Why social tech's real value is inside the business

Most companies focus on social media, social marketing, and reputation management -- and miss potentially bigger benefits

Although companies have been urged to adopt "Web 2.0" and social technologies for years now, the truth is that relatively few have done so internally in any serious way -- and use inside the business is where the most value can be gained. Instead, the corporate focus on social technologies has been in marketing organizations that use it to monitor what customers are saying about the company and to try to influence customer views -- what's called reputation management -- by adding Twitter, Facebook, and so on to the traditional advertising and marketing channels. (And individual employees use social networking technology to build business relationships for their own benefit, of course.)

Despite the slow actual adoption for internal business benefit, the allure of social technology remains strong because of its potential to be a key value generator in a workplace that depends on collaboration, communication, and insights. Gartner analysts Anthony Bradley and Mark McDonald say that serious use of social tech in business is thwarted by several reasons: executive fear, a misplaced focus on using social media solely for marketing, and a lack of "purposeful reasons" for building communities. That's too bad, they say, because the potential of social tech used within the business dwarfs the marketing benefit that so many focus on today.

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Some companies have moved past the pilot stage and are enjoying serious benefits from social technologies used inside the business. For example, at IBM, social networking isn't just for spreading the word to customers. Employees use an internal Facebook-like network to find colleagues with the skills they need to solve pesky customer problems. Business travel site Egencia uses an internal social media platform to host Know Your Enemy feeds that give salespeople the competitive intelligence to win deals. And software giants such as Microsoft and Google use crowdsourcing (large numbers of relatively low-paid users recruited over the Web) to test applications more quickly and less expensively than they could in-house.

A recent Forrester survey shows only 28 percent of U.S. workers use social networking, and most of them are early adopters who are only testing the waters for its internal purposes. For example, Dell is regarded as a leading user of social media. It maintains several internal blogs for employees and uses the Chatter add-on to Salesforce.com to share information among its sales staff. But chief blogger Lionel Menchaca says that most of the users are early adopters, and only about 5,000 of Dell's more than 100,000 employees have taken company-offered courses on social technology.

Gartner's research shows that, in 2007 and 2008, about 80 percent of companies were using social technology for marketing and 20 percent internally, but analyst Bradley recently wrote that "the mix has since shifted closer to 50/50." A fall 2011 Frost & Sullivan survey showed 56 percent of surveyed organizations using social technology for professional purposes; of those, nearly 6 in 10 used it for internal purposes such as internal communication, training, and (for 4 out of 10) to "foster team spirit" or to "increase job satisfaction."

Collaboration: Social tech's low-hanging fruit

One enthusiastic user is grocery giant Supervalu, which operates or supplies 4,200 grocery stores under about a dozen brand names. It now has 8,000 users of the social networking platform Yammer, a number expected to nearly double this year in a move to increase collaboration, says CIO Wayne Shurts. One example: Managers of stores operating under different brands used Yammer to coordinate a campaign offering college students small refrigerators stuffed with discount coupons to generate repeat visits.

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