading technology companies. It was there that a spark of an idea for Contact Networks was first born.

I also had another startup idea that I wanted to pursue and that led me to found and lead a company called Strong Numbers known as the blue book for everything which now belongs to Intuit.

After that transaction in 2001 we launched Contact Networks which is focused on helping professional services companies maximize their sales by leveraging their most valuable unique asset which is the extended network of relationships that their employees have to the outside world.

Dan: Makes sense. We'll probably list a little further detail about exactly what your solutions do and why this area is gathering steam on the adoption front. To be blunt with people, and they've heard this from me if they've seen any of my presentations in the last couple of years on Social Networking 2003 or 2004 - Social Networking to me and most of us at Delphi here looked like a completely useless topic for the enterprise and wholly focused on personal social networking.

Frankly, I was getting about six months of continuous pings with LinkedIn invites and was getting annoyed. I finally decided to stop ignoring that and take a brief initial deep dive. Frankly, I was shocked.

It was actually on the space from both a personal social aspect which is all sorts of fun. But of course, also from an enterprise view which is more about what we're going to be speaking about here.

At the time, so 2003, 2004 time frame, not only with the consumer personal social aspect - social networking was burning hot at the time including a whole lot of activity by the VC community which seemed to me like the giant sucking sound of another "bubble."

But knowledge management via social networking analysis and expertise location or expertise management as some prefer to call it was bubbling up again.

In earlier days, KM was actually starting to once again be seen not as a dirty word or phrase but seen as a real set of issues that could be addressed via technology and not a massive over intellectualizing and over ambitious solution set that had really killed the potential of the market from the earlier days (of KM).

Combine that with books like The Tipping Point, Linked, Six Degrees, Sync, Nexus and a whole slew of others and viola! - A "tipping point" for real business applications of social networking had come to life. Given what these systems can potentially do, if not, in fact, not a huge surprise at the fresh interest came at the beginning of the end of lean years in the tech world.

The academic bubble of social networking finally burst and we got back to applying the basics. The idea of making some progress without trying to solve everything as a lot of systems and social networking systems really tried to blow out of the ocean. Don't oversell what's possible, but try to get something done.

In the course of my dive into this world, I interviewed roughly 100 people using social networking and actually used LinkedIn as one of the ways to get in touch with people to find out what they were doing. I discovered that real solutions were actually finally arriving. Some had been reborn and made it through those lean times.

In any case, it's very interesting times. Then the next wave of interest came along in the world and blogs and other social systems dropped social networking itself off the map for a bit. But then, back in the last six to nine months or so knowledge management, social networking, enterprise relationship management are all picking back up again.

There's been a lot of activity all of a sudden. It's kind of been on a low burn for a while. I could talk about this all day long, but if you're here and reading this prior to April 11, 2006 you could hear me for another hour or so on this topic at our Information Intelligence summit in Arizona.

Now, let's cover more exactly what Contact Networks does. What is the real business need or pain that you have uncovered Geoff?

Geoff: Well, as I mentioned, the idea for Contact Networks was sparked when I was working at a global management consulting firm where relationships are the number one driver of revenue generation, new client development. Specifically, acquiring new clients or cross selling to existing clients is based on personal relationships between consultants and their prospects.

One of the great advantages that a firm with 5,000 people and 61 offices around the world has is that there's always a good chance that someone at the firm knew someone that I was trying to meet.

The challenge was that it was really very difficult to uncover who it was in our firm who knew the person or company I was trying to get to.

Dan: So, what did you do to find out who might know someone that could be valuable to you?

Geoff: Well, we did then what most firms still do today. We'd send out a blast of emails to our colleagues. We'd call people who we thought might be able to help. We'd check our CRM system. We'd wander the halls and see if any of our local colleagues might lead us to someone who could help.

Dan: And none of that was terribly effective or efficient. From what I've heard, blasting the entire organization or even a small portion can be a potential career limiting move as I've heard.

Geoff: Well, exactly. Obviously it's quite time consuming. It's disruptive to all the people who couldn't help. Often times you don't discover which of your colleagues can help until it's too late. Blast emails are not a professional corporate tool for a modern company.

The advantage we had at Boston Consulting Group of having hundreds of thousands of relationships but no easy way to uncover who knows whom and that's where the idea was born for Contact Networks.

