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A management report submitted in part fulfilment of the Degree of MSc in
Information Systems Management & Innovation, University of Warwick,
September 2013
MSc Information Systems Management & Innovation
(ISMI)
2012-2013
Student Name: RILWAN DAMOLA ALLI
ID Number: 1265304
Supervisor: Ola Henfridsson, Ph.D.
Date of submission: September, 2013
Word Count: 5,092
The Adoption of Online Communities for Customer
Engagement in Organizations: Factors and Challenges
WBS | COVER 2
The Adoption of Online Communities for Customer Engagement in Organizations: Factors and Challenges
Submitted by RILWAN DAMOLA ALLI
Year of submission: 2013
Declaration
This is to certify that the work I am submitting is my own. All external references and sources are clearly
acknowledged and identified within the contents. I am aware of the University of Warwick regulation
concerning plagiarism and collusion.
No substantial part(s) of the work submitted here has also been submitted by me in other assessments for
accredited courses of study, and I acknowledge that if this has been done an appropriate reduction in the
mark I might otherwise have received will be made.
Copyright
This report is protected by original copyright.
COVER
WBS | EXECUTIVE SUMMARY 3
EXECUTIVE SUMMARY
The emerging trend of enterprise social networks and web online communities have made a significant
contribution to the way businesses interact with both new and existing customers. Hence, the success of a
firm is attributed to the level of relationship with customers and how they can engage them in the process
of development and service innovation. With rapid growth of Web 2.0 technologies and social media,
managers and practitioners are very much interested in understanding and developing sustainable
strategies to successfully engage customers in the firm’s offerings.
Online communities have gained a significant level of reputation over the past few years with the growth of
internet users and the need for knowledge resources both from the organizational and customer
perspective. These internet communities are viewed to bring people together and facilitate a knowledge
sharing environment with the aid of social technical tools. Online communities have introduced the use of
real-time communication and discussion boards to foster interactivity within employees and customers.
The Yammer ESN platform for instance creates a social user friendly interface in facilitating communication
and knowledge sharing among employees and external parties. As a result of potential values of Business-
to-Customer (B2C) relationships, companies are increasingly adopting online communities for the main
purpose of developing an internal interactive culture and engaging their customers in their business
processes. In influencing their decision to adopt online communities, there are several factors including
functional, cultural and other decision factors.
This report discusses in detail these key factors influencing the decision of organizations to adopt online
communities and the major challenges involved in the process of adopting the practice. In addition, the
values and benefits associated with the successful implementation of online customer engagement
practices will also be highlighted based on research and theoretical analysis. Based on interviews with
managers in the field, this study will discuss the major factors influencing the decision to adopt online
communities in organizations and the challenges in the adoption in relation to employee customer
reactions. The implementation of new technologies is always a challenge in any organization, it is therefore
vital for managers or IT practitioners to be aware of these potential threats in devising effective methods of
dissolving them.
WBS | TABLE OF CONTENTS 4
TABLE OF CONTENTS
Executive Summary....................................................................................................................................... 3
Introduction.................................................................................................................................................. 4
Study Design................................................................................................................................................. 6
Online Communities ..................................................................................................................................... 6
Customer Engagement.................................................................................................................................. 7
Case Organizations ....................................................................................................................................... 9
Case community – Yammer ESN................................................................................................................ 9
Yammer Background............................................................................................................................... 10
Company B Background– Manufacturing Company................................................................................. 10
Company C Background – Home Theatre Installation Service Company................................................... 10
Company D Background – Solutions Consultancy Company..................................................................... 11
Research Findings....................................................................................................................................... 11
Factors influencing Adoption ...................................................................................................................... 12
Challenges encountered in the process of adoption.................................................................................... 14
Potential Value in adopting online communities ......................................................................................... 15
Recommendation and Conclusion............................................................................................................... 17
References.................................................................................................................................................. 18
List of Tables
Table 1: Issues and Requirements..........................................................................................................12
Table 2: Summary of Findings ................................................................................................................14
List of Figures
Figure 1: Customer Engagement Process..................................................................................................8
WBS | INTRODUCTION 5
INTRODUCTION
Business growth is mainly attributed to developing effective strategies over time; moreover a pre-requisite
to developing effective strategy is quality information. Information is of great value to modern organizations
which eventually results in creating value and improving business. The widespread use of the internet and
Web 2.0 technologies has influenced the ability of organizations to gather enough data in order to be more
efficient and effective. Online communities have experienced a significant level of growth in the past
decade due to the desire of both organizations and customers to gain valuable information for the purpose
of creating value and gaining benefits.
