Social Business Growing in Importance to Organizations

June 4, 2012

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | Data-driven | Mobile Phone | PR | Regulatory | Social Media

mitdeloitte-importance-social-software-to-orgs-june2012.jpgSocial collaboration tools are already an important consideration for organizations worldwide, and will rise in importance over the next 1-3 years, according to a joint survey of nearly 3,500 business executives, managers, and analysts conducted by the MIT Sloan Management Review and Deloitte. The study, released in May 2012, reveals that the majority of respondents already consider social software to be either important (18%) or somewhat important (34%) to their organization. In 1 year, though, three-quarters perceive social business will be at least somewhat important, and in 3 years, 86% envision some importance for the software.

The primary external activities respondents see social software as being at least somewhat important to are marketing/branding/reputation management (79%) and customer service/audience engagement (67%). Internally, social business is seen as most important for discovering emerging opportunities and increasing employee engagement (each with 58% saying at least somewhat important).

Soft Metrics Most Used

When looking at how organizations measure the success of their externally facing social business initiatives, the survey shows that most respondents measure hits and click-throughs on blogs and social networks, followed by web traffic, with composite scores of 2,515 and 2,246 respectively. However, the most common answer was that organizations simply do not measure their success (with a composite score of 3,271). The focus on soft metrics seems to be a running theme: an April 2012 report from Social Media Examiner also found digital marketers most often citing social media benefits in terms of presence and traffic.

The MIT/Deloitte study’s composite score was calculated by determining respondents’ top 3 selections and assigning a higher weight to a higher rank and a lower weight to a lower rank.

Senior Leadership Sponsorship Said Important

Data from “Social Business: What Are Companies Really Doing?” suggests that senior executive sponsorship is the critical driver of new social-related initiatives, with 62% of the respondents indicating that leadership support is at least somewhat important. When it comes to adopting social software, though, a clear vision of how social media supports business strategy is seen as far more important than senior management support (composite scores of 5,146 and 3,979, respectively), presumably because respondents cannot attain the latter without the former. Given that a large amount of organizations are not measuring the success of their activities, this business case might be a difficult proposition.

Even so, lack of management understanding (score of 3,050) is seen as more of a hindrance than the lack of a strong business case or proven value proposition (2,314) when it comes to internal barriers to adoption.

Social Can Help Manage Customer Relationships

Lately, some research has emerged highlighting the importance of social media to customer engagement. For example, an IBM survey of more than 1,700 CEOs found them pointing to social media as one of the dominant customer engagement tools in the next 3-5 years, while an American Express survey found social media to heighten customer service opportunities.

Respondents to the MIT survey support these findings. In fact, customer relationship management is the top area they see social software contributing to in the next 2 years, with 80% citing social to be important (42%) or somewhat important (38%) to their success in meeting their challenges in this area. And the majority of respondents seem to be following this trend: 56% said they have some social business initiatives in place to engage customers.

Mobile Said a Key Component

For organizations looking to increase their use of social software, mobile technologies might be a good place to turn. About half of the respondents said that their mobile access had increased overall social media participation, both personally and for business. This compares to 28% who did not see any increase as a result of mobile access.

Interestingly, for almost a quarter of respondents, mobile is now the main way they access social software. Relying on mobile does not appear to have much of a negative effect on participation: more than three-quarters of those who only access socials software through mobile say their social media participation has remained the same or increased.

Other Findings:

  • The top challenges listed by respondents for their organization in the next 2 years are: growing revenue; innovating for competitive differentiation; and reducing costs and increasing efficiencies.
  • Frequent use of social software for business purposes is still relatively scarce. Just 11% of respondents said they monitor social software consistently and contribute daily.
  • The top external barriers to adoption of social software are risk or security concerns and insufficient customer demand or need. Legal issues also play a significant part.

About the Data: The MIT/Deloitte study data is based on a survey of nearly 3,500 business executives, managers and analysts from organizations located around the world. The survey captured insights from individuals in 115 countries and 24 industries and involved organizations of various sizes. The sample was drawn from a number of different sources, including MIT alumni and MIT Sloan Management Review subscribers, Deloitte Dbriefs subscribers and other interested parties.

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