Social business advent of a new age

Social business advent of a new age

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  IBM Software Group Whitepaper Lotus The Social Business Advent of a new age
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  2 The Social Business purchased are fundamentally changing. Consumers now wield As the world becomes more instrumented, interconnected unprecedented power over how brands are perceived. and intelligent and the population continues to embrace Crowdsourcing is changing industry landscapes by leveling the social computing, today’s enterprises face the dawn of a new intelligence playing field at an extraordinary rate. In addition, era – the era of the Social Business. Just as the Internet employees are demanding social tools in the workplace – and changed the marketplace forever, the integration of social are actively sidestepping established hierarchies and IT computing into enterprise design represents another enor- processes to use them. As a result, the world finds itself at a mous shift in the landscape. Organizations that successfully transformative point with regard to how business is done. We transform into a Social Business can potentially reap great benefits – among them the ability to deepen customer rela- believe it is the dawn of a new era – the era of the Social tionships, drive operational efficiencies and optimize the Business. workforce. A similar tectonic shift in the marketplace occurred a little more than a decade ago when the Internet went through its first maturation phase. It changed from being a digital novelty Introduction for technologists to being a platform for doing business. From Two years ago, IBM shared a vision for a smarter planet – an e-commerce and peer-to-to peer file sharing to the emergence opportunity to infuse intelligence into every system through of IP-based solutions for financial, accounting and supply chain which the world works. Three broad trends made this systems, the Web became a serious business tool for opportunity possible: 1) everything is becoming instrumented organizations and industries of every kind. with sensors and computational power; 2) the world is becoming interconnected via vast, ubiquitous networks; and 3) Just as the dawn of e-business changed business forever, ten many things are becoming intelligent by applying analytics to years later organizations find themselves at another junction the mountains of data they can collect. point in the evolution of business: the coming of age for Social Business as social computing and social media are integrated Since then, remarkable progress has taken place to make the into enterprise design. complex systems that people rely on – cities, energy grids, food distribution chains, healthcare networks, banking systems, etc. – smarter. Perhaps most remarkable of all, What does it mean to be a Social however, has been the application of this vision to people Business? themselves. Instrumentation, in the form of smartphones, has A Social Business embraces networks of people to create business value. put unprecedented power literally in people’s hands, anywhere they go. The meteoric rise of social networking, which now Our definition of a Social Business (above) has three accounts for 22 percent of people’s time spent online, has underlying tenants: connected nearly every individual on earth.1 And the 1. Engaged - A Social Business connects people to expertise. emergence of social analytics means not only are individual It enable individuals – whether customers, partners or people intelligent, but networks of people have become employees – to form networks to generate new sources of intelligent as well and are able to learn from interactions and innovation, foster creativity, and establish greater reach and associations to deliver recommendations and take action. exposure to new business opportunities. It establishes a As the global network of people becomes instrumented, foundational level of trust across these business networks interconnected and intelligent, dramatic shifts are taking and, thus, a willingness to openly share information. It place. The ways individuals interact, relationships form, empowers these networks with the collaborative, gaming decisions are made, work is accomplished and goods are and analytical tools needed for members to engage each other and creatively solve business challenges.
