Deriving Business Value from Social Networks

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How do some people sway public opinion where others fail? What's the secret behind personal influence? How important are connections? These have become all-important questions in our age of social networking. Social networks have expanded the influence of connections to unimaginable proportions. Clearly, there is business value to be derived from networks. It's no wonder then that the science of social networks has kindled interest among industry think tanks and corporate executives.Read more: http://bit.ly/Njs9MX

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Deriving Business Value from Social Networks

  1. 1. Insights Deriving Business Value from Social Networks - Dr. Jai Ganesh, Gopakumar How can some people sway public opinion, where others fail? What’s the secret behind personal influence? How important are connections? Research around networks sheds light on some of these questions, which have become all-important in the age of social networking. In 1929, in a short story called “Chains”, Hungarian writer Frigyes Karinthy introduced the idea – now famous as the Six Degrees of Separation – that it takes no more than five intermediaries to connect any two people in the world to each other. Dare we say that online social networking has compressed that chain further, and also expanded the influence of connections to unimagined “Occupy Wall Street” and “Arab Spring” proportions? Small wonder then, that the arcane science of social network research has sparked interest not only in academicians, but also among industry think tanks and business organizations, which realize that there is immense value to be derived from these networks. www.infosys.com
  2. 2. Application of Network Ideas The exchanges taking place in social networking environments go beyond providing direct value to participants. In fact, businesses can wield approaches based on social network analysis as powerful levers, at different levels of the organization, to serve different goals. Let’s elaborate that by taking the example of the banking industry. OVERVIEW A bank can study social opinion to gather early insight into the perception of its brands, products and services. This could be particularly valuable before a new product launch, should user feedback highlight certain issues that the bank may have overlooked. A leading Canadian Bank introduced a new mobile Essentially, network studies seek to banking app to employees, who not only tested the product but also identified identify the nature and structure other opportunities. Thanks to this feedback, the Bank was able to deliver the of connections among various ideal app to customers. individuals or entities (organizations, That being said, how can organizations deconstruct the incessant broadcasting websites, customer records and so of customer opinion over social media into meaningful, actionable information? on), called “nodes” and their impact The answer lies in mining the collective intelligence of the community, which on different events and decisions. is latent in the content of discussion threads, chat room conversations, blogs, Accordingly, networks can significantly ratings et al. influence an organization’s ability to achieve business goals, especially in Such analysis can identify dominant sentiments, views and experiences discussed present times when the chatter on in social media that are important from an organization’s strategic perspective. social media, mobile and other online It can also pinpoint key forums, websites and maybe even individuals exerting channels is creating an overload of maximum influence over shaping the image of the firm, its products and services. network related information – 2 billion The last one is extremely valuable information, which flies below the radar of exabytes annually, at last count! most banking organizations, which typically stratify the importance of their customers by the size of their bank account. Just to cite an example – a global Used right, this information is a bank executive confessed that a particular individual, who qualified as a “low goldmine for businesses, which can service” customer, actually had 100,000 followers on Twitter! formulate focused actions targeted to the needs of different constituencies, Market sentiment analysis techniques reveal how customers feel about an such as markets, customers and enterprise, a brand, a product or service. The results of this analysis can be employees. There’s enough evidence enhanced by combining them with the content of customers’ posts, which in from research studies to show that turn would enable banking organizations to respond better to the sentiments network factors strongly influence expressed by the key influencers in the network. brand image, adoption of new The next logical step for banks is to persuade key influencers and early adopters products and services, pricing and to exert “desired” influences over others within their network, such as spreading promotion, employee performance, excitement about a new product, or expressing confidence in a new service. For innovation, and the ability of instance, they could ask a set of influential customers to try out a new product organizations to change. like a digital wallet and talk about various aspects of the experience, such as usability and security, to a wider group. By identifying the best “seeding points” that is, well-connected people at the hub of social networks who will latch on to a product and promote it widely amongst the people they know, network analysis can improve the efficacy of communication campaigns. So far, industries other than banking have cracked the code. A global automotive company famously gave out 100 cars of a new model before its official launch to social media enthusiasts to try out for 6 months. In return, all that these people had to do was talk about their experience in social media, which the company put up on its website without making any changes! The opening sales were spectacular to say the least.2 | Infosys