From a theoretical view point, online communities consist of people who interact together socially on a
technical platform. These communities are built on common problems or tasks that are pursued on the
basis of implicit and explicit codes of behavior. The technical platform enables and supports the
community’s interaction and helps to build trust and a common feeling among the members (Leimeister et
al., 2004). Online communities in practice are presented as online spaces where people or groups come
together to share knowledge or information, exchange ideas and collaborate towards achieving a specific
objectives.
As a result of rapid growth in technologies and enterprise social media platforms, organizations are very
much interested in the best way to form long term relationships with customers in gaining customer
commitment and loyalty. With online communities in mind, customer engagement is an emerging topic in
businesses today. According to Shantanu Narayen the CEO of Adobe Systems, customers are key to the
success of organization (Adobe, 2008); therefore it is necessary to understand their business and behavior.
In this sense, organizations should endeavor to involve customers in company activities such as product co-
creation and feedback on existing or new products in order to not only improve the quality of offerings but
also to satisfy the needs of customers.
The use of social media channels such as Facebook and Twitter platform has been observed to have
changed the way individuals are interacting. E-mails and telephones are constantly being identified as being
“over-whelming” in the organizational context, in this sense adopting new and improved methods would
potentially make these tools more obsolete over time.
In a highly unstable business environment, enterprises work towards earning trust, loyalty and commitment
from customers in order to develop sustainable competitive advantage. In essence, in order for companies
to develop competitive advantage in the business environment, it is important for managers to develop a
significant level of engagement with customers so as to gain valuable insights to understand customer
WBS | STUDY DESIGN 6
motives, needs and requirements. Online communities are becoming the most efficient and effective tools
contributing to the development of an interactive culture with employees and customers.
This research will be taking an organizational stand in understanding the influential factors in adopting
online communities and the challenges encountered by managers in the adoption process.
STUDY DESIGN
This study will draw from both theoretical and practice grounds by analyzing data from four cases of virtual
community adoption in businesses with the aim of identifying the key factors influencing managerial
decisions. Interview based research data is then analyzed with theories to back-up information provided in
this study. In each case, semi-structured interviews were conducted alongside observations of the case
community – Yammer Enterprise Social Network (ESN) - in order to gain a more in-depth insight of the
mode of operation and user activities within the community. A brief anonymous background of the case
companies will be provided further on in this report. Considering technology adoption is accompanied by
several challenges, the study will further go on to highlight various challenges encountered in the process of
adopting virtual customer engagement strategy in businesses.
ONLINE COMMUNITIES
The careful assessment of online communities and customer engagement as separate entities is relevant to
the operation of modern organizations. Online communities are primarily used to bring people together
online for interaction and knowledge sharing purposes. Online communities refer to “a group of people who
interact together socially on a technical platform. The technical platform enables and supports the
community’s interaction and helps to build trust and a common feeling among the members” (Leimeister et
al., 2004). From this definition, it is evident that communities are made up of two or more parties
interacting or sharing some form of knowledge virtually toward a specific goal. An example is the Yammer
Research Network Community. The community consists of students, Yammer employees and practitioners
working together in developing new ways or methods of enhancing online interactivity.
Research shows that online communities differ in terms of their orientation and audience. Online
communities can thereby be grouped into four main categories:
1. Transaction-oriented communities: these are primarily e-commerce websites such as eBay and
craigslist set up to bring buyers and sellers together to exchange goods online.
WBS | CUSTOMER ENGAGEMENT 7
2. Interest oriented communities are more involved with bringing users with mutual interests into one
virtual space. For example, a course forum online where student share and participate in
discussions
3. Relationship-oriented communities are more concerned about the security of the information they
provided, although there is a great deal of transparency in sharing personal data such as phone
numbers and contact info.