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  Lotus 3 2. Transparent - A Social business strives to remove can reap great benefits. Among them: 1) the ability to leverage unnecessary boundaries between experts inside the company more expertise and a greater diversity of skills and experience, and experts in the marketplace. It embraces the tools and 2) better realtime use of current knowledge (contrasted with leadership models that support capturing knowledge and formalized, but less current knowledge) and 3) improved insight from many sources, allowing it to quickly sense situational awareness and use of social intelligence in decision changes in customer mood, employee sentiment or process making. efficiencies. It utilizes analytics and social connections inside and outside the company to solve business problems and A Social Business shifts the focus from documents, project capture new business opportunities. plans and other temporary artifacts to the source of the energy, creativity and decision making that moves the business 3. Nimble - A Social Business leverages these social networks forward: people. A people-centric approach relies on: to speed up business, gaining realtime insight to make quicker and better decisions. It gets information to • Networks – Globally integrated networks of employees, customers and partners in new ways -- faster. Supported by partners and customers are the backbone of a Social Business. ubiquitous access on mobile devices and new ways of Rich online profiles of trusted experts enable collaboration connecting and working together in the Cloud and on open and agility and allow for exploration of expertise, publications platforms, a Social Business turns time and location from and networks of colleagues to quickly initiate action or fulfill constraints into advantages. Business is free to occur when a business need. and where it delivers the greatest value, allowing the • Social and realtime collaboration – Connecting remote organization to adapt quickly to the changing marketplace. teams of people to improve and decision making and discover relevant expertise or related work empowers people and We believe the most effective approach to enabling a Social enables problem solving. Business centers around helping people discover expertise, • Mobility – A social business benefits from enabling develop social networks and capitalize on relationships. A individuals to use the device best suited to their needs and Social Business enables its employees – and customers – to keeping them connected whenever and where ever they are. more easily find the information and expertise they seek. It The speed and relevancy of information exchange are helps groups of people bind together into communities of increasingly essential. shared interest and coordinate their efforts to deliver better • Integration – Bringing social collaboration capabilities into business results faster. It encourages, supports and takes the applications people use to do their jobs, without advantage of innovation and idea creation and builds on the overwhelming them, allows for information sharing within the intelligence of the crowd. context of business processes. An effective Social Business embodies a culture characterized A key element to the success of a Social Business is trust. First, by sharing, transparency, innovation and improved decision an organization needs a certain level of trust to empower its making. Such a culture enables deeper relationships with employees to share their ideas and expertise – and it must customers and business partners. By allowing people (both demonstrate this trust by rewarding the behavior. By the same inside and outside an organization) to document and share token, it must trust its customers to maintain an open dialogue their knowledge and ideas and others to recognize, refine and with them. promote the value of those ideas and content, a Social Business
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  4 The Social Business strategic approach to shaping a business culture and is highly Did you know? dependent on executive leadership and effective corporate strategy, including business processes, risk management, • Smartphone shipments will outpace PCs by 2012.2. leadership development, financial controls and business • Online users in rapid-growth regions like Latin America, analytics. Realizing the potential value of Social Business is the Middle East and China are now spending more time predicated on an organization’s ability to recognize and design on social-networking sites than on e-mail.3 for this transformation. • Gartner Research predicts that social networking services will replace e-mail as the primary communications vehicle Social Businesses can orchestrate and optimize new ways of for 20 percent of business users by 2014.4 generating value through innovation, creativity and utilizing • Globally, the total minutes spent on social networks the right skills and information at the right time. They become monthly saw a more than 100 percent gain over the same more flexible and agile in the face of the global market’s time last year.5 competitive pressures and rapid rate of change. At the same time, this trust must be balanced with an appropriate level of governance or discipline that sets the Common industry terms parameters of appropriate actions. This is a very delicate • Enterprise 2.0: Mostly focused on collaboration behind the balance and one with which some companies struggle. firewall between employees and partners. When applied effectively, it can enable large organizations to become more What is the value of Social Business? nimble and agile and, in many ways, act more like a “small” As the rapid growth of social networking and mobility has business in the best sense of the word. erased some of the boundaries that separated individuals in the • Social CRM: A strategy that