Making the Case for Social Computing

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Extracting the benefits from social tools and techniques requires an upfront understanding of business objectives and an implementation plan that infuses traditional systems with greater collaboration capabilities.

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Making the Case for Social Computing

  1. 1. • Cognizant ReportsMaking the Case for Social ComputingExtracting the benefits from social tools and techniques requires an upfrontunderstanding of business objectives, as well as an implementation plan thatinfuses traditional systems with greater collaboration capabilities to engagewith internal and external stakeholders. Executive Summary social technologies need to be integrated with the Social computing has captivated the corporate communications infrastructure and linked with world as organizations seek to engage with specific business activities. customers to build brand advocacy. The busi- ness world has begun using social technologies As with many IT projects, social initiatives must to achieve numerous goals, including recruit- be business-driven. If they are championed only ment, service innovation, brand management, by the IT department, social projects tend to corporate reputation and greater collaboration become one-off platforms, not business-wide across the ecosystem of employees, partners and solutions. Shifting the mindset from providing a customers. platform to delivering a solution, our research shows, is crucial for social computing to succeed. Insurance companies are using social computing for policy underwriting, while the manufacturing Social Computing Trends sector has successfully used it for project man- One of the key trends for social is that every orga- agement and compliance. Organizations across nization has embraced it in one way or another. industries have also used social tools and tech- Companies might start with a very small initiative, niques to decrease the overall time to resolution like opening a Twitter account, or they may take for technical services. an enterprise-wide approach, such as developing a social strategy and supporting it with an enter- Companies tend to begin by deploying social prise-wide employee collaboration application or tools and technologies as standalone systems. a social platform to better connect consumers They then integrate these systems with enter- with their brands. prise applications, such as customer relation- ship management (CRM), content management, The enterprise-wide approach calls for a bet- compliance and search, to derive greater busi- ter IT policy environment and more collabora- ness benefits. To ensure usability and relevance, tion between business units and the IT function.1 cognizant reports | october 2012
  2. 2. Social Computing Trends Social Web Organization Marketing, communication, CRM, 1. Organization is using Target groups, recruiting, employer branding, social media channels potential employees,fans innovation, crowdsourcing Employees using social media News channels, 2. Employees are publicly communicating friends of employees, via social media platforms Internal social external stakeholders collaboration Pressure groups, Business politics, 3. External stakeholders are former employees, certain products and services communicating about the organization customers and suppliers via social mediaSource: “Protecting and Strengthening Your Brand,” Ernst & Young, May 2012, http://www.ey.com/Publication/vwLUAssets/Protecting_and_strengthening_your_brand_Social_media_governance_and_strategy/$FILE/Insights_on_IT_risk_Social_media.pdf.Figure 1Doing so will result in several benefits, including The adoption of social technologies is becomingimproved engagement with consumers and other pervasive across diverse industries, from highstakeholders, better employee communications technology to energy (see Figure 3, next page).with internal and external business partners anda centralized place for external stakeholders to The use of social technology has both strategicconverse about the organization (see Figure 1). and tactical imperatives. For instance, driving innovation is considered to be as important asWhile organizations have started finding new uses locating experts and expertise. Other importantfor social computing, enhancing the relationship objectives include corporate alignment and strat-with consumers is still the top priority.2 Increas- egy, on the strategic side, and customer service,ingly, they are using this medium for recruitment, on the tactical side (see Figure 4, page 4).product or service innovation and brand manage-ment (see Figure 2).Expanding or Initiating Now80% Marketing and sales70% 66% 62% Business development/ 59% 59% 58% 57%60% research50% Customer service (i.e., feedback, support, handling complaints)40% Corporate brand and30% reputation management20% Recruitment/alumni 10% Product and/or service innovation (i.e., coinnovation, crowdsourcing, 0% knowledge resource)Source: “Going Social,” KPMG International, 2011, http://www.kpmg.com/GE/en/IssuesAndInsights/ArticlesPublica-tions/Documents/Going-social-survey-2011.pdf.Figure 2 cognizant reports 2