4. Finally, Fantasy oriented communities are mostly virtual worlds such as Second Life and World of
Warcraft. These communities involve more of virtual role playing rather than real-life situations
compared to other categories of communities.
Online communities that are most common to organizations with the aim of connecting and building
relationships can be identified as a mix of both the relationship and interest type oriented communities.
Due to the role and level of importance of customer engagement, online communities adopted are very
goal based toward information sharing with the development of long-lasting commitment and loyalty from
customers.
CUSTOMER ENGAGEMENT
Viewing engagement from a strategic perspective, “it refers to experience creation that allows companies to
build deeper, more meaningful and sustainable interactions between the company and its customers or
external stakeholders”(EIU, 2007). Considering we are taking a customer centric focus, managers in the
industry endeavor to introduce the most effective and user-friendly platform for customers and their
employees to interact.
Considering customer engagement from an organizational perspective, employees are also key stakeholders
in the process of engagement. In order for customers to be engaged, employees have the key responsibility
to develop value-adding dialogues with customers, and providing relevant content within the community.
For example, answering questions on products issues and providing support in real time. Customer
engagement can be defined as “the creation of deep connections with customers that drive purchase
decisions, interaction, and participation over time” (Forrester Consulting, 2008). Hence, it can be deduced
that customer engagement highlights the importance of connection, participation and interaction over a
period of time.
Based on theoretical study, these entities are important towards the adoption of virtual community based
engagement in organizations. Brodie’s model (Figure 1) on customer engagement depicts a systematic view
of online customer engagement in organizations by identifying key process, triggers and values of adopting
WBS | CUSTOMER ENGAGEMENT 8
this strategy (Brodie et al., 2013). There are several factors influencing the decision to adopt online
communities and so are challenges present in adoption of online communities. In order to successfully
highlight these factors, four companies were involved in this research including the Yammer research
network which was also used as a case community for this study. Emphasizing more on the context of
virtual community adoption, we would be assessing the Yammer ESN and also the companies used in this
study from the perspective of managers leading the process of adoption.
Figure 1: Customer Engagement Process
The customer engagement sub-processes depicted in the model above identify the five main interactive
processes in a typical online community including learning, sharing, advocacy, socializing and co-developing.
Customer engagement is induced by the will to acquire cognitive competencies through learning in an
organization or customer based context. Sharing is a key element in the customer engagement sub process
due to the will of online community members to gain access to relevant information, knowledge and
expertise of other members of the community.
The advocacy sub-process is referred to as an expression of customer engagement. Advocacy occurs when
customers recommend the company’s brand, products or services to other individuals or businesses. Online
communities are constantly being developed to encourage a social and interactive culture between
WBS | CASE ORGANIZATIONS 9
employees and customers. Moreover, the concept of socializing involves two-way non-functional
interactions between company personnel and customers. Developing a social relationship with customers
contributes significantly to long term commitment and loyalty. Finally, the process of co-development
dictates the point where customers can contribute to the development of product and service offerings of
the firm. In the adoption of online communities, these processes are vital towards achieving the positive
value derived from customer engagement in organizations.
Based on the model, we can identify several consequences of customer engagement to businesses.
Moreover, developing customer relationships and engaging customers in knowledge sharing and co-
development eventually earns customer satisfaction, loyalty, trust and commitment. Customers feel more
empowered and connected when businesses value their feedback and engage them in various product or
service creations. The outcomes depicted by Brodie et al. (2013) are in line with the customer engagement
cycle stipulated by Sashi (2009). It is therefore clear that the key outcomes of successful process of
customer engagement include customer loyalty, satisfaction, empowerment, connection and emotional
bonds and, finally customer trust and commitment.
CASE ORGANIZATIONS
The companies used in this research were ranged between product-based organizations and service based
organizations. The Yammer Community was also used as a case company to gain more insight into the
concept of customer engagement. We look briefly into the background of each of these companies to better
understand their business and the need for an interactive culture.