Dan: I'm sure other people are wondering. Is this a solution that's in search of a problem? Or, aren't companies doing relatively well today with this sort of issue?

Geoff: Well, sure, some do. But of course some firms want to do better. They realize that their relationships are under utilized enterprise asset and they want a way to search for and immediately identify the colleagues that can help without having to disrupt everyone else or spend a lot of time searching in the process.

Dan: Right. This idea of seamlessness, transparency unfortunately the water is kind of murky from organizations looking to tap into the assets of their relationship network. Are there any interesting steps that you've uncovered from the clients that you've worked with thus far?

Geoff: Yes, definitely. We perform some data analysis last year where we discovered that each professional has approximately 1,100 relevant relationships for the enterprise. Therefore, if you have 100 people in your firm, that's over 100,000 unique relationships that could potentially be useful to the business.

By using enterprise relationship management software like ours firms transform their individual employee relationships into a competitive corporate asset.

Dan: And these numbers got very large very quickly. This is actually one of the main reasons why it has taken us this long to bring social networking or enterprise relationship management to the masses, getting the algorithms cooking and avoiding endless loops. The relationship chain is just slightly difficult isn't it?

Geoff: You bring up a great point Dan. There may be multiple people in your firm that have a relationship with someone you're trying to meet. In fact, imagine there are 30. This adds another layer of complexity to the problem because using traditional methods like CRM systems you have no way of knowing who has the best relationships.

To be effective a system really has to be able to calculate the strength of each relationship.

Dan: Yeah, not just that there is a relationship. Although, finding a single relationship is awfully handy as well. That's probably buried in places where people just couldn't find them previously.

I can see this being applied to many areas. I've kind of talked about this for a couple of years. But, who specifically is using this sort of thing right now?

Geoff: Quite a few firms. The quickest adopters are the businesses that rely on relationships for business development. We found that professional services firms such as financial services, law firms and consulting firms have been very quick to embrace CRM. Fortune 1,000 companies with global sales forces are early adopters as well.

Dan: So, just as advanced linguistic analysis and other applications of search so you'd have an option in pharmaceuticals or R & D heavy organizations where intellectual capital is highly prized and areas where person to person contact is highest or relationship based.

Our relationship capitol is traded or at the very least, sought desperately. It seems that that's the early edge of the curve. Are there any particular thresholds for the size of the enterprise?

Geoff: We have customers of all shapes and sizes. Our largest customer is a management consulting firm with 5,000 employees in 61 offices around the world that I referenced before. Also, there is an Amlaw 100 firm with 900 employees and seven offices in North America and abroad.

Let's see, we also have smaller firms that like the ability to collaborate more efficiently and effectively such as Graylock Partners. They're a tier one venture capital firm with 50 employees. Sagen Advisor is a private investment bank with 56 employees.

Most firms that use our enterprise relationship management software have between 500 and 3,000 employees.

Dan: We're talking relatively at least the medium sized, medium to large enterprise. I do think that even the small guys who are trying to be much more adept or agile are also avid adopters of this. That's not something you always see in enterprise software.

How do these folks use it?

Geoff: Everyone in a firm can benefit from enterprise relationship management software. The executives that typically bring it into a firm are chief marketing officers, head of business development, head of sales, knowledge management executives.

They use the solution every day to uncover which colleague can help them to get to the prospect, clients and to grow the business. Partners in professional services firms use the solution if they have a meeting with someone they've never met to find out if there's a mutual connection with someone else in the firm.

If they have another meeting in another city and they want to find out who else they might be able to set up a meeting with while they're traveling. Some use it for reference checking during their recruiting process. Others use it because it's a quick way to begin collaborating with peers at a newly merged or acquired company.

Dan: Let's get some exact details for the listeners, readers. How is it in particular that your solution works?

Geoff: One of the most appealing parts of our solution is that it's a search technology. It doesn't require any manual data entry. The software resides securely behind a firm's firewall. It analyzes every source of data that's available.

Some of the data sources that the solution can analyze are electronic address books, email traffic patterns, calendars, CRM systems, marketing databases, HR and other contact databases.

Dan: And these are all sources that search technology in general might already be indexing. Although, there are frequently gaping holes in what enterprise search is actually tapping which is something my colleague Hadley Reynolds jokes about.

That there is no such thing as enterprise search because no client we have ever seen has actually able to search everything. Given that search is not new, why don't buyers of search already have what they need and how are you different?

