Practices that correlate with maturing social business.
Social business has jumped in importance to virtually every industry polled in a recent MIT Sloan Management survey, proof that it's no longer a fad, and pointing to the myriad of ways organizations are defining and implementing it.
Tech + Media Driving Adoption
Not surprisingly, tech and media are the two industries placing the most value on social business, but the energy and utility industry saw a noteworthy increase in the perceived importance of social business. When asked in 2011 how to rank social business in their organization on a five point scale, with important being the highest ranking, just 7% of energy and utilities responded it was important.
In 2012, that number rocketed all the way up to 29%, an increase that could be directly related to how many people are tweeting and Facebooking their utility companies. A Pike Research study cited in the report found an estimated 57 million customers around the world used social media to communicate with utilities in 2011. The same study predicted that number to swell up to 624 million by the end of 2017.
That's quite a prediction, but really just one stat among many in the Social Business: Shifting Out of First Gear research report from the MIT Sloan Management Review in conjunction with Deloitte. In the report, social business encapsulates social media usage, internal collaboration tools and social marketing technologies, so it's a broad swath of vendors and capabilities.
We generally are a bit more specific when we talk about social business at CMSWire. We mostly define it as internal collaboration tools, the kinds of technology that allow business workflows to be more dynamic. Using those kinds of tools simply keeps much of the day to day information exchanges between workplace teams in one place, and perhaps just as importantly, out of email.
It is, however, understandable this report bundles them all together. With that understanding in mind, we can take a closer look at how it defines maturity, and the drivers and struggles of social business.
Market Drivers + Strugglers
One of the most often quoted studies in the last year was a McKinsey report on the social economy, and it appears once again in the MIT report. Social's value, according to McKinsey, could be worth upwards of US$ 1 trillion for the consumer packaged goods, consumer financial services, professional services and advanced manufacturing industries.
McKinsey, like MIT, took a broad look at social technology in its report, and it included social marketing and enterprise collaboration tools among them. MIT identifies these findings as one of the market drivers in its report, but also zoomed in on two other segments. Social marketing and enterprise collaboration are two segments that are driving social business growth, but not for the same reasons. Social marketing, for example, is a rapidly changing field, and the market leaders there could be completely different in just two years.
On the enterprise collaboration side, indeed there are billions of dollars to be made, and analysts at Gartner have predicted that market to hit US$ 2 billion by 2016. Perhaps one of the biggest reasons social is becoming increasingly accepted is its use across generations. It's no longer just young adults and millennials that are widely using the tools, with 70% of the baby boomer generation saying social is a powerful tool to interact with friends.
The bad news is many companies are still not at all sold on social's benefits. 28% of respondents cited lack of an overall social business strategy as the reason they weren't progressing on social. 26% cited lack of a proven business case, and 21% said the reason was lack of a strong value proposition. Those last two are similar, of course, but MIT clearly felt they was enough variance in there to break it out that way.
Although many organizations roll out social business initiatives that ultimately fail, it's important to see social tools not as just another app, the report found. It's really a fundamental reshaping of how business is done.
Dell Case Study
MIT took a close look at Dell in this report, and it turns out Dell has been working on many social business initiatives over the last half decade, many of them with the support of senior executives. It started with a corporate blog, and Dell's social tools have matured enough to the point it even offers consulting services to other companies who want to do the same.
Dell's social strategy includes marketing, but also tools for listening to customers on social media. Since 2012, the company has been using tools that help it analyze huge amounts of data on conversations about Dell, its competitors and specific technologies.
All of this has been done under the guise of CEO Michael Dell, a component that should not be overlooked. Organizations often need a social champion at the executive level, and in this case, it has allowed Dell to shift its social policies to more centralized place in the company.
MIT produced a detailed report here, so in part two of our coverage, we're going to focus on the next steps businesses need to take to get social into marketing, customer service, operations and recruitment.