Chapter 8: Social Media Information Systems

Summary: The best response to rapid technological change is to learn and understand underlying principles. This chapter will focus on principles, conceptual frameworks, and models that will be useful to address the opportunities and risks of social media systems in early years of your professional career. We will also determine what the purpose for having a social media presence is. Companies have social media strategies.

Q1: What is a social media information system (SMIS)? Social media (SM):
 IT for sharing content among networks of users, it enables communities of practice: People related by a common interest. It’s a convergence of many disciplines: psychology, sociology, computer science, MIS, marketing, and organizational theory. Companies hire staff to maintain their SM presence, promote their products, build relationships, and manage their image. Depending on how organizations want to use SM, they can be users, providers, or both.Social media information system (SMIS): Sharing content among networks of users. Social media active users: 73+% of people with Internet access use SM, and 40% access SM via their mobile phones. 77% of Fortune 500 companies maintain active Twitter accounts; 70% Facebook pages, 69% YouTube accounts. 68% of Pinterest users are female. 80% LinkedIn users are 35 or older.Three SMIS Roles: 1) Social Media Providers: Facebook, Google+, LinkedIn, Twitter, Instagram, and Pinterest platforms. Attracting, targeting demographic groups. May charge fee, depending on application and purpose. Ex. Free company page on Facebook, but Fee to advertise to communities that “Like” that page. Internal SM using SharePoint for wikis, discussion board, photo sharing.2) Users: Individuals and organizations. 3) Communities: Mutual interests that transcend familial, geographic, and organizational boundaries.  Ex. Community A - first-tier community of users with direct relationship to the site.  User 1 belongs to three communities — A, B, and C. Communities B–E - second-tier communities intermediated by a first-tier user. Number of second and higher tier community members grows exponentially. Exponential nature of relationships offers sponsoring organizations both a blessing and a curse. If social media site wants pure publicity, will need viral hook to relate to as many communities as possible.Social Media Application Providers: host SM presence using elastic servers in the cloud. Develop and operate custom, proprietary, social networking application software. Content data - data and responses to data contributed by users and SM sponsors. Connection data - data about relationships. Must have procedures for creating content, managing user responses, removing obsolete or objectionable content, and extracting value from content. Social media creates new job titles, new responsibilities, and need for new types of training. SMIS is Not Free: Costs to develop, implement, and manage social networking procedures. Direct labor costs. 92% of companies use social media to recruit employees (93% from LinkedIn). 73% hired using social media, and 1/3 rejected candidates because of social profile.

Q2: How do SMIS advance organizational strategy?

Strategy determines value chains, value chains determine business processes and processes determine SMIS requirements. How do value chains determine dynamic processes? Dynamic process flows cannot be designed or diagrammed. SM fundamentally changes balance of power among users, communities, and organizations. To summarize how social media contributes to five primary value chain activities and to human resources support activity:

Activity -> Focus -> Dynamic process -> risks

Sales/marketing ->outward to prospects->social CRM, peer-to-peer sales-> loss of credibility, bad PR

Customer Service -> outward to customer -> peer-to-peer support -> loss of control

Inbound Logistics -> upstream supply chain providers -> problem solving -> privacy

Outbound Logistics -> downstream supply chain shippers -> problem solving -> privacy

Manufacturing/operations -> outward for user design; inward to operations and manufacturing -> user-guide design, industry relationships, and operational efficiencies -> efficiency/effectiveness

Human resources -> employment candidates; employee communications -> employee prospecting, recruiting, and evaluation; SharePoint for employee-to-employee communication -> error, loss of credibility

Social Media and the Sales and Marketing Activity: Dynamic, SM-based CRM process: In the past, organizations controlled their relationships with customers using structured processes and related information systems. Primary purpose of traditional CRM was to manage customer touches.Social CRM: Customers craft own relationship ->Ex. Wikis, blogs, discussion lists, frequently asked questions, sites for user reviews and commentary, other dynamic content.Customers search content, contribute reviews and commentary, ask questions, create user groups, etc. Not centered on customer lifetime value.

