This is part five of a seven part essay series by popular business writers on the seven massive tech trends that will define your modern IT future. If you can’t wait for the series, you can get them all now in this ebook.
[Editor’s Note: Guest writer Julie Pitta is a journalist with more than 20 years of experience researching, writing and editing articles for print and the Web including positions as senior editor at Forbes Magazine and The Los Angeles Times. ]
Pity the poor IT manager. It used to be the job amounted to little more than keeping the big machines in the back office humming and providing employees services that amounted to little more than a short list of company-approved applications.
Well, it’s goodbye to all that. The business world’s enthusiasm for all things social, a passion largely being stoked by the fear of missing out on the new, new thing, promises to make life a lot more interesting for IT. ‘May you live in interesting times,” is an often-quoted Chinese proverb. Expect to hear it being muttered by many IT professionals as they find themselves grappling with the consequences of a world bent on communicating 24/7.
How will the Social Web impact businesses? Profoundly. Consider the amount of customer data many companies already collect. Technologically savvy retail giants Walmart and Gap have for years been gathering customer data at the point of sale. That information, entered electronically and stored in large databases where it can be analyzed by super-sophisticated software, has allowed these smart retailers to better understand customer desires.
And that’s only one example of how forward-thinking companies use advanced IT. Today’s IT departments see to it that so-called business intelligence makes its way into the right hands as quickly and seamlessly as possible. They build and maintain the roadways by which this data travels. Think of IT as the equivalent of a city’s public works department: invisible when systems are working at their peak, but the first to be blamed when they are not.
Sounds thankless? It is, and IT’s job becomes only more difficult as companies begin to track and parse the enormous volume of data now being generated by the Social Web. “The first five years of the Internet was all about connecting people,” says Jim Smith, a partner with venture capital firm Mohr-Davidow. “Now that everyone’s connected, they’re offering tons of information on their likes and dislikes.” The amount of potential business intelligence available will be “exponentially greater,” he says. “It will be a data deluge.”
Want to find out what people are saying about your product, service or company? A quick Google search may leave you dizzied by hits. Customers post and tweet with abandon, happy to share their opinions, half-baked and not, on any number of blogs, social networks and review sites. In fact, many of these Web denizens seem most fully alive when in virtual space. Just as problematic as the sheer volume of social data being generated is that this data is unstructured, meaning that it requires a good deal of massaging before it can be analyzed for meaning by today’s data-mining tools.
What’s troubling about the business world’s embrace of the Social Web is that IT, to date, has played only a minor role in its adoption. Marketing organizations have been social media’s loudest advocates. (Human resources departments, which are using social networks to recruit, are a close second. Sodexo, according to one report, has almost eliminated its $300,000 recruiting ad budget in favor of prospecting on Twitter, LinkedIn and Facebook.)
Until recently, it seemed that IT managers have been trying to postpone the inevitable. Only two years ago, more than half of the companies surveyed by Robert Half Technology were prohibiting their employees from using social media. But company directives have little chance of succeeding when up against the allure of the new, new thing. Most were ignored.
A new report from McKinsey & Co. is likely to persuade the skeptics. According to McKinsey, which polled more than 3,000 top executives, companies using social media are pulling in higher profits than those that are not. The “networked enterprise,” as McKinsey calls it, uses social media to connect with customers, partners and suppliers. They “are not only more likely to be market leaders or to be gaining market share but also use management practices that lead to margins higher than those of companies using the Web in more limited ways.”
It’s time for IT to be a leader, not a laggard. Its first move should be defensive: protecting the enterprise from the inevitable security risks that come with fluid boundaries.
Social media offers a vehicle for employees to publicly post company-sensitive information. (And the information, if salacious enough, may well go viral.)
At the same time, it leaves users at risk for malware. IT should develop posting policies, block sites it deems unproductive, and educate employees on the importance of password management and privacy protection. Software applications must be updated frequently to protect users with the latest security technology. Since security is always a moving target, networks must be evaluated and strengthened frequently.
At the same time, IT must help the enterprise make sense of the massive amounts of data being generated by social media. Historically, companies have had a difficult time organizing unstructured data into a format that can be properly analyzed. It may be that traditional methods for storing, retrieving and sifting through this data will have to be supplanted in favor of new technologies that are faster and more intelligent. If enterprises are to make optimal use of this information it must be evaluated by a system smart enough to understand context. And the system must be intelligent enough to route the data to those best equipped to take action.
For example, experts say social media can be used most effectively for customer retention. That will require that companies monitor the Web 24/7 to find opportunities to engage customers in real-time conversations. How well they respond to customer complaints and queries will become an increasingly important factor in shaping their reputations. Eventually, the smartest companies will interact with their customers in more sophisticated ways. They will be able to take advantage of tools that allow them to pinpoint a customer’s location using the GPS in his mobile phone. Let’s say a customer is headed to the grocer; a retailer in that same neighborhood can offer the customer a coupon for blue jeans at half their regular price. The customer, who loves blue jeans, adds clothes shopping to his list of errands that day. Not only does he buy a pair of jeans at the discounted price, he purchases a few shirts at full retail. He’s so happy with the deal he got on the blue jeans that he’ll undoubtedly be back.
Another important way IT can help the enterprise use social media effectively is by creating in-house social networks to remove communications barriers within companies. Cisco CEO John Chambers has said that the networking giant, long an early adopter of cutting-edge enterprise technology, is using social media to “flatten the organization.” Product teams are being organized via internal social networks, which by their very nature are democratic. In theory, ideas are judged not by their origin (in other words, which person came up with the idea and where he or she sits in the company’s hierarchy) but by merit alone, since a wider audience can judge ideas. Chambers notes that this kind of organizational change will be necessary to motivate Gen X and Y employees accustomed to freely airing their views online.
Internal social networks can break down the barriers between job functions, especially in larger organizations. Here’s an example: by listening to Twitter, customer service reps consistently hear customers complain about a particular feature of a new product. They do their best to work with customers either by offering free technical advice or by allowing the product to be returned. At the same time, they pass along these complaints to product development. The product team develops a patch, a fix that satisfies customers. The patch is delivered in weeks rather than months, due in large part to better communication.
Dell Computer has said that Chatter, a social media application from Salesforce.com that it has rolled out internally, connects the company’s sales force and its manufacturing operation. In the short time it has been in use Chatter has, Dell says, helped it to make more accurate delivery promises to its customers.
Social media has arrived, and it’s turning out to be much more than just a toy for the 20-something set. (A recent study found that more than half of all Americans aged 12 and above have profiles on Facebook.) Businesses are only beginning to tap into its possibilities and realize its potential for changing the way in which they communicate with customers and partners, and even within their own walls. The end result will be as profound: those who use this technology well will become the leaders in their industries and those who fail will become the also-rans. The frequency and speed that are social media’s greatest assets will strain people and organizations that have grown accustomed to a more leisurely pace. IT can serve as a trusted advisor during what promises to be a turbulent transition, helping organizations sort through the myriad of tools and approaches that will be needed to make best use of this new and powerful technology. Standing on the sidelines is no longer an option.