Does It Pay Yet to be a ‘Social Business’?April 18, 2013 1 Comment
In recent times, there has been no end to the chatter about the emerging “social business.” Going social means all kinds of great things, they say – from achieving greater collaboration between employees internally to more interaction with customers externally.
That may all be true, and there are studies that back that up. But are organizations ready to become social businesses? Studies also consistently show there’s a long way to go and a lot of work still to be done. Simply having employees use Facebook or Twitter to interact with customers does not make an organization a social business.
A McKinsey study of 4,200 companies, for example, finds that while 72% of companies use social technologies in some way, very few are anywhere near to achieving the full potential benefit. In fact, only three percent report they are deriving “substantial benefit” from social technology across all parts of the enterprise.
Being a social business means running as an intelligent business – in other words, leveraging insights out of the data being generated. But there isn’t a lot of data collection taking place yet, another survey finds. Another study among 450 members of the SHARE large systems users group, conducted early last year, found only 30% of organizations are currently monitoring their own internal social networks, and about 50% are monitoring public social networks for information on customer sentiment or new market opportunities. Significantly, the study also found that 75% of the overall sample base are not collecting data from proprietary and/or open social media networks.
Again, becoming a social business means far more than tapping into Facebook. McKinsey’s study notes that the most powerful applications of social technologies are largely untapped. McKinsey finds that internally focused social media technologies may even be far more valuable to enterprises than external networks. “Two-thirds of the value creation opportunity afforded by social technologies lies in improving communications and collaboration within and across enterprises,” the consultancy’s report states.
By fully implementing social technologies, companies have an opportunity to raise the productivity of interaction workers—high-skill knowledge workers, including managers and professionals—by 20% to 25%. The study estimates that knowledge workers spend up to 28 hours a week either writing emails or searching for the information they need.
What, exactly, does McKinsey mean by “internal” social media? It actually isn’t confined to the enterprise walls at all, but, rather, is a method of engagement in many key facets of business. For the operations and production side, this may include working directly with customers to derive their insights to co-create products, or being able to leverage social data to forecast and monitor operations and distribution. For the marketing and sales end, the use of social may also encompass marketing communications and interactions, as well as generating and fostering sales leads.
How does an organization become a social business, then? IBM Vice President Sandy Carter recently outlined the key steps to becoming a social enterprise at a recent conference, as reported by Alan Hamilton in Social Enterprise Today:
1. Integrate social into your business processes. Social networking will not deliver as a “one-off” activity conducted by someone in the marketing department. Enterprise systems need to support feeds from social channels.
2. Customize the social experience to the organization. Like snowflakes, no two organizations are alike, and neither should their social approaches.
3. Set governance and social policy rules. This is important for engaging the business – and, importantly, putting the business in charge of the effort.
4. Hire community managers and social job roles to manage and respond to both internal and external social networks.
5. Get business leaders directly involved in social media. This may include “reverse-mentoring” senior staff with younger employees who are more familiar with social networking.
6. Identify the most enthusiastic and committed participants, and help them evangelize and enable social business across the enterprise.
7. Communicate the what, why and how of your social business plan. Prepare guidelines for business leaders and users to follow.
8. Establish and keep track of metrics to document value. Look at the specific areas to be improved through social media, such as employee productivity, mentioned above in the McKinsey report, or the cost of direct marketing.
Joe McKendrick is an author and independent researcher, covering innovation, information technology trends and markets. Much of his research work is in conjunction with Unisphere Research/ Information Today, Inc. for user groups including SHARE, Oracle Applications Users Group, Independent Oracle Users Group and International DB2 Users Group. He is also research analyst with GigaOM Pro Research.
He is a regular contributor to Forbes.com, and well as a contributor to CBS interactive, authoring the ZDNet “Service Oriented” site, and CBS interactive’s SmartPlanet site.
Joe is a co-author of the SOA Manifesto, which outlines the values and guiding principles of service orientation in business and IT.
In a previous life, he served as communications and research manager of the Administrative Management Society (AMS), an international professional association dedicated to advancing knowledge within the IT and business management fields. He is a graduate of Temple University.
Analyst Blog, SOCIAL BUSINESS