Case community – Yammer ESN
ESN is referred to as the application of technologies that have emerged on the public internet within
organizations as a way of facilitating workplace communication and collaboration(Riemer and Richter,
2012). ESNs can be regarded as an online community following earlier stated definition stating the
convergence of people in one single virtual space. ESN capabilities have developed since its emergence;
however organizations have not only adopted them in their workplaces but with clients and customers
located across the world.
The Yammer ESN offers a social platform of communication, collaboration and innovation in modern
organizations. The platform offers a friendly user interface making it easy for users to easily navigate
through the website for information purposes and subscribing for the various service plans offered. The
network offers four main service plans to firms including the basic network, enterprise network, Yammer
+SharePoint online, Yammer + Office 365 network.
WBS | CASE ORGANIZATIONS 10
Yammer Background
The network was developed by David Sacks and Adam Pisoni in September 2008. Yammer ESN network
brings people together, conversations, content and business data in a single virtual location(Yammer, 2013).
Within the past few years, Yammer has experience a significant growth rate with over 7 million users as at
August, 2013. The various users of the network range from students who use it to collaborate in groups to
product and service based organizations that use it for employee and customer engagement.
In 2008, Microsoft acquired Yammer based on its potential to create a social workplace. Since the
acquisition, more companies have begun to embrace the idea of a social workplace. As at the fourth
quarter, Yammer added a record of 290 newly paying customers which ranged professional service firms,
health care, retail and financial institutions(Microsoft, 2013). Yammer now offers great functions as in can
be integrated with Microsoft tools like SharePoint and Office 365 for a reasonable price per user.
Company B Background– Manufacturing Company
Company B established in 1992 is a food manufacturer and distributor of hors d’oeuvres products in the
U.S.A. The company sells its own line of products in addition to 3rd
party products to chefs and caterers in
country clubs, hotels, and function halls. Logistics and transportation is handled from the distribution
centers of the company located in Boston, New York, Philadelphia, Washington DC, and Orlando. The
company boasts of a 38,000 square feet warehouse in the Great Boston Area alone with an approximate
base of 3,350 customers nationally.
Company B produces its own private label and possesses a line of hors d’oeuvres for retail chains such as
Costco, BJ, Safeway and regional supermarkets in the US. In addition to its current business, the company
sells manufactured products to other distributors such as SYSCO and US Foodservice for resale to retail
chains and final consumers. In a nutshell, the company caters for a varied customer base requiring
diversified methods ways of interaction and information delivery.
Company C Background – Home Theatre Installation Service Company
Company C is a technology based firm established in 2008, located on the outskirts of Oklahoma City in the
U.S.A. The company’s goal is to introduce smart technologies that fits the lives of its clients and eases their
daily routine. The company practically offers services such as automation of home theatres in high end
homes that range from integrating security systems, HVC, audio and video surveillance. “We take care of
the customer’s home network”- IT Manager, Company C. The company primarily deals with client
residences; however they work with other partners such as home architects, the builders and the
homeowner to provide the best technology to fit their respective demands and lifestyles.
WBS | Research Findings 11
Before the adoption of the Yammer ESN, the company used e-mails, telephone and traditional methods of
contact to engage customers and give progress reports on projects on a daily basis. In the past, customers
could only contact customer service or employees via email, text messages or scheduling face-to-face
meeting in the organization.
Company D Background – Solutions Consultancy Company
Company D is a software development and consultancy house that works currently for the oil and gas
industry but has applications in the wider hazards industry. The company primarily focuses on risk
management, access integrity and control of work. The firm was established in 1989 by its current CEO, with
the vision to keep people safe in hazardous industries. The company thereby provides solutions to help its
customers transform their frontline operations. The company is reputable for its award winning world class
solutions that are used by over 50,000 users in over 350 sites across 22 countries.
Customer value creation and ROI goals are valuable factors contributing to the success of the company. The
firm helps to minimize the risks taken on board by their customers working towards achieving higher
efficiency in risky industries. Traditional customer engagement processes were historically adopted within
the organization were customers contact staff by phone or email whenever they require some form of
support or solutions.
Research Findings
In conducting the interviews for this research, common themes were observed for the purpose of creating
an in-depth insight into understanding the organization view of customer engagement in virtual
communities. Table 1 showcases a summary of the key issues from individual managerial perspectives
before introducing virtual communities, thereby bringing together common issues faced by businesses.