allows an organization to make past, people increasingly use their relationships with other customers a focal point of how it does business, where the people to discover and use information to accomplish customers are actually a key force behind the development innumerable tasks. New opportunities for growth, innovation of the ideas, services and products that the organization and productivity exist for organizations that encourage people produces. – employees, customers and partners – to engage and build • Social media: Social media is another channel composed of trusted relationships. Individuals are using social networking various social sites such as Twitter and Facebook. These channels have their own processes, guidelines, governance tools in their personal lives, and many are also incorporating it and forms of accountability. As an organization develops a into their work lives – regardless of whether it’s sanctioned by social business strategy, social media might be one of the their employers. Astute organizations will embrace social channels to pursue. software and find the most effective ways to utilize it to drive • Social software: The broader set of social tools (messaging, growth, improve client satisfaction and empower employees. chats, blogs, wikis, activities, file sharing, profiles, forums, analytics, tagging, etc.) that enable all of the concepts above In fact, Social Business software has gained significant and include applications used within an enterprise behind a momentum in the enterprise, and this trend is expected to firewall as well as third-party services that extend beyond the continue, with IDC forecasting a compound annual growth firewall. rate of 38 percent through 2014.5 However, becoming a Social Business is not simply a matter of deploying some collaboration tools and hoping for the best. It is a long-term
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  Lotus 5 We see three key business value opportunities arising from the To truly become customer centric, an organization needs to Social Business transformation. Becoming a Social Business have the social media tools ingrained in its end-to-end can help an organization: business. And it needs to listen to its customers when they volunteer information – because customer feedback obtained 1) Deepen customer relationships via social media is many times quite different from information 2) Drive operational efficiencies gained through surveys and other market intelligence tools. 3) Optimize the workforce Social Businesses are finding ways to mine this information while also creating a consistent, truly interactive and context- Deepen customer relationships aware experience. In today’s fast-paced “always on” world, brands are getting strengthened and destroyed in a fraction of the time it once Instead of simply pushing messages and offers out to the took due to the proliferation of instant, viral feedback via social market, marketing is engaging customers through open media and social networking tools. The combination of social dialogue integrated with rich media capabilities that cater to media and the growth of Internet use has essentially changed customers’ preferences, buying patterns and personal networks the way consumers interact with brands. Now, more than ever, (see sidebar: Extending relationships with and among clients). organizations must understand and communicate with their From a marketing and sales perspective, a Social Business can customers. create, manage and publish personalized content (text, pictures, audio, video, documents, etc.) based on profile data Most business leaders understand this. In fact, 88 percent of all from the Web, optimized for customers’ behavior patterns. CEOs who participated in the 2010 IBM CEO study picked “getting closer to the customer” as the most important In addition, it can provide consistent branding and user dimension to realize their strategy in the next five years.i experiences across multiple sites and channels seamlessly However, understanding the importance and knowing how to through Web content management. Finally, a Social Business act on it are two different things. is better able to target the right content to the right customers based on personal attributes, patterns of behavior, Consumers are connecting with brands in fundamentally new segmentation and loyalty programs through personalization ways. The ways individuals become aware of, research, engines, Web analytics, and instant messaging and online purchase and obtain support for products have changed. meetings. Increasingly, customers rely on digital interactions, peer evaluations, social media and online after-purchase support to In terms of customer service, a Social Business can provide an make their decisions about which brands to engage. While online experience through “real people” showing personalized customers have historically interacted with trusted sources to profile information via instant messaging, community blogging help make purchasing decisions, technology is enabling them or Web conferences – turning customers into advocates. In to do so on a much larger and more organized scale using addition, it can strive to deliver realtime information to online more resources. customers through multiple devices (mobile, smart-phone, tablet PCs, etc.) to help ensure effective communication Social marketing is becoming an increasingly effective and anytime and anywhere. As part of all this, an effective Social essential mechanism to engage customers. The benefits to Business can also implement a flexible model of customer self brand building and engagement are obvious, but organizations service capabilities, such as chat forums and communities, to are challenged with delivering a consistent, compelling brand increase responsiveness and decrease costs. experience across their channels and breaking through the “social clutter.”