Geoff: That's a fair question. The meaning of enterprise in enterprise relationship management isn't about searching every database and system in the enterprise. We want to target the systems where there's relationship information.

It's about providing an asset to the enterprise through the ability to catalog, search and leverage all the valuable relationships the firm has. Of course the more data sources available, the more comprehensive the search.

But even if firms use one data source such as email traffic patterns, it provides tremendous value that they weren't able to get before.

Dan: Right. We see that in other instances of search or contact management that email is what people live and die by and probably more frequently die by it, from the sheer volume. But it's generally not an effectively wielded source of information just because the scale of it.

I hear that when I or anybody else here that uses email to identify relationships, privacy issues obviously come to mind. Given the security in privacy hat I frequently wear when doing consulting, I know it is possible to feed on this without revealing it all which we'll probably explain to others. How do you address those sorts of issues?

Geoff: Privacy is a crucial issue. It's something we've gained a lot of experience with in the past four years across our customer base. First, I'll address the email traffic pattern analysis.

We don't analyze the subject line or the content of the email. In fact, the software doesn't ever access it for privacy and sometimes for legal reasons. The solution that we have is solely interested in whom. So it analyzes the ‘to' and the ‘from' line in the email and of course the time and the date that the message was sent or received.

What we've found is that most companies, they want to follow the natural business practices when it comes to sharing relationships. There's a lot of politics involved in relationship sharing. We aren't in the business of politics or changing behavior.

We want to provide a solution that helps professionals get the most relevant information faster. What we've done is to implement three levels of privacy at the solution, enterprise and individual level to insure that everyone, regardless of their preferences, has a setting at which they're comfortable.

Dan: Right. I find it ironic that while it may be an initial instance of panic at the very idea that their email is being exposed via any means, the idea of an automatic big brother is a scary thought after all.

How do these implementations roll out? Even though they might make me scared initially, do they still use the system or do people opt out and end up crippling the system at all?

Geoff: It's worked out very successfully. The participation rate across all our customers is over 99% opt-in. The reason is you really have to set it right for each enterprise.

Every company has a different culture and different mindset around what is acceptable to share and what should remain private. You have to set the settings right for that culture. There is a right setting for every company. If you find that and do it right, then every company can achieve a 99% opt-in for sure.

Dan: If you didn't have the option to slice and dice this fairly finely, it's entirely like in your participation rate which is the rate that internal employees are allowing their email to be food for this engine would be much lower than that. That's the sort of thing the psychology of tech adoptions is always fascinating to me.

If you didn't have that capability, then people would run away. Having it just means that it's just that much more likely to be comfortable that even if they're not taking advantage of all the privacy features you might offer, it's still there and they can turn it on if they needed to.

Now, in general, this enterprise relationship management sounds a whole lot like customer relationship management from at least a couple of standpoints. How do you tend to explain the difference? What's the benefit beyond CRM?

Geoff: I know ERM, the acronym and CRM the acronym are very similar. The products are really different. ERM can be used as a great compliment to CRM. You don't need a CRM system to run and benefit from enterprise relationship management.

Dan: Right.

Geoff: Some of our customers have CRM systems. They use our solution as a way to enhance the power of their CRM initiative because our solution doesn't require manual data entry and because it analyzes multiple data sources. The search is more comprehensive.

In fact, it's able to leverage and identify up to eight times more relationships than a CRM system alone, mostly because it's more inclusive. Most firms that have CRM don't provide access and don't include every employee in the firm.

But any employee can have a valuable relationship. Just because they're not in sales, they might be in engineering or finance; they can have a valuable relationship and be ready to share it with the company.

Our solution includes all employees in the search if the company wants to do that. Just one more point on that Dan. The difference between ERM and CRM is that in CRM even if you do find the names of 20 people that have a relationship with your target, there's no strength of relationship information there.

That analysis of which relationships are stronger is very important when you're asking for an introduction. Like Google results are search results are sorted by relevance score and it provides a ranked list of contacts, colleagues based on a proprietary algorithm. It has 37 variables that score relationships strength.

The stronger relationships are at the top of the list. The weakest are at the bottom. That makes the information really very actionable. You can immediately ask, in a virtual sense, your entire firm to say, “Hey, who's got the strongest relationships to this target or this prospect,” and get everyone to answer immediately.