Table 1: Issues and Requirements
PROBLEMS AND REQUIRMENTS - KEY FINDINGS
o Overwhelming inflow of E-mails and phones calls daily
o Bottlenecks in providing customer support
o Information sharing issues for example: large file sharing
o Need for Expert Support
o Inactive old and existing systems
WBS | FACTORS INFLUENCING ADOPTION 12
Firstly, managers highlighted the issues of mass inflow of e-mails and phone calls which end up not getting
addressed in time. Employees end up addressing the same problems multiple times with different
customers due to giving individual responses to customers through e-mail. As a result, executives found this
rather inefficient and ineffective in delivering information to customers and keeping them satisfied.
Due to the mass inflow of emails, firms face a substantial level of holdups in providing support and
information to customers. “Sometimes when customers call into the organization, the right expert might
not be available to attend to their questions”, one of the managers recalled. Product companies are known
to share package pictures with customers. Although, e-mail will have been the most obvious option, these
files are rather too large to be attached in e-mails and there is skepticism about the security and privacy of
file sharing platforms on the internet.
Intranet systems and E-commerce sites proved to be inefficient and disengaging in organizations. Managers
talked about cases of inactivity and lack of participation by employees and customers due to the strict
formal interface and the rigidity of systems. In a nutshell, organizations required a cost-effective and
engaging system equipped with the tools to improve business operations. The findings further goes on to
discuss a of summary key factors influencing the introduction of Online communities for customer
engagement and the common challenges faced by executives in the process of adoption.
FACTORS INFLUENCING ADOPTION
Executives regard the introduction of online communities for communication or collaborative purposes as a
major step in any organization. Therefore, it is important for to plan and put in a great of thought before
deciding to introduce new technologies. Findings show that organizations constantly face a major problem
in communicating and engaging their customers’ at the most appropriate time. The use of E-mails, phone
calls and text messages are becoming highly overwhelming leading to bottlenecks in providing support or
necessary information. Furthermore, executives are seeing the value behind social Virtual Community
adoption and are influenced by key factors and features of some of these communities. Based on the key
findings from thematic analysis, influential factors were categorized into 4 main groups:
 Functional-Based Factors: The conversation element, file sharing tool, real-time and multi-user
notes editing are major features influencing executives in the decision to introduce virtual
communities. Tools on the Yammer ESN such as status updates, notes and file sharing features are
important to facilitating customer collaboration and engagement. In addition, the integrative
capability of online communities with already existing systems is an added advantage for further
scalability and expansion in firms. Executives are very excited with the introduction of “on the
WBS | FACTORS INFLUENCING ADOPTION 13
move” accessibility to content, members and information in the community e.g. The Yammer App
available on apple and android devices. Various features available on current online communities
are very similar to popular social networks; for instance the attribution of Yammer ESN to Facebook
and Twitter networks. In implementing such communities, managers encourage major stakeholders
to enjoy the experience of sharing information, facilitate flexibility and at the same time contribute
to the knowledge repository of the organization.
 Customer-Induced Factors: Engagement has been identified as key to success in organizations.
Managers’ interest in achieving customer satisfaction drives the need to engage customers in
improving the quality of existing and new products. Customer loyalty one of the customers induced
factors that influence the adoption of engagement strategies in organizations.
Organizations work towards gaining customer loyalty for their brands with the goal of increasing
sales and profitability through the sense of advocacy and commitment developed through
facilitating the key customer engagement sub-processes depicted in Figure 1. From analysis of the
previously discussed findings, we can easily conclude that online customer engagement is adopted
in order to develop a better understanding of both new and existing customers towards creating
the best and the most cost-effective strategy to meet their needs.
 Cultural-Based Factors: Organizations adopt online communities not only to develop a sense of
team work and collaboration among employees but also to develop an interactive and knowledge
sharing culture with customers. This is towards developing a competitive edge by drawing from the
collective knowledge of both customers and employees; in addition to dissolving knowledge
boundaries between departments in the organization and customers. Knowledge and Information
sharing plays a key role in the success of the organization, and managers are willing to invest in
technologies that will facilitate sharing and collaborative environment in the organization. An
example is the Yammer ESN which has gained reputation a significant As a result encouraging inter-
departmental communication and firm-customer interactions.