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  6 The Social Business Essentially, Social Businesses are successfully building deeper • Utilize technology to build competitive advantage. customer relationships and impacting the traditional role of Analytically derived customer insights that leverage customer the Chief Marketing Officer by concentrating on some key information from across internal and external data sources actions: (Facebook, Twitter, etc.) feed marketing programs which, in turn, deliver the ultimate engaging customer experience. • Put customers at the center. Embrace an open dialogue with customers through social tools to involve them in both Drive operational efficiencies internal processes, like product development, and external Social Businesses can improve communication, as well as drive processes, such as promotion and customer service. innovation, much faster than traditional organizations. Good • Address customer experiences comprehensively.The best ideas can be brought together. Complimentary expertise can be experiences are consistent and custom fitted to users’ combined. Serendipitous connections can be made. Ideas can preferences, devices, locations, social networks and behavior be discovered, stand on each others’ shoulders and be refined, patterns. expanded on and turned into valuable goods and services much more quickly. This sharing of ideas and increased communication can lead to increased operational efficiency. Deepening customer relationships to speed development China Telecommunications Corp. (China Telecom) is the larg- Some leading services development organizations have begun est fixed-line service and third-largest mobile telecommuni- to utilize social tools to drive product innovation and service cation provider in China. It offers a full range of integrated improvement. Progressive development teams are using social information, Internet connection and application services. capabilities to connect with new, broader perspectives, which With over 200,000 employees, it operates subsidiaries in 31 provinces and branches in the Americas, Europe, Hong Kong are enriching the quality of their development efforts. As they and Macao. To stay competitive, the Shanghai branch of extend their reach beyond conventional networks within an China Telecom wanted a way to accelerate creation of new organization, their knowledge base and problem-solving telecom services by optimizing use of its employee base in a capacities can grow exponentially (see Sidebar: Fostering unified innovation process. China Telecom developed an communication, improving efficiency). The Social Business innovation platform with a Web portal interface that enables model is changing the traditional roles of development collaboration among employees, partners and customers. managers by emphasizing the importance of their ability to: The portal accepts ideas from this enlarged community, expanding the sources of innovation and helping to filter the • Bring more diverse opinions together to form novel best quality ideas. More than 550 new “voices” joined the ideas. Build focused communities that help improve the development process in the first six months of the portal quality and speed of gathering business insights and launch, with publication of the first idea a mere ten minutes generating improvement ideas. after launch. Marketing teams can analyze new intelligence • Gather better requirements straight from the customer’s gathered directly from consumers’ Web 2.0 entries and intro- duce new services with the knowledge that subscriber voice. Gather high-quality input and ideas, as well as frequent demand exists. More product ideas of higher quality reduce feedback, from motivated customers and partners who opportunity costs and risks, and increase the chances of broadcast their product needs through daily commentary via marketing success. And as Niu Gang, Associate Director of external communities and blogs. the Shanghai Research Institute for China Telecom observes, • Bring break-through products to market faster while this solution enables the company to deliver exciting prod- preserving quality and traceability by sharing product ucts to the marketplace at a faster pace than ever before. ideas and production processes across organizational boundaries. Product developers can obtain early feedback on
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  Lotus 7 development prototypes and incorporate feedback on in-flight as completing projects or tasks, reporting status, keeping projects or prototypes via file sharing, forums, blogs, tweets managers up to date, getting help and helping others (see and other social media to refine and perfect designs before sidebar: Collaborating to improve productivity, decrease costs). committing to fixed production volumes and costly reworks. • Continue to connect developers with feedback from the There are two major trends driving the need for organizations field. Improve quality and service by actively communicating to adopt these capabilities: externally to solicit quality concerns, offering appropriate expertise to solve problems and getting answers into the hands 1. Millennials are entering the workforce. They are well versed of those who may need it most at any given time. in a social culture of sharing and transparency. It is second • Rapidly form small, focused teams to innovate. The best nature to them to communicate their status, update their innovations often come from small teams. A Social Business is superiors and get feedback on their activities – and not just about bringing together more opinions, it is about technology is core to how they do it. Organizations that enabling the right people to come together to solve problems, want to get the most out of these new people resources will unimpeded by organizational boundaries. need to give them the tools to best leverage their work habits and potential for idea generation. Speeding innovation and time to market 2. More and more teams are geographically distributed. As CEMEX is the third