  3. 3. Social technologies today are deployed primar- Social computing software that encouragesily in two broad areas: internally for employees enterprise-wide collaboration is predicted to growand externally for customers, consumers and at a CAGR of 61% from 2010 to 2016, according topartners (see Figure 5, next page). The technolo- Forrester Research, Inc., with the total market forgies are used to better engage with various com- social products and services estimated to reachmunities (employees, customers, etc.) and drive $6.4 billion by 2016. Such products are expectedeffective collaboration among stakeholders for a to enhance employee productivity by evaluatingspecific business process. and aligning processes, information and people with the needs of the organization.5Social Computing Outside the OrganizationCustomer-facing departments were the first to Social computing is also driving innovation atadopt social technologies, by creating a presence some companies by influencing or enablingon Facebook, Twitter, Linkedin and blogs, since new ways of working. For instance, video col-these were the channels where customers were laboration is increasingly finding acceptance inspending the most time. These channels were an organizations, with video-based conferencingeasy way for them to connect and engage with implemented by more than a quarter of the orga-customers.3 For example, telecom companies nizations surveyed by Forrester in a 2010 studybegan using Twitter to provide better customer (see Figure 6, page 5).service to their consumer base. Now, organiza-tions use social to fulfill end-to-end processes for Social computing allows best practices to becustomers, such as buying clothes directly from shared across the organization to solve complexFacebook after consulting with their friends on business problems by, for instance, enablingthe site, and posting a review after the purchase. communities of experts to collaborate. For example, a U.S.-based midsize property andSocial Computing Within the Organization casualty insurance company is piloting an inte-Organizations also use social technologies to grated social networking solution in its auto-connect employees with each other and with mated policy underwriting system, in order topartners and suppliers. Those that do are more enable expert input.6 Another example is a lead-likely to be market leaders, gain more market ing U.S.-based manufacturer of fastening systemsshare and boost profit margins.4 for the aerospace industry, which implemented social software to increase the productivity of itsAdoption of Social Technologies Across Industries Percent of respondents using at least one social technology tool High-tech, telecommunications 86Business, legal, professional services 77 Public administration 74 Pharmaceuticals 74 Retailing 69 Transportation 69 Healthcare, social services 67 Manufacturing 64 Financial services 64 Energy 62Base: 4,261Source: Jacques Bughin, Angela Hung Byers and Michael Chui, “How Social Technologies are Extending the Corpo-ration,” McKinsey Quarterly, November 2011, http://www.mckinseyquarterly.com/PDFDownload.aspx?ar=2888.Figure 3 cognizant reports 3
  4. 4. Social Technology Drivers Vary from Tactical To Strategic“For which of the following activities is your firm currently using social technology?” Marketing activities 54% Customer service activities 45% Reducing travel costs for meetings 45% Communicating with employees 42% Enabling more effective work among 42% geographically dispersed teams Capturing and sharing knowledge 39% Working with partners or suppliers 32% Managing projects 31%Foster collaboration within a division or group 29%Making best practices easier to find and share 27% Locating experts and expertise 25% Driving innovation 23% Building communities of interest or practice 23% Driving corporate alignment and strategy 20%Recruiting internally for projects or initiatives 19% None 7% (Percent of respondents)Base: 262 senior-level IT decision-makers (multiple responses accepted)Source: “Social Networking in the Enterprise: Benefits and Inhibitors,” Forrester Consulting and Cisco, May 2010,https://www.cisco.com/web/offer/gist_ty2_asset/SocMednInhib/SocNW_En_TLP.pdf.Figure 4project team. Targeted areas for improvement in the statistically significant correlation amongwere project management and compliance. As certain business processes and self-reporteda result of the implementation, compliance time corporate metrics, such as the following:was reduced by 64% (see Figure 7, next page). • Market share gains.Social Benefits • Operating margins compared with competitors.Organizations have reported market share gains • Market leadership.when using social technologies.7 This is visibleDeployment of Social Technology Customers Social Employees Partners Enterprise Consumers Network • Share • CollaborateSource: Cognizant Technology SolutionsFigure 5 cognizant reports 4