Social Media and Customer Service: Relationships emerge from joint activity, customers have as much control as companies. Product users freely help each other solve problems. Selling to or through developer networks most successful. Microsoft's MVP program. Peer-to-peer support risks loss of control. Social Media and Inbound and Outbound Logistics: Benefits: Numerous solution ideas and rapid evaluation of them. Better solutions to complex supply chain problems. Facilitates user created content and feedback among networks needed for problem solving. Loss of privacy: Open discussion of problem definitions, causes, and solution constraints. Problem solving in front of your competitors. Social Media and Manufacturing and Operations: Improves communication channels within organization and externally with consumers, design products, develop supplier relationships, and operational efficiencies. Crowdsourcing, Businesses-to-consumer (B2C)

Social Media and Human Resources: Employee communications using internal personnel sites.Ex: MySite and MyProfile in SharePoint. Finding prospective employees, recruiting and evaluating candidates. Place for employees to post their expertise. Risks: Forming erroneous conclusions about employees, Becoming defender of belief or pushing unpopular management message.

Q3: How do SMIS increase social capital?

Capital: Investment of resources for future profit. Types of business capital: Physical capital: produce goods and services (factories, machines, manufacturing equipment). Human capital: human knowledge and skills investments. Social capital: social relations with expectation of marketplace returns.What Is the Value of Social Capital?: Value of social capital - Number of relationships, strength of relationships, resources controlled. Adds value in four ways: Provide information about opportunities, alternatives, problems, and other factors important to business professionals. Provide an opportunity to influence decision makers who are critical to your success. Be a form of social credentials. Personal reinforcement of a professional’s image and position in an organization or industry.How Do Social Networks Add Value to Businesses?: Progressive organizations: Have Facebook, LinkedIn, Twitter, other SN sites. Encourage customers and interested parties to leave comments. Risk – encouraging excessively critical feedback. Klout score - measure of individual’s social capital.

Using Social Networking to Increase the Number of Relationships Ex.Youtube channels: the more views a channel gets, the more the content creator gets paid. However, the food and cooking channels have higher earnings than the beauty and style channels. The number of views is not the only factor influencing earnings. The resources (i.e., money) controlled by the viewers of the food and cooking channels may be higher than the viewers of the beauty and style channels.Using Social Networks to Increase the Strength of Relationships: Strength of a relationship: Likelihood other entity will do something that benefits your organization. Positive reviews, post pictures using organization’s products or services, tweet about upcoming product releases, and so on. Strengthen relationships by asking someone to do you a favor. Frequent interactions strengthen relationships.Using Social Networks to Connect to Those with More Resources: Social Capital = Number of Relationships × Relationship Strength × Entity Resources. Huge network of people with few resources less valuable than a smaller network of people with substantial resources. Resources must be relevant. Most organizations ignore value of entity assets.So What? Facebook for Organizations… and Machines: Chatter, by salesforce.com, to connect employees, customers. Communities identify, solve problems more quickly, more effectively. Readily find, recruit needed experts within organization. Faster project collaboration. Internal-facing communities use social media to make organizations better.

Q4: How do (some) companies earn revenue from social media?

Hyper-social organization: Transform interactions with customers, employees, and partners into mutually satisfying relationships with them and their communities. You Are the Product: “If you’re not paying, you’re the product.” Renting your eyeballs to an advertiser. Monetize, nothing is free. Processing time, data communication, and data storage may be cheap, but they still cost something.Revenue Models for Social Media: Advertising, Pay-per-click, Use increases value, Freemium: Offers users a basic service for free, and then charges a premium for upgrades or advanced features. Sales: apps and virtual goods, affiliate commissions, donations. The two most common ways SM companies generate revenue are advertising and charging for premium services. Does Mobility Reduce Online Ad Revenue?: By 2018, number of mobile devices to reach 10 billion. Mobile data traffic increases eleven-fold. Average click-through rate of smartphones is 4.12%, but just 2.39% on PCs. Conversion rate: Frequency someone clicks on ad makes a purchase, “likes” a site, or takes some other action desired by advertiser. Paid search, display or banner ads, mobile ads, classifieds, or digital video ads. Use of ad-blocking software growing by 69% per year. Mobile Ad Spending: Mobile users click ads more often and generate more revenue. Design problem: How best to configure mobile experience to obtain legitimate clicks and conversions?

