Exception Handling – What is the ROI of an Employee Social Network?

There are two common questions that potential clients often ask us about Socialcast:
“What are some practical applications to my business?” and, “what’s the ROI of an employee social network?”

The best answer to these questions has come from doing a significant amount of research in exception handling and management in the enterprise. I’ve had the pleasure of participating in the Deloitte Center for the Edge workshops, lead by John Hagel (who writes a phenomenal blog for the Harvard Business Review alongside John Seeley Brown, whom I’ve taught with at UC Irvine’s MBA program). These workshops have taken the idea of exceptions out of the realm of software programming and brought them into the daily workflow of everyday employees. Now, when clients ask about ROI and practical applications of social networks, we respond with our findings from our own clients as well as what we’ve discussed at the Center for the Edge.

What does exception handling mean for companies and employees? A practical definition is the time that employees – both management and front line workers – spend managing the non-routine tasks that must be addressed even though they occur outside the realm of standard daily business operations. It’s the things that just come up and disrupt someone’s workflow, requiring special time and attention.

Examples from our client base include:

• Unexpectedly low inventory of specific book titles at online retailers
• A company’s email domain is blacklisted suddenly

Other examples in the enterprise include:

• Order placed for discontinued product with no direct replacement found
• Quality Assurance finds a product defect, resulting in a manufacturing hold
• Sales Team processes an order for a new client with special requirements
• Customer support requested for a discontinued product

All of these everyday issues are common, and yet we haven’t found a way to easily mitigate both the issue and the time it takes away from our other work. You see, when an exception happens, we have to step away from our PowerPoint, stop typing an email, or exit a meeting in order to take care of it. Routine work stops. And, our modern reliance on technology to find, aggregate, and alert us to these exceptions has made the task of managing them more burdensome than ever before. Systems that manage exceptions provide the enterprise with vast amounts of data points that have become overwhelming for employees to handle. The applications that we rely on for managing exceptions still rely on process owners to make decisions and respond to the issues. The result is a workforce that isn’t dealing with exceptions well at all. According to Protivitti, decision-making and related actions around exceptions occur slowly and ineffectively for a variety of reasons, such as:

• Deaf Ears – Messages requesting action on an internal control issue languish in e-mail boxes and on voice mail systems
• Burnout – Process owners grow weary of repeated requests to address exceptions, even as they are in the process resolving them
• Erroneous Exceptions – Communication breakdowns between internal audit teams and their operational partners result in identification of too many “false positives” – exceptions that should not be classified as exceptions at all.

The communication breakdown around the alerts can dramatically affect how these exceptions are managed. What if the email alert for an exception goes to the inbox of an employee on vacation, or is sent to a terminated employee because the system was never updated? This could lead to months of time before any follow-up to the alert is even initiated. Even if the email is sent to the correct person, this could involve significant back-and-forth that creates an information silo.

Unfortunately, we can’t just sweep exceptions under the rug. Many exceptions often require swift response, as they are customer-centric or affect the bottom line. In fact, it’s easy to tie certain exceptions to company KPIs such as profit, customer satisfaction, customer retention, and employee productivity. The low inventory at our client’s online retailer? This directly affects the client’s profit, as not enough inventory means not enough product sold. A severe customer support issue is equally important, affecting both satisfaction and retention of a company’s most important asset – its customers. It’s clear why companies must focus on exception management, then. But until now, there hasn’t been a clear, efficient way of tackling this challenge.

The answer is an enterprise activity stream – a social network that talks directly with exception handling systems while simultaneously allowing employees to collaborate on the solution. Enterprise social networks already eliminate knowledge silos and enable open communication across all levels of the enterprise. Adapting exception management applications to utilize this collaborative arena can eliminate many of the decision and communication issues related to limited communication methods currently used, like email. Alerts can now be seen in a community of operators who handle these exceptions, allowing for a collaborative effort, in real-time, providing faster resolutions. They can be accessed via mobile phone, or at home via the web. Visibility into exceptions is now more widespread, making finding the answer easier than before.

Social networks in the enterprise create a permanent “home” for these exceptions to live where users can communicate and collaborate around the answers. Exception management through social networks gives management clear insight into the resources needed for handling these exceptions. Viewing or monitoring the interactions and necessary actions taken to resolve these exceptions can lead to better implementation, revisions or training on these systems, and increase productivity throughout the enterprise.

Faster resolution management of these exceptions will also help keep key performance indicators reporting positive results for the enterprise. This adaptation of social networks and the activity stream produces measurable ROI on social network’s role in the enterprise. Where better collaboration amongst employees isn’t currently seen as measurable ROI, integrating social networks into exception management can yield measurable results. Better, faster and more responsive management of these exceptions will measurably show against key performance indicators, demonstrating the ROI of implementing social networks in the enterprise.