  5. 5. Videoconferencing Apps On The Radar“What are your firm’s plans to implement or expand its use of the following collaboration andcommunication technologies in the next 12 months?” E-mail 34 45 3 10 Team document-sharing sites 33 32 10 15 (e.g., SharePoint, eRoom, Lotus Quickr) Web conferencing 32 35 10 13 Room-based videoconferencing 30 32 8 16 (including telepresence) Calendar 24 45 4 10 Instant messaging 22 36 7 14 Desktop videoconferencing 21 26 9 24 0 10 20 30 40 50 60 70 80 90 100 (Percent of respondents) Expand/upgrade existing implementation Implementing/implemented Piloting Interested/consideringBase: 262 senior-level IT decision-makers (”Decreasing,” “Removing” and “Not interested” responses not included)Source: “Social Networking in the Enterprise: Benefits and Inhibitors,” Forrester Consulting and Cisco, May 2010,https://www.cisco.com/web/offer/gist_ty2_asset/SocMednInhib/SocNW_En_TLP.pdf.Figure 6The impact of social is also seen in self-reported have also encountered challenges along the way.corporate performance metrics (see Figure 8, For starters, organizations are finding it is morenext page). beneficial to pursue social initiatives as an end- to-end business strategy instead of a stand-aloneChallenges project within a business function such as sales,Although adoption of social computing within service and marketing. It is, therefore, impor-the organization is growing rapidly, companies tant to identify processes and apply social as anMonthly Compliance Hours & Wiki Creation 700 5,000 600 4,000 500Compliance Hours Wiki Creations 3,000 400 300 2,000 200 1,000 100 0 0 Jan. ‘07 May ‘07 Sept. ‘07 Jan. ‘08 May ‘08 Sept. ‘08 Jan. ‘09 May ‘09 Sept. ‘09 Jan. ‘10 May ‘10 Cumulative creation Pre-Wiki Post-Wiki Trendline Pre-Wiki Trendline Post-WikiSource: “Social Software for Business Performance,” Deloitte Development LLC, 2011, http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/TMT_us_tmt/us_tmt_%20Social%20Software%20for%20Business_031011.pdf.Figure 7 cognizant reports 5
  6. 6. enabler of improved effectiveness, efficiency and employees fear that their statements on socialcollaboration among stakeholders. media could be used by their employer to analyze their behavior, making them reluctant to expressIn this spirit, and to achieve maximum benefits, it their opinion even on intra-company platforms.is important to consider the technology aspects There must be a concerted and visible effort toof integrating social technologies with enterprise- allay such fears. And, as noted earlier, once socialwide core applications to fulfill an entire process. computing has been tested in one process withinCompanies should begin by focusing on one an organization, it should be integrated acrossprocess in which social computing is used, such lines-of-business.as CRM. After the initial foray is successful,they can gradually extend social computing to all One reason for the lack of integration is thatprocesses in the organization. many social initiatives are launched to serve a specific need at the grassroots level, or they areMoreover, social computing today often revolves driven by top management. When initiated at thearound just touching base with individuals. grassroots level, the tool selected may not beInstead, this initial contact could and should appropriate for the larger organization, resultingbe further utilized for innovation. Lastly, many in the loss of any knowledge that is generated.Correlations with Corporate Performance Processes that significantly Correlation P-value (less than correlate with self-reported coefficient (higher = 0.05 = statistically corporate performance metrics greater correlation) significant) Market share gains Using social technologies to scan 0.263 0.007 external environment Using social technologies to match 0.422 0.002 employees to tasks Positive change in level of social 0.254 0.001 technology integration into day-to- day work (2010-11) Operating margin Level of social technology 0.130 0.016 compared with integration into day-to-day work competitors Share of employees using intranet to 0.007 0 conduct transactions Using social technologies to assess -0.325 0.035 employee performance Positive change in level of social 0.276 0.007 technology integration into day-to- day work (2010-11) Market leadership Fully networked -0.616 0.019 (i.e., first in industry share) Externally networked -0.444 0.001 Percent of employees using social -0.014 0 technologies Share of online sales 0.004 0.044 Level of social technology 0.135 0.005 integration intoday-to-day work Share of employees using intranet to 0.003 0.021 conduct transactionsSource: Jacques Bughin, Angela Hung Byers and Michael Chui, “How Social Technologies are Extending the Corpo-ration,” McKinsey Quarterly, November 2011, http://www.mckinseyquarterly.com/PDFDownload.aspx?ar=2888.Figure 8 cognizant reports 6
  7. 7. When implemented from the top, the business • Begin with a clear strategy and roadmapimpact may not be visible to all employees. For for social engagements, based on overallexample, employees may not be aware of met- business objectives. Define specific use casesrics for measuring ROI on social media, such as that would be deployed in social, along with a“media equivalent value.”8 selection of technology solutions. For example, if the business goal is to improve overall cus-Also, when social computing policies are tomer service, identify which social engage-implemented from the top without consideration ments would better achieve that — opening aof employee opinion, the impact might be dissi- Twitter account or creating a knowledge man-pated. Business needs may not be understood at agement system? Based on these various busi-the time of implementation, or employees might ness use cases and the technology options,game the system to meet the requirements, for prioritize based on cost and business impact.example, by creating fake testimonials.9 • For social to succeed internally as well as externally, obtain support and participationAnother consideration is employee