Two decades ago, very few could have anticipated how the Internet would forever change the way business is conducted. The Internet turned just 30 years old in January, but has become so engrained within business processes that it has permanently and irreversibly changed the economics of information and business models.
So what’s next? Businesses are now looking for new ways to transform operations and better connect employees, partners and clients. No longer written off as a teenage trend or a temporary cultural obsession, social media is the tool being used to make that happen.
To stay competitive in today’s market, businesses are harnessing the power of social technologies to accelerate innovation and outpace competitors. A true social business integrates social into all areas of an organization. For example, chief marketing officers are gaining valuable insights from Facebook, Twitter and public forums, and using this data to react swiftly to customer trends and build stronger brands. Human resource leaders are using social to improve recruitment and talent management efforts.
Social Business and the CFO
How does social business transform the office of the chief financial officer (CFO)? Using publically available data collected from social tools, CFOs can streamline business processes and drive results. IBM’s 2012 Institute for Business Value’s Social Business-Focused Study reveals that today, 66 percent of companies use social business initiatives to find information more quickly, increasing productivity. In two years, that number is poised to spike to 84 percent.
This investment will pay off in real numbers. For example, social tools can help workforces decrease customer attrition by delivering exceptional customer experience. A 5 percent decrease in customer attrition can boost profits by up to 95 percent, while finding new customers can cost up to seven times as much as keeping existing customers. Those are numbers any CFO can get behind.
Today’s social businesses are effectively connecting people with people, and people with information. While these are fundamental aspects of a social business, it is time to start moving beyond collaboration and file sharing and give greater consideration to how social tools can streamline or enhance business processes and drive results.
When connecting people and sharing information through online sources, there is bound to be high volumes of free flowing data — hence the concept of “big data.” Big data describes the voluminous amount of structured and unstructured data that has been shared by the public, including audio files, posts to social media sites, video uploads, click streams, to name a few.
CFOs can quickly become inundated with this data deluge and then struggle to determine how to make sense of it all — and determine whether the company’s current social strategy is producing profitable results.
Yet, there is actually an untapped opportunity in the data generated by social media. According to research firm Gartner Inc., 80 percent of big data is unstructured and typically takes the form of a conversation among customers on a message board, comments on a video, tagging, liking, recommendations or one of the other social interactions that are increasingly taking root with customers.
By understanding this data, organizations can drive genuine insights and offer solutions for better meeting customer expectations or improving how a product is brought to market.
Harnessing Big Data’s Power through Social Analytics to Drive Results
How do we unlock the potential in big data? The answer lies in social analytics. An effective social business cannot exist without a strong set of analytics resources and know-how to harness big data behind the scenes.
Big data represents an opportunity for CFOs to learn from and use to make decisions. With social analytics, companies can integrate information from internal and external sources and make sense of big data to bring a new level of insight. From an internal perspective, the greater the volume of data that is harnessed, the more collective intelligence can be brought to bear. This leads to better decision-making.
The same holds true for customer-based decision-making. Take the marketing function for instance. Social analytics tools can deliver insight on visitor marketing and purchasing behavior, helping organizations personalize the online environment for each customer. It also allows marketers to better understand their constituents in order to take the best next course of action. This collective intelligence, from both inside and outside the organization, helps an organization make important and sound decisions in a timely manner.
What are companies achieving with the ability to harness big data from both inside and outside their organization? TD Bank Group, a financial services organization, is using enterprise social networking software across a global team of 85,000 employees as a business tool to make the most of its data and improve employee collaboration, information discovery and sharing to help unlock business benefit.
Among the benefits are time saved, increased productivity and streamlined operations. For example, the company is applying social software to help plan and replicate successful events like branch openings across different regions, while easily adapting to the needs and wants of local TD Bank customers. This has a direct effect on reducing the amount of time and capital required for planning such events. Social analytics takes away the “guess work” of determining what needs to be changed in order for an event to be successful in a specific market.
Bass Pro Shops is using social analytics to gain insight on its customers’ needs, as well as to provide better products and shopping experiences across all its channels — including retail stores, boat dealerships, Internet and catalog sales, wholesale and hospitality. As a result, Bass Pro Shops can now create and deliver more targeted promotions, circulars and catalogs to create a better customer shopping experience.
Getting Started with Social Analytics
Making the most of big data through analytics starts with watching and listening to what’s being shared. Then, define the business driver or target audience. Once the target audience is defined, social analytics can determine which individuals are having relevant discussions to the business, as well as what (and how) they’re sharing content, links and their sentiment about it.
A social business strategy can help CFOs manage company data and make critical business decisions. This is essential, as the future of business is about hearing what clients have to say and collaborating internally and externally to meet their expectations.
The information is out there, and the question is: which business will outpace its competitors by making the most of its data?
Jeff Schick is vice president of social software for IBM.
This article first appeared in the July/August issue of Financial Executive magazine.