IBM’s announcement that it has made big cost savings in productivity as a result of social media is one of the biggest business endorsements of Web 2.0 to date. What a difference a year makes. It didn’t seem so long ago that businesses, local councils and even the Pentagon were talking about banning social media in the workplace.
As recently as October there was a report in Germany about how 30 blue-chip firms listed on DAX were banning Facebook and Twitter due to a mixture of security fears and falling employee productivity.
IBM’s announcement therefore that it not only encourages social media use but that it has actually made £2.5m in productivity savings in a year is quite staggering -- at least at first glance.
There are two things to consider here. First, where and how were those cost savings made, and secondly, should this be a big green light to any business looking to embark on or increase their engagement with social media?
I believe that IBM set up its social media policy in 2007, driven by its marketing department and desire to see IBM employees spread the IBM message across all possible social media outlets. It’s taken a while.
Educating staff on how to use social media, in particular Facebook and Twitter, and developing guidelines on where and how to use such media in terms of information sharing and communication is not an overnight job, especially for a company like IBM.
So where did the savings come from? According to the company, reduced travel and communication costs have been at the heart of the savings.
Are these savings really down to social media? Analyst firm Forrester, which is writing a report on IBM’s social media exploits, does suggest that "creating a cultural affinity for social media allows employees to use both internal and external tools to build relationships and identify ways to improve the business. This creates efficiencies of scale and encourages best practices".
That's very true. However, businesses should not view social media as purely cost-saving tools.
Efficiencies are a welcome byproduct but the focus has to be on improving internal and external communications as well as developing links with new partners and suppliers.For most resellers, social media is generally viewed as a sales and marketing tool, quite rightly.
IBM should not be seen as a yardstick for measuring business social media use. The company made some savings, which is great, but we would surely be much more interested in finding out how social media has helped grow the business.
Also, few resellers could afford to invest the sort of time and resources IBM has to achieve its cost and efficiency savings. Remember, these savings have been three years in the making.
Social media means different things to different people too.
But essentially business is about building relationships and social media accelerates the process and empowers individuals to increase their traditional network and influence. It can be a useful sales tool, a lead generator or a customer support medium.
Questions to be answered
Where will social media help resellers most? What will increased communications on Twitter with customers achieve? Are there opportunities to create links with potential new partners overseas through a social network?
Perhaps new suppliers could be recommended. Would a dedicated forum provide a good platform for ongoing communication with existing customers? What role might Facebook play in promoting the brand and driving sales?
All resellers have to decide how best to use social media to fit their specific requirements and nowhere does that mean measuring yourself against IBM’s cost savings.
Understanding each social media tool is essential too but it’s also important to recognise the limitations; we are still at an early stage in social media development.
Tim Berners-Lee has recently been critical of social networks for creating data cul-de-sacs and stifling innovation – and to a certain extent he is right. Social media is still fragmented and, as Viadeo has advocated on many occasions, there needs to be a more open web, a more integrated web.
Social networks could be the platform on which the future web for business is built. For companies like us, that’s the challenge, for resellers, that’s the opportunity.
Wayne Gibbins is partnerships director at Viadeo
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