education. from top management. As part of the road-Companies need to educate employees on how to map, it is important to establish clear buy-inengage in social media without opening security and active participation to ensure the orga-gaps. A basic step is to caution them about divulg- nization is ready to connect and collaborateing corporate plans on social networks, even by with its stakeholders using social. Today, manysimply relaying cautionary tales. CEOs have started to use social themselves in the role of brand ambassador and are lookingAn example is a large manufacturing company, to connect in a social way with customers andwhose executives announced its major expan- employees.sion plan on Facebook and Twitter. The idea was • Consider social from a process standpoint.to improve shipping times by launching a state-of Identify an end-to-end process and evaluatethe-art warehouse. how social can help improve it. For this to hap- pen, social technologies need to be tightlyOn the day of the move to the new location, sev- integrated with their core enterprise applica-eral individuals wearing the uniforms of a large tion so that, from a customer or stakeholderlogistics company drove off with more than $1 mil- viewpoint, it is a seamless experience insteadlion worth of equipment.10 The lesson: Think twice of two different channels.before broadcasting strategic business plans on • From an ongoing operations standpoint,social media, as you have no control how far the clearly define the social media policy, alongmessage is being spread, nor what people might with a dedicated team and structure to effec-do with that information. tively manage the initiative.A Roadmap These are some of the key points to keep inOrganizations need to consider social comput- mind from a long-term strategy perspective.ing not as a one-off technology or business solu- Remember, social is just another channel oftion but as an enterprise-wide initiative. They can analytics or unstructured data; however, it is alsoachieve this by focusing on the following: an increasingly important part of how business is done today. cognizant reports 7
  8. 8. Footnotes IT Consumers Transform the Industry: Are You Ready?” IDC, May 2011, http://www.ca.com/~/media/1 Files/whitepapers/signature-research-idc-whitepaper-final.pdf.2 “Going Social: How Businesses Are Making the Most of Social Media,” KPMG International, 2011, http://www.kpmg.com/GE/en/IssuesAndInsights/ArticlesPublications/Documents/Going-social- survey-2011.pdf.3 Michael Stelzner, “Social Media Marketing Industry Report, 2011,” Social Media Examiner, April 2011, http://www.socialmediaexaminer.com/SocialMediaMarketingReport2011.pdf?9d7bd4.4 Jacques Bughin and Michael Chiu, “The Use of Web 2.0 in Businesses,” McKinsey & Co., Dec. 13, 2010, http://www.mckinsey.com/insights/mgi.5 “Enterprise Social Software to Become a $6.4 Billion Market in 2016,” Forrester Research, Inc., December 2011, http://www.pcworld.com/businesscenter/article/245375/forrester_enterprise_social_ software_to_become_a_64_billion_market_in_2016.html.6 “Social Networking in the Enterprise: Benefits and Inhibitors,” Forrester Consulting and Cisco, June 2010, https://www.cisco.com/web/offer/gist_ty2_asset/SocMednInhib/SocNW_En_TLP.pdf.7 Jacques Bughin, Angela Hung Byers and Michael Chui, “How Social Technologies are Extending the Organization, McKinsey Quarterly, November 2011, http://www.mckinseyquarterly.com/PDFDownload. aspx?ar=2888.8 Media equivalent value is the equivalent, in money terms, of the impressions that have been generated through social computing that would otherwise have been acquired through paid media.9 “Social Software for Business Performance: The Missing Link in Social Software: Measurable Business Performance Improvements,” Deloitte Development LLC, 2011, http://www.deloitte.com/ assets/Dcom-UnitedStates/Local%20Assets/Documents/TMT_us_tmt/us_tmt_%20Social%20 Software%20for%20Business_031011.pdf.10 Minda Zetlin, “Unintended Consequences: How to Keep Social Media from Becoming a Security Risk,” Inc., Jan. 11, 2011, http://www.inc.com/internet/articles/201101/unintended-consequences-how-to-keep- social-media-from-becoming-a-security-risk.html. cognizant reports 8
  9. 9. CreditsAuthors and AnalystSanjay Fuloria, Ph.D., Senior Researcher, Cognizant Research CenterYuvaraj Velusamy, Researcher, Cognizant Research CenterSubject Matter ExpertAmit Shah, Manager, Cognizant SocialDesignHarleen Bhatia, Creative DirectorSuresh Sambandhan, DesignerAbout CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business processoutsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquarteredin Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deepindustry and business process expertise, and a global, collaborative workforce that embodies the future of work.With over 50 delivery centers worldwide and approximately 145,200 employees as of June 30, 2012, Cognizant is amember of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among thetop performing and fastest growing companies in the world.Visit us online at www.cognizant.com for more information. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 207 297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 207 121 0102 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com©­­ Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

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