Although external initiatives generally get more attention than internal, companies can drive meaningful results by applying social business approaches to existing business operations - most notably, cost reductions. For Spanish telecom company Movistar, a customer support community delivers almost $6 million in annual call deflection savings. At reinsurer Swiss Re, an internal community paid for itself in less than 12 months by allowing legacy systems to be decommissioned. At TransUnion, $50,000 spent on a social networking platform resulted in $2.5 million in savings within five months.
[See this link for a list of 101 examples of social business ROI.]
The Challenges Ahead
We have started seeing meaningful social business results, but challenges still remain.
Companies Must Determine How to Organize
Early on, brands looked to a social media superstar model, where one highly visible evangelist led all things social. As large organizations got interested, the model was show to lack scalability; thus, different approaches to organizing came about such as "the dandelion" and the social business unit. The operating environment evolves constantly and organizations must take a flexible and agile approach to value capture from emerging opportunities.
Different industries have imposed varying levels of regulation on social media activity. For example, FINRA has released social media guidelines for financial services companies. Other industries may not be subject to the similarly strict rules, but brands must still comply with internal policies and procedures designed to protect brand equity.
There's a lot to keep track of in social business. Early on, evangelists eschewed attempts to track success or failure -- measurement was deemed unnecessary and illogical. However, as management got serious about budget allocation, funding for initiatives drove an increasing need for accountability. For some social media gurus, the party's over (or at least it should be) -- brands need to see results. Companies that have the right tools to make sense of big data being spun off by social business activities can not only measure performance -- they can learn and fine tune strategy to achieve competitive advantage.
The social business era has arrived and although early, it's clear where businesses must focus their efforts to build the foundation for future success. Eventually "social business" will just be plain "business" and the companies that win will be the ones who have addressed the fundamentals of what matters: acknowledging trends, uncovering opportunities with consumers and workforce and addressing fundamentals including organizational model, governance and measurement.
Editor's Note: You may also be interested in reading:
- Knowledge Management & Social Business: The New World of Work by @seattlerooster
- Using Social to Drive Business Value in 6 Easy Steps by @mediamutt
- Key Steps to Becoming a Social Business by @kimberlymccabe