  3. 3. There’s another very important reason why organizations must “club”, it has a big chance of succeeding with the rest. In fact, thismonitor the activities of the key influencers among their customers, is the driving principle behind the wealth management business.and that is to mitigate churn. Social influence cuts both ways; so Social networking can play a big role in improving organizationaleven as it fosters positive behavior, it can do exactly the opposite effectiveness when the connections are between the right people.as well. It has been observed that when an influencer leaves The leaders in every organization try hard to organize their people inhis banking service provider, he takes others with him or stops the best way to “get the job done”. Network analysis often providespotential customers from coming on board. Banks must guard powerful and unique insights into whether the actual flow of workagainst allowing something like this to assume viral proportions. and communication between members is aligned with the goals ofOnce again, by using social network data (including centrality, the group. In other words, it enables the organization to diagnosedegree of centrality, number of friends and followers) to enrich work efficiency.models, which predict churn, banks can take evasive action. Network analysis also reveals patterns of formal and informalThe network approach focuses on the patterns of relationships connections among members of specific functions, divisions oramong individuals. One of its key findings is that like-minded business groups, and their impact on business goals. Studies haveindividuals are more likely to stay connected with each other, and consistently shown that well managed network connectivity isare more likely to share interests, ideas, norms and even behaviors. critical to performance, learning and innovation.Therefore, if a bank manages to get through to one member of thisLast but not least – and certainly not in the banking context! – network analysis can be applied to customer risk modeling. Enhancing existing riskmodels with customers’ social networking information could give banks an inkling about possible credit risks or fraudsters. After all wouldn’t theylike to know if a potential customer has a number of friends who are proud to be habitual defaulters? http://socialmediatoday.com/emoderation/546814/how-retail-and-investment- banks-are-using-social-media-case-studies Reference http://hbr.org/2011/07/whats-your-social-media-strategy/ar/1 http://practicalsocialmedia.com/general/ford-fiesta-a-successful-social-media- marketing-example/ Infosys | 3
  4. 4. About the Authors Dr. Jai Ganesh Principal Research Scientist at Centre of Innovation for Tomorrow’s Enterprise, Infosys Labs Research and innovation leader with expertise in intellectual property creation, thought leadership, technology strategy and new product development. Jai obtained his PhD in management from Indian Institute of Management Bangalore (IIMB) and also hold an MBA. Jai is a recipient of the Chevening Rolls-Royce Science and Innovation Leadership scholarship at the University of Oxford. His research focuses on Pervasive Computing, Adaptive enterprises, Hypercompetitive businesses, Social Network Analysis, Social Media, Social Movements, Web Accessibility & Usability, Augmented Reality and Immersive Interaction Technologies. Jai has also published in a number of leading peer reviewed journals and conferences and serve as a reviewer for a number of peer-reviewed journals and conferences. He conceptualized and led the development of iProwe which is the first patented product for Web Accessibility & Usability Assessment and Remediation. Gopakumar Senior Research Scientist at Centre of Innovation for Tomorrow’s Enterprise, Infosys Labs Gopakumar is a senior research scientist at Centre of Innovation for Tomorrow’s Enterprise (CITE) in Infosys Labs. He has over 10 years of experience in leading important talent and organization development programs at leading firms. At Centre for Innovation, he is leading a series of research projects that applies network perspectives to improve organizational effectiveness and harness social media intelligence. He has presented in top international conferences such as Academy of Management (AoM) annual meeting, Academy of Human Resource Development (AHRD) annual conference, Strategic Management Society (SMS) conference, and International Network for Social Network Analysis (INSNA) Sunbelt conferenceAbout InfosysMany of the worlds most successful organizations rely on Infosys todeliver measurable business value. Infosys provides business consulting,technology, engineering and outsourcing services to help clients in over30 countries build tomorrows enterprise.For more information, contact askus@infosys.com www.infosys.com© 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledgesthe proprietary rights of the trademarks and product names of other companies mentioned in this document.

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