Social Business Important And Becoming More Important

by , Jun 13, 2012, 11:32 AM
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According to a new study from MIT/Sloan and Deloitte, the 2012 Social Business Global Executive Study and Research Project, social business matters. 52% of the survey believe that social business is important or somewhat important to their business today. Fully 86% of managers believe social business will be important or somewhat important in three years.

Importance of Social Software (% of Respondents)

Time Period

Important

Somewhat Important

Neutral

Today

18%

34%

22%

In one year

40

35

13

In three years

63

23

8

Source: SloanReview/MIT, June 2012

Almost all of the business leaders interviewed describe their social business efforts in terms of “infancy” or “just beginning” or “early days,” says the report in its introduction. Those with sophisticated social networks, including IBM and SAP, stressed that these have taken years to develop.

The importance of social business to organizations is expected to grow over the next few years. While just 18% of all survey respondents believe social business is important to their organization today, 63% say it will be important in three years. That’s a jump of 250%.

Although most managers continue to view social software as an externally facing activity, its relevance to innovation is also being recognized:

  • Survey respondents say marketing, sales and customer service are most responsible for driving social software use in their organizations
  • On average, respondents say the most important use of social software is for managing customer relationships
  • The second most important use of social software is to innovate for competitive differentiation

Most respondents to the survey believe that successful social business activities require leadership but acknowledge that their organizations are not measuring social software use. But as social software use becomes more important to an organization, having metrics in place can help managers assess, encourage and reward related behaviors.

  • In the survey, leadership and a clear vision are cited most frequently as critical to adoption of social software. Lack of management support is cited most frequently as the biggest barrier to adoption
  • The most common answer to the question, “How do you measure social software use?” is: Do Not Measure
  • Leaders most responsible for the strategic direction of an organization, CEOs, presidents and managing directors, are almost twice as likely as CIOs and CFOs to say that social business is important to their organization.

Small companies are demonstrating that they can appear larger than their actual size with social tools. Large companies can appear less like corporate behemoths. Midsize companies see the advantages of social tools but, in general, do not see themselves exploiting these advantages for another few years. Respondents from small and large companies say social business is important to their organization at twice the rate of managers from midsize companies.

  • Small companies (fewer than 1,000 employees) and large companies (more than 100,000 employees) tend to have stronger management support for social business initiatives than do midsize companies
  • When managers were asked about the importance of social business to their organization three years from today, there was little difference between how small, midsize and large companies view the future importance of social business

Some industries are seeing more value from social tools than other industries. Energy and utilities, manufacturing and the financial services sectors expect that social business will become five to six times more important to their organizations in three years. Social business is thriving in at least two industry sectors, according to the study: entertainment, media and publishing (Media) and IT and technology (Tech):

  • In the Media industries, 74.9% of managers say that social software is important or somewhat important to their companies today.
  • In the Tech industries, 65.9% of managers say that social software is important or somewhat important to their companies today

The Importance of Social Software by Industry (% of Respondents)

Industry

Currently Considered Most Important

Entertainment, Media & Publishing

37%

IT and technology

29

Telecommunications/communications

23

Education

23

Professional services

19

Consumer goods

17

Government/public sector

14

Other

14

Healthcare services

14

Financial services

10

Manufacturing

9

Energy & utilities

7

Source: SloanReview/MIT, June 2012

Managers who are least likely to say social software is important say that social software will become much more important in three years:

  • 7.1% of respondents in the Energy and Utilities industry say social software is important today, but 46.8% say social software will be important in three years.
  • 9% of respondents in the Manufacturing industry say social software is important today, but 50% say social software will be important in three years.
  • 10.4% of respondents in the Financial Services industry say social software is important today, but 58.4% say social software will be important in three years.

The report opines that given that social business is still just getting started, one may be tempted to wait until the technology matures or there is more evidence to support its business value. However, says the report, that approach may delay achieving its potential in the organization, to the detriment of marketing, innovation, leadership and operations.

MIT professor, Alex “Sandy” Pentland, concludes that “... like any emerging technology trend, social business can seem perpetually just out of reach... not quite ready for prime time... if that’s your (position)... you may be overestimating the amount of effort it takes to start putting this trend to work...  today.”

For additional information about this study, please visit the SloanReview here; or to review all the questions and charted responses, go here.

 

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