As companies continue to level job cuts across the enterprise, alumni networks have sprung up in all directions as former employees work with each other to find new job opportunities. But in many cases, people connect in a decentralized way, forming groups within consumer social networks such as LinkedIn or Facebook.
The increase in alumni groups has caused many companies to seek out SelectMinds, a maker of enterprise social networking software. The company, which launched in 2000, has also begun selling its software to firms that need it for specialized groups internally.
CIO.com caught up with Anne Berkowitch, SelectMind's co-founder and CEO, to discuss why a company would want to drop money on an alumni social network in tough times. We also got her tips for driving enterprise social networking adoption.
CIO: Your company has been around for around nine years. Have you always made social networking software?
Berkowitch: We launched as a provider of corporate alumni solutions, which was an early form of a social network, but we didn't call it that back then. It was a hosted, Web-based application. It allowed customers to launch and manage online alumni networks as a way in staying in touch with people who used to work for them. They could then use that information to build a database for people they could selectively hire back. Sometimes, it could be a good revenue generating opportunity because some former employees would take jobs with customers of the company running the network. So that was the first 4-5 years of SelectMinds.
Then in 2005, we saw other talent management problems that companies were worried about. They were worried about Baby Boomers retiring. We took the success we had with alumni programs and applied it to those populations to help companies manage retiree networks and women's networks. So now, we help companies manage networks of both current and former employees.
CIO: How does your software work? Is it like social networks we use in the consumer space?
Berkowitch It's the same type of functionality as you'd see on a Facebook or a LinkedIn. Each person has a profile that they maintain, but it is also dynamically updated with their activity. So if they post a blog, or if they attend an event, for example, all that information gets captured and published back to the profile. It's a combination of expertise, interest, and activity. There is a standard content posting functionality that allows you to post this dynamic content, including blogs, discussion forums, and online RSVPs to events.
CIO: There is a lot of Web 2.0 vendors out there selling enterprise social networking platforms. And the heavyweights like Microsoft have also got involved with SharePoint. What makes your software stick out?
Berkowitch: The thing that differentiates our platform from a lot of social networking apps is that since we have worked in the enterprise from day one, and a lot of customers are Fortune 500 or Fortune 1000 companies, we have learned a lot around the controls and permissions enterprises require for these social networks. In addition to all the standard, front-end user functionality we discussed, it has a very robust back-end that allows companies to configure what information is captured around the profile, as well as setting permission for who can interact with who. They can set access with our platform for certain content and functionality. So companies can easily manage multiple networks and multiple users.
CIO: We've heard that even when companies buy social software, they have difficulty driving the adoption of it. Is this true? And if so, how do you cope with that problem?
Berkowitch: For adoption, we've always focused on affinity-based networks as a way to launch a social network. When we talk to prospects, and we hear them talk broadly about how they want to "connect these people" and "connect best practices," we say to them, "why will they need this tool?" So I would not describe us as a collaboration platform; we're a social networking platform, and we help companies launch networks where there is a natural affinity and a reason why they'd want to participate.
If you take an alumni network, for instance, especially for the larger brands that we work for, the network has immediate value for users. They get access to events, job opportunities and content that they can't access elsewhere. The engagement we get is high across all our sites. I'd have to double check, but I think we have an average participation of 38 percent, and it goes as high as 70 percent in really successful tools. That is way higher than adoption rates of typical Web 2.0 or Enterprise 2.0 tools.
CIO: That sounds great, but times are tough right now. Why would companies want to invest in an alumni social network when they could start a group for free on LinkedIn or Facebook?
Control. Security. What is hugely different between a Facebook and a LinkedIn and a closed, private secure corporate network is a company retains control around who participates. Companies still want open conversations and sharing to happen, but they want it to happen in a secure environment. They can determine what goes in and what goes out.
That said, just about all of our clients have a presence on Facebook and LinkedIn, and we encourage them to do so. They should be out there and find people who are relevant to them, and then funnel them back to the closed site, where they can interact in a deeper way. So Facebook and LinkedIn are much more complimentary than they are substitutes.
CIO: Especially now, how do you show the value of your products? As it concerns alumni, why would a company spend money on a product for people who don't even work there anymore?
The value comes in rehiring. When they rehire employees, they are more cost-effective hires because they tend to be ready twice as fast and they're twice as likely to be high performers. So you see huge out-of-pocket savings. For instance, Deloitte saved $1.6 million in a year from filling 36 positions with rehires compared with new hires. With that streamlined recruiting process, that's real, measurable dollar savings.
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