largest building materials company in firms continue their geographic expansion, find talent in far the world, with employees in 50 countries. To meet business flung places, look to moderate their real estate costs or give challenges, it had to bring its global community closer their employees more work/life flexibility, they are together, so it created a social network initiative, called considering options such as “hoteling” or telecommuting. Shift, for open collaboration across its entire workforce. These strategies make improved collaboration even more Within a year, over 20,000 employees were engaged, over critical. Social, collaborative and rich communication 500 communities had formed, nine global innovation initia- technologies that are seamlessly deployed across all mobile tives were underway -- and ideas started flowing around the devices, as well as integrated into existing applications and world among specialists in all areas and levels of the com- into the fabric of business culture, offer the potential to pany. Wikis, blogs and communities became links between make a distributed workforce more productive. operating units around the world, and the collaboration among employees led to impressive results -- for instance, Social Businesses are optimizing their workforces by enabling the launch in under four months of the first global brand of their employees to become more effective and by recognizing CEMEX’s Ready Mix special product. If the same level of collaboration now enabled by Shift were conducted today where which talents can be best utilized. Human resources through traditional meetings by phone and travel, CEMEX professionals in a Social Business can expand their roles and would be spending an additional US$0.5 to US$1 million per help: year. • Encourage a culture of information sharing. Social tools provide a gateway for current and relevant information exchanges across geographies and organizational silos. Building trust and encouraging social interactions are essential Optimize the workforce to driving a social change in the workforce. Social Businesses are utilizing social technologies to connect • Empower workers to foster innovation and growth. Quick workers with each other, with experts both internal and access to information and collaboration with an expanded external to the organization and with context-relevant content. professional network stimulates creativity, idea generation and Workers can leverage these tools to coordinate activities such problem solving.
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  8 The Social Business • Help employees find people and build relationships. Social tools can support people’s intrinsic sense of Collaborating to improve productivity, decrease costs “belonging” by recognizing contributions and building stronger communities and relationships across the Sogeti is one of the world’s leading providers of IT consult- ing services and solution integration. As it expanded across organization. 15 countries, information silos made locating and collabo- • Improve leadership development. Strive to retain top rating with the vast expertise in the company difficult. talent and develop the next generation of successful leaders Sogeti needed new ways to foster teamwork and peer com- through leadership development communities, expertise munication among its many business groups and locations. tracking and personal brand management. • Mobilize for speed and flexibility. It’s important to be able to rapidly respond to customer demands and changing To tie together over 20,000 people across 200 locations, market conditions through rich profiles, expertise tagging, Sogeti deployed an enterprise-wide social networking and file and bookmark sharing, team libraries and group collaboration platform for finding and leveraging expertise, broadcast tools. knowledge transfer, close teaming across distances and • Rapidly develop and deploy skills and capabilities. sharing of best practices. Now, integrated multiple active Human resources professionals should serve as a repository directories provide a unified approach to identifying exper- to catalogue – and continue to develop – the vast talents and tise wherever it may be. Easier access to the tacit knowl- expertise that exist. They can utilize a number of methods to edge of others helps co-workers develop their skills, and improve this process, including social learning, expertise fast identification of people’s skills supports efficient staff- ing with the right people for any project or mission. Together, tagging and folksonomies, social rewards and technical accelerated knowledge transfer, better use of expertise and communities of interest. Such tools can enable HR to identify the ability to staff the right people quickly is preparing the right individuals for the right opportunities, benefitting Sogeti to enter new markets. And being able to share rather employees, the company and, ultimately, the client. than having to reinvent key processes is yielding significant • Enhance skills transfer and new employee onboarding savings in project startup costs. processes. By creating shared repositories of social and business information, human resources professionals can enable new employees to more rapidly acclimate. Group chat rooms, social bookmarks and shared team repositories can also help shift teams rapidly transfer realtime information from one shift to the next, such as recent customer requests, special outcomes of note, etc. Social Businesses recognize that employees need to be agile, informed and able to work beyond their specific job descriptions. As such, they provide tools and the cultural incentives that allow employees more access to the right information and the right people. Social Businesses reduce both the cultural boundaries as well as the technical obstacles for people to connect with people and information, allowing unprecedented access. All this equates to an optimized workforce – one that is able to feel closer to its customers while driving operational efficiencies.