 Value-adding Factors: Based on the findings of this study, the overall factor influencing firms in
adopting online community customer engagement is its potential to create value for the
organization and its customers. Online communities are viewed to have the features and the
technical prowess to create an interactive and collaborative relationship between firms and
customers. Values derived from successful implementation of virtual customer engagement
communities include improved quality of products due to co-production, increase in sales, customer
satisfaction, competitive advantage and overall business development.
WBS | CHALLENGES ENCOUNTERED IN THE PROCESS OF ADOPTION 14
In summarizing the findings of this study, Table 2 checks out the factors influencing adoption in the four
case organizations:
Table 2: Summary of Findings
Factors Yammer Company B Company C Company D
Functional-Based
Factor
Customer-Induced
Factors
Cultural-Based
Factors
Value-adding
Factors
In summary, executives are very much interested in the value- added advantages accompanied with virtual
communities, ease of creating an interactive culture and the additional customer value, and relationship
they can earn through these communities. Although, the values are enormous managers still face several
challenges in the process of introducing the practice of online community engagement within employees
and customers.
CHALLENGES ENCOUNTERED IN THE PROCESS OF ADOPTION
Dealing with human behavior and the adoption of new technologies in organizations, there’s bound to be
some form reaction towards new methods of operation and communication. Understanding the major
challenges behind online communities would help managers develop the best strategy towards adopting
online communities.
Engaging Customers
Gaining the interest of customers to participate in online customers is a major challenge for managers in
organizations. First, the vital process and a major challenge in the implementation of online communities is
the point of actually engaging customers and encouraging participation. As detailed in the previous chapter,
some customers are not willing to engage online. So organizations are faced with the need to urge them to
connect, encourage their participation and engage them in discussions.
WBS | POTENTIAL VALUE IN ADOPTING ONLINE COMMUNITIES 15
The more managers are able to influence engagement in employees and customers, the more the potential
to gain value and sustainable competitive advantage. However, using a social platform with similar interface
with Facebook and twitter would eventually bring around. Based on theoretical background, customers are
usually motivated by the value behind their participation. It is therefore important for executives to
communicate the value of engagement to customers and employees in order to encourage adoption.
User Resistance
Resistance is also a key challenge in the adoption of online communities for customer engagement.
Research show that managers are faced with cases where key stakeholders of the community are not willing
to contribute or adopt the online community practice. This is mostly due to age and exposure in line with
the stipulations of company managers.
Employees most times are against the adoption of new technology because of the need to learn new
operations or adjust to change. Since stakeholder participation is a critical factor to the success of online
communities, it is necessary for managers to encourage employees and customer interaction in order to
create business value and customer satisfaction. Theoretical and practice grounds dictate stakeholder
resistance could lead to lack of participation and contribution. As a result online communities could be
rendered obsolete.
POTENTIAL VALUE IN ADOPTING ONLINE COMMUNITIES
Although managers encounter challenges in the process of adoption, theoretical and practice however show
the value adding opportunities of online customer engagement through virtual communities. Referring back
to the customer engagement model in Figure 1 and interview data provided by managers involved in the
process of adoption it is evident that online communities would contribute significantly to gaining overall
competitive advantage and long-term relationships with customers.
With the adoption of virtual communities, organizations are able to earn the sense of loyalty, commitment
and trust among their customers. Constant communication and dialogue through these communities
influences the loyalty of customers to the offerings of the firm. Based on research findings, loyal customers
are willing to be advocates of the company. More loyal customers will want to recommend the company to
other people. Recommendations from customers will not only save cost of marketing, it will end up
increasing the customer base of the organization and also contributing to the overall business development
of the firm. Furthermore, trust is also a key potential value for customer engagement using virtual
communities.
WBS | RECOMMENDATION AND CONCLUSION 16
Although customer trust is earned overtime, it is a vital element to surviving in a highly competitive market.
