Facebooking at work may be a no-no, but more and more companies are encouraging their employees to chat, post and comment via enterprise social software, or ESS. These collaboration platforms – including Cisco Quad, Yammer, Jive, Traction Software, Socialtext, SocialCast, Salesforce.com Chatter, WizeHive and dozens of others – allow employees to discuss ideas, share documents, post news and ask questions with one another via posts, chats, microblogs and forums. Some of these applications, such as Cisco Quad, also include VoIP capabilities to enable real-time voice and video conferencing, as well as mobile apps to allow employees to collaborate while on the move.

But beyond the buzz, does ESS really help companies improve employee productivity and improve the bottom line?

Global spending on enterprise social apps could reach $770 million in 2011, up 16% from last year (this figure doesn’t include ESS tools used to interact with customers and external partners), according to Gartner. That’s a drop in the bucket compared to spending on traditional collaboration software, which includes email, document sharing, calendaring and web-conferencing via solutions such as Microsoft Outlook and Sharepoint and IBM’s LotusNotes. That somewhat amorphous market is worth upwards of $5 billion a year in the U.S. alone, according to different industry reports.

“We see rapid growing interest in, and adoption of, solutions that incorporate voice, video and content sharing to enable globally dispersed organizations to securely collaborate within and across firewalls from both desktops and mobile devices,” said Zeus Kerravala, distinguished research fellow at Yankee Group.

If, as expected, enterprises adopt the more immediate communication style that consumers already have – moving away from email to favor real-time posts – the long-term prospects for ESS are promising. Gartner predicts enterprise social apps will become the primary collaboration tools – displacing email – for 20% of companies worldwide within the next three years. Many organizations are already realizing the benefits of ESS.

MBA students and faculty at Duke University are using Cisco Quad to collaborate with one another on projects across time zones. Students in the U.S., U.K., Dubai, India, Russia and China have used Quad to create virtual working groups, find people with common interests, share files or videos with other students working on similar projects, and instantly start video conferences or chat sessions. Faculty are using the platform to webcast live lectures and make video and other rich media course content available to students.

While many of the benefits of ESS are fairly intangible – happier employees, better working relationships, more collaboration – these technologies do deliver measurable results. One development team sent 38% fewer emails after implementing an ESS, and those emails they did send were 43% smaller in size. What’s more, product managers saved an average of 7.8 hours per week and engineers saved 5.4 hours a week using the platform – time they could invest in other strategic projects.

However, challenges remain to ubiquitous ESS adoption. One problem plaguing ESS is employee resistance; employees on average use six or more productivity applications in their jobs per week, and another new tool may be “one too many.”

For IT teams, integration is also a critical issue. More than half of enterprises in the U.S. and Europe will deploy enterprise social technologies by the end of 2011, but very few of these tools will be “even remotely linked to business systems, applications and processes,” according to an April 2011 independent report from Forrester Research, Integration: The Next Frontier For Enterprise Social. The report continued, “With the exception of a few pioneers, standalone social technologies are the norm today.”

“It’s phenomenal how quickly people have changed their behavior to adopt social networking in their personal lives, and this is naturally flowing over into the workplace,” said Haydn Shaughnessy, an analyst at GigaOM Pro who authored The Future of Work Platforms report.

But Shaughnessy cautions the first wave of ESS platforms still require too much installation and cost overhead – modelled on the large-footprint collaboration software launched a decade ago. “The future of enterprise social software is apps-based, with companies going to app stores to pick and choose light, inexpensive collaboration tools that instantly work with their installed systems,” he said.

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