That's something that every firm has dreamed about and no one has been able to do.

Dan: Even if you do have those people in the CRM system you'd still have to read through whatever content is the CRM system to try and unearth what it is that makes a strong relationship or hunt down your favorite sales guy or whoever it is that might have the relationship for you to leverage.

In this case, that sort of bubbles up to the top and you might still ask your colleague, “Really, what makes this guy tick and can you get me an introduction?”

Otherwise it gets that much farther down the line to the initial contact stage. Chatting around the water cooler perhaps the Starbucks line these days is fun, but digging out hidden relationships is a lot more luck and hard work than anything without tools that actually expose these relationship networks.

Competitively, who else provides enterprise solutions in the enterprise relationship management space?

Geoff: There are others. There's a company called Visual Path and a company called Branch It that offer ERM solutions. Each one has a different approach to solving the same problem. If you are thinking about introducing the ERM Solution in your own firm or company, you should be sure to evaluate all three options and find out which one, which approach best, meets your needs.

The best way to choose, of course, is to talk to as many references as possible and learn why the solutions have been successful for them. So you can benefit from the experience of others and learn some best practices for launch and adoption.

Dan: This space is not quite as brand spanking new as most people think. The early adopters have seen some real benefits, in some cases for several years at this point. It might be slightly early for “best practices” to have emerged as definitive points which they hardly ever are anyhow.

Still, there have been some lessons learned over the several years now that some firms have been using it. At the very least are worth taking a look at to see if people can get a jump start on their own enterprise relationship management initiative.

From where we've been, what's your standpoint on where this is all going next and when, roughly?

Geoff: We've learned a lot over the last four years working with some of our largest customers. It's clear where it's going.

When you see how people are benefiting from having their firm-wide relationships available as a shared asset and you see how they use it every day, what you know is this enterprise relationship management technology will be in use at every medium or large professional services firm.

I won't predict when, but I know just like shared calendars or Blackberry's which in other collaboration environments the firms that use it already have a competitive advantage. Other ones will come in late but they will get it.

Dan: It sounds like it's only a matter of time until we hit a threshold of adoption where suddenly it becomes so commonplace that we have this ability to really understand and actually work our extended and enter 20 networks that we'll just wonder how we did without it.

That's what I said a couple of years ago when I did my initial deep dive. I still think it's true even though we had a slight pause while some other things bubbled up. This is all very similar to, as you said, shared calendars, email, the web, cell phones, Blackberry's.

This is all an opportunity to dramatically magnify our ability to get through to people not in sinister way, not a big brother sort of way but allow people with legitimate solutions and sales people who have solutions that they can deliver to people to actually get in touch with the people who might be able to benefit it and hopefully get some work done.

Typically, for those that know me, I am fairly cynical about technology although I am a fairly avid adopter of technology when it's appropriate. In this case, I think it's worth an optimistic view of what's here now and what's coming down the pike.

I'm not quite sure what the timeline is either. I think on the order of three to five years we'll see probably a pretty dramatic ramp up of this sort of capability. Then, as far as when the little masses of the small to medium enterprises come along, that might take a while.

Again, anyone that has a real sort of customer or relationship sort of focus is likely to get on this curve faster than others.

Well, thanks for your time today Geoff. It's been a pleasure. It was good talking to you. There is always tons we could talk about and I'm sure we will, but that will be for another time.

Geoff: Thanks to you Dan. I've enjoyed speaking with you. I hope that our listeners have walked away with a better idea of how they can gain a competitive advantage by leveraging relationships, one of their most unique enterprise assets.

And I look forward to your presentation at the Information Intelligence Summit next month.

Dan: As a recap, this is Dan Keldsen, Senior Analyst and Consultant with the Delphi Group in Boston Massachusetts. We can be found at www.DelphiGroup.com or give us a call at 617-247-1511 or 1-800-Delphi0 which is 1-800-335-7440.

This session was an interview with Geoff Hyatt, founder and CEO of Contact Networks in Boston Massachusetts where we discussed the background and evolution of social networking and enterprise relationship management or ERM. You can find out more about Contact Networks at www.ContactNetworks.com or call them at 617-305-7961.

Thanks again Geoff and thanks to everyone listening or reading. I would love to hear what you are experiencing, good or bad, in this area. Feel free to get in touch, comment publicly, contact me through LinkedIn or however you like.