Based on theoretical review of existing literatures, customer trust is very powerful. Online communities
potentially help organizations earn a sense of trust amongst their customers through involvement in
feedback discussions and quality product delivery. Hence, the consistency in the delivery and quality of
products or services to customers is necessary in earning the trust. Furthermore, engagement through
online communities has been observed to help firms in getting to know their customers better in an aim to
develop effective strategies to satisfy their various needs. In essence, consistent customer satisfaction
eventually results in developing a sense of trust among customers.
Managers and practitioners have acknowledged the significance of organization knowledge in contributing
to competitive intelligence and advantage in an unstable economy. Online communities are of significance
in facilitating knowledge sharing within organizations and external parties including customers and project
consultants. With technical tools and licenses such as Yammer + SharePoint, employees can share
knowledge with colleagues, customers, project consultants and vice versa. The knowledge sharing
capabilities in this further help to update both employees and customers with recent activities; in addition
to facilitating organization wide learning.
In summary, the value-added advantages of online communities are the main factors influencing its
adoption in organizations today. However, it is necessary for managers to understand the key challenges in
order to develop standardized strategies in implementation and sustainability of these communities both
internally and externally.
WBS | RECOMMENDATION AND CONCLUSION 17
RECOMMENDATION AND CONCLUSION
Drawing from theoretical and practical grounds, it is evident that managers are constantly faced with issues
of communication, sharing and collaboration both internally with employees and externally with customers
or consultants. With the emergence of enterprise social networks such as Yammer, technical tools are now
available to dissolve the issues encountered with regards to engagement, communication and collaboration.
Managers have taken a keen interest in the adoption of online communities for customer engagement
purposes. Customer participation and feedback has been identified as vital sources of competitive
advantage in competitive markets. Based on the findings of this study, for customers to be engaged in
online communities, it is imperative for employees to also participate in discussions and contribute to the
content of the community. The major influence to adopt online communities from an organizational stand-
point is the value-added advantage it provides for organizations. However, using a thematic analysis in
categorizing findings, four main factors were identified – functional based, customer-induced, cultural and
value-adding factors-based on discussions with company managers.
Furthermore, it is important for managers to have adequate knowledge of these major factors in selecting
an appropriate online community fitting the core values and business objectives of the firm. In addition,
challenges encountered in the process of adoption should be carefully addressed by managers planning to
adopt engagement online communities. Hence, knowledge of these factors and challenges will further go on
in developing effective strategies to successfully introduce online communities in business process.
WBS | REFERENCES 18
REFERENCES
ADOBE. 2008. Shantanu Narayen discusses customer engagement [Online]. Available:
http://www.adobe.com/engagement/q_and_a.html [Accessed 1 June 2013].
BRODIE, R. J., ILIC, A., JURIC, B. & HOLLEBEEK, L. 2013. Consumer engagement in a virtual brand community:
An exploratory analysis. Journal of Business Research, 66, 105-114.
ECONOMIC INTELLIGENCE UNIT, EIU 2007. Part I - Beyond loyalty: Meeting the challenge of customer
engagement. The Economist [Online]. Available: http://www.adobe.com/engagement/pdfs/partI.pdf
[Accessed 13 August 2013].
FORRESTER CONSULTING. 2008. How engaged are your customers? [Online]. Forrester Consulting. Available:
http://www.adobe.com/engagement/pdfs/Forrester_TLP_How_Engaged_Are_Your_Customers.pdf
[Accessed 15 August 2013].
LEIMEISTER, J. M., SIDIRAS, P. & KRCMAR, H. Success factors of Online Communitiesfrom the perspective of
members and operators: An empirical study. System Sciences, 2004. Proceedings of the 37th Annual Hawaii
International Conference on, 2004. IEEE, 10 pp.
MICROSOFT. 2013. Microsoft updates enterprise social road map, highlights momentum on Yammer
acquisition anniversary [Online]. Available: http://www.microsoft.com/en-
us/news/Press/2013/Jun13/06-25Yammer1YRPR.aspx 2013].
RIEMER, K. & RICHTER, A. 2012. SOCIAL-Emergent Enterprise Social Networking Use Cases: A Multi Case
Study Comparison.
SASHI, C. M. 2009. Buyer Behavior in Business