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  Preparing for thefuture The right partner for a changing world A challenge faced by virtually all enterprises in these turbulent At IBM, we collaborate with our clients, bringing together times is how to build organizations that are more adaptive and business insight, advanced research and technology to give agile, more creative and innovative, and more efficient and them a distinct advantage in today’s rapidly changing resilient. Increasingly, it is becoming clear that the traditional environment. Through our integrated approach to business hierarchical enterprise, built on a structure of departments design and execution, we help turn strategies into action. And and a culture of compartmentalization, will give way to a with expertise in 17 industries and global capabilities that span socially synergistic enterprise built on continually evolving 170 countries, we can help clients anticipate change and profit communities and a culture of sharing and innovation. from new opportunities. As such, we predict the path to becoming a Social Business is For more information inevitable. However, the differentiating factors – those which To learn more about this IBM Institute for Business Value will separate the leaders from the masses – will stem from how study, please contact us at iibv@us.ibm.com. For a full catalog effectively an organization embraces both a Social Business of our research, visit: culture as well as the technology to deepen customer ibm.com/iibv relationships, drive operational efficiencies and optimize the workforce. Be among the first to receive the latest insights from the IBM Institute for Business Value. Subscribe to Ide Watch, our And even the most successful organizations will encounter monthly e-newsletter featuring executive reports that offer potholes along their paths. For example, in today’s open world, strategic insights and recommendations based on IBV disgruntled employees, partners and customers have a research: tremendous voice – something that must be considered as a ibm.com/gbs/ideawatch/subscribe business plots its Social Business strategy. In addition, issues relating to protection of intellectual property in the socially networked world, as well as an enterprise’s potential legal risks associated with social media, must be considered. Finally, HR policies likely need to evolve to take into account the massive increase in public information about employees, candidates and alumni. Despite the many issues to consider and the changes in organizational culture that must occur, enterprises must adapt and embrace the opportunities associated with being a Social Business. By harnessing the creative and productive potential of employees, customers and partners across the enterprise and expertise across a value network, companies can position themselves to enjoy deeper customer relationships, increased operational efficiency and an optimized workforce. Organizations that leverage a Social Business culture and technology framework have the potential to transform themselves and take leadership roles in their industries.
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  © Copyright IBMCorporation 2011 IBM Corporation Software Group Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America Febuary 2011 All Rights Reserved IBM, the IBM logo and ibm.com are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Other company, product and service names may be trademarks or service marks of others. 1 “ Social Networks/Blogs Now Account for One in Every Four and a Half Minutes Online.” Nielsen News. Nielsenwire.com. June 15, 2010: http://blog.nielsen.com/ nielsenwire/online_mobile/social-media-accounts-for-22-percent-of-time-online/ 2 K harif, Olga. “Morgan Stanley’s Meeker Sees Online Ad Boom.” Bloomberg Businessweek. November 16, 2010. http://www.businessweek.com/technology/ content/nov2010/tc20101116_062591.htm 3 “ Global ‘Digital Life’ research project reveals major changes in online behaviour.” Digital Life. November 10, 2010. http://discoverdigitallife.com/global-digital-life- research-project-reveals-major-changes-in-online-behaviour/ 4 “ Gartner Reveals Five Social Software Predictions for 2010 and Beyond.” Gartner Newsroom press releases. Gartner. February 2, 2010: http://www.gartner.com/it/ page.jsp?id=1293114 5 “ Facebook and Twitter Post Large Year over Year Gains in Unique Users.” News. Nielsenwire.com. May 4, 2010: http://blog.nielsen.com/nielsenwire/global/ facebook-and-twitter-post-large-year-over-year-gains-in-unique-users/ 6 “ IDC Predicts Cloud Services, Mobile Computing, and Social Networking to Mature and Coalesce in 2011, Creating a New Mainstream for the IT Industry.” BusinessWire. December 2, 2010: http://www.businesswire.com/news/ home/20101202005415/en/IDC-Predicts-Cloud-Services-Mobile-Computing-Social 7 “ Capitalizing on Complexity: Insights from the Global Chief Executive Officers Study.” IBM Institute for Business Value. May 2010: http://www-935.ibm.com/services/us/ceo/ceostudy2010/index.html Please Recycle EPW14008-USEN-00