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  • CFO.com | US

The Cost of Social Media Phobia

Far from being a distraction, social networking can drive productivity, customer service, and profits, users say.

Many executives may remain skeptical that the use of social media in the workplace is anything other than a distraction from the work at hand. But companies that forbid or severely restrict the modern communications technologies may miss out on assorted opportunities.

To assess the business value attainable through such forums as blogs, wikis, discussion boards, and innovation platforms, the CIO practice at Forrester Research recently surveyed 303 information-technology staffers who use social media in the course of servicing their organizations. Seventy-two percent of the respondents said social media has a positive impact on productivity in the front office, 70% said it makes IT operations more productive, and 61% said it makes the back office more productive. Only 46%, however, saw a positive influence on marketing.

Forrester points to Best Buy’s “Twelpforce” program as a vivid example of one way IT-enabled social media can drive value. More than 2,500 Best Buy employees who have signed up for Twelpforce — including not only technical and customer-service personnel but also in-store sales associates and other types of employees — can see and respond to problems that customers have aired on Twitter. The program enables Best Buy to offer a response capability vastly beyond what a dedicated help desk alone could provide.

Whether the intent is to assist internal or external customers, a key factor is adapting social media in a way that allows non-IT employees to be at least partly self-supporting in providing IT services. With regard to the Best Buy example, “it increases the likelihood of questions that are typically addressed by the help desk being resolved faster and at a lower cost,” says Forrester analyst Nigel Fenwick.

In Forrester’s survey, 72% of respondents said social media helps them get answers to questions, 68% said it helps them find information they need to be successful, and 62% said it lets people know what kind of help is available. And large majorities of respondents said social media has a positive impact on brand reputation (86%), innovation (80%), and customer service (78%). The finding on brand reputation is particularly notable, considering some striking instances in which social media has helped damage a company’s image.

For example, after United Airlines rejected a damage claim by Canadian musician Dave Carroll, who says he saw baggage handlers throwing his guitar around on the tarmac, he posted a video on YouTube of himself singing a song called “United Breaks Guitars.” The video has racked up more than 8 million views since it was posted in July 2009. Also, Greenpeace supporters barraged Nestle’s Facebook page this year with complaints that the company’s sourcing practices contributed to rain forest destruction in Indonesia.

“While there are many clear examples of companies applying social technologies to drive revenue, those tend not to be as well known as the horror stories,” says Fenwick. “But if you’re actually using social media [for customer service], you can see every day the correlation to brand reputation.”

Fenwick compares many companies’ reluctance to embrace social media to similar hesitation in the early days of the Web in the mid-1990s. “The initial reaction to the Web from executive suites was pretty negative,” he recalls. “Where was the ROI? Even as late as 2000, many retailers were questioning the value of an online store. There is a parallel between that and social computing today.”

In addition to supplementing help desks with social media platforms, Forrester advises CIOs and CFOs to develop collaborative learning around social media by asking savvy IT employees to run lunch-and-learn sessions. And even companies that opt to continue restricting the use of social media should consider different policies for IT staff in order to stimulate experimentation, Forrester says.

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