Q5: How do organizations develop an effective SMIS?

Focus on being cost leader or on product differentiation. Industry-wide or segment focus. Premeditated alignment of SMIS with organization’s strategy. Next slide shows process of developing a practical plan to effectively use existing social media platforms. Social Media Plan Development: the process of developing a practical plan to effectively use existing social media platform. Steps (1-6): Define your goals, identify success metrics, identify target audience, define your value, Make personal connections, gather and analyze data. Common SM Strategic Goals: Brand awareness: extent that users recognize a brand,Vanity metrics: Metrics that don’t improve your decision making

Q6: What is an enterprise social network (ESN)?

ESN: Software platform uses SM to facilitate cooperative work of people within an organization. Used to improve communication, collaboration, knowledge sharing, problem solving, and decision making.Enterprise 2.0: Use of emergent social software platforms within companies, or between companies, partners or customers. Components: Search, Links, Authoring, Tags, Extensions, Signals Communication channels within corporations changed in equally dramatic ways. Using ESNs, employees can bypass managers and post ideas directly for CEO to read. Quickly identify internal experts to solve unforeseen problems. Deploying Successful Enterprise Social Networks: Organizations still learning how to use and deploy ESNs. Develop strategic plan for using SM internally via same process as used for external social media use. Assess likelihood of employee resistance.

Q7: How can organizations address SMIS security concerns?

Develop and publicize social media policy. Delineate employees’ rights and responsibilities. Index to 100 different policies at Social Media Today. Intel's Three Pillars of SM Policies: Disclose, Protect, Use Common Sense Managing the Risk of Inappropriate Content: User-generated content (UGC), Problems from external sources: Junk and crackpot contributions, Inappropriate content, Unfavorable reviews, Mutinous movements, Monitor by employees or use outsource service (ex. Bazaarvoice) Responding to Social Networking Problems: Leave it: “Never wrestle with a pig; you’ll get dirty and the pig will enjoy it.” Respond to it: If it yields positive result. Delete it: Comments by crackpots, have nothing to do with the site, or contains obscene or otherwise inappropriate content. Internal Risks from Social Media: Threats to information security, increased organizational liability, decreased employee productivity. Directly affect ability to secure information resources. Seemingly innocuous comments inadvertently leak information used to secure access to organizational resources. Ex: Bad idea to tell everyone it’s your birthday because your date of birth (DOB) can be used to steal your identity. Employees may inadvertently increase corporate liability when they use social media: Sexual harassment liability, Leak confidential information. Reduced employee productivity: 64% of employees visit non-work-related Web sites each day, Tumblr (57%), Facebook (52%), Twitter (17%), Instagram (11%), and SnapChat (4%).

Q8: 2026?

New mobile devices with innovative mobile-device UX, coupled with dynamic and agile information systems based on cloud computing and dynamic virtualization. BYOD policy: Organization the endoskeleton, supporting the work of people on the exterior. Employees craft own relationships with their employers. Non-routine cognitive skills more important.

Three Things I learned

1. I should think more seriously about how my personal social media profiles affect my prospective job opportunities. I should go through all my social media pages and see if there is a way to make it better.

2. I need to be more careful about the strength of the passwords I use and to remember to not recycle the same password as it makes it easier for someone else to open multiple of my accounts.

3.  Social media allows for firms to create deeper relationships with its customers. The firm seems more organic and open to communication with its customers.