How Siemens (NYSE: SI) Is Monetizing Its Own Social Network
I must confess, I feel like I’m personally responsible for Facebook (Nasdaq: FB) not being worth more. I’m about to mark the eighth year when people will wish me a happy birthday on Mark Zuckerberg’s social network, but I’ve never clicked an ad (in fact, I rarely notice them) and I think the iPhone app is unreliable.
Don’t get me wrong, social networking sites are a part of my life. But they’re not something I’d invest in – at least not yet.
I’m much more excited about a trend I discovered in my MBA coursework this past year. It’s called expert networking, and it’s creating value at the roots of some of the world’s biggest firms.
For instance, let’s take a look at German conglomerate Siemens (NYSE: SI). The company is an innovation hotbed. It has around 30,000 R&D workers and holds around 60,000 patents. And that base is only getting bigger and stronger with a network they recently implemented.
Keeping Knowledge In-House
TechnoWeb is a network platform that lets Siemens workers share questions and answers.
Imagine you’re an engineer in the U.S. working for Siemens. You hear from a salesperson that a potential customer needs a device that could win a multi-million dollar contract. If you can come up with a solution, you’ll land a big fish for your division and maybe get a promotion.
But unfortunately you’ve got a hole in your research that no one near you can fill.
Now you, an American engineer, can run your questions by hundreds of thousands of Siemen’s employees worldwide using the TechnoWeb.
After a multi-billion dollar bribery scandal broke in 2006, Siemens steered its pool of global talent away from networking based on corruption. It was time to harness the innovative power of Siemens employees.
It turns out that around 20,000 employees had been chatting about Siemens work topics on other social networks (such as Facebook). Not only is that not secure, it also doesn’t let Siemens get a bird’s eye view of what’s going on in-house.
The motto for this new internet-based knowledge networking was, “If only Siemens knew what Siemens knows…” The idea being that the most valuable knowledge is within the vast global network of Siemens employees – totaling more than 400,000.
Unlike Facebook, which puts individuals and their info at the center, and Wikipedia, which revolves around research topics, TechnoWeb links knowledge to people. That means that with each answered question, a new expert is acknowledged or reinforced, and great ideas are rising to the top.
In its first year 10,515 people used TechnoWeb, beating a target of 8,000. Not many people attended “how-to” webinars, which was actually a good sign… they knew how to use it right off the bat.
The nice thing is that TechnoWeb is a hybrid – open innovation and knowledge-sharing give way to executive command and control when implementation and strategy are needed. This encourages everyone in the organization to get involved in innovation, and solutions come from the people with the best knowledge.
Through this expert networking, people are working efficiently by working together.
As few as 3 in 10 TechnoWeb users have to be active for the model to work. The other 7 still reap the benefits, just as investors do when new products come to life. You don’t even have to be logged in. It’s a sort of dynamic yellow pages that gets big problems solved, quickly.
This “Social Network” is Already Being Monetized
Here’s just one story that points to TechnoWeb’s success…
A Siemens information technology worker in Munich posted an urgent request in TechnoWeb for info that would help a customer… Within five days, he received 15 responses from eight different business units in eight countries.
One response hit it right on the nose. The employee said he saved multiple working days and improved quality – all because of Siemen’s TechnoWeb.
So while Facebook struggles to find the value in its vast network and information database, Siemens is already monetizing on its own version of a social network. Investors should keep their eyes not only on Siemens but on other companies that look to take advantage of this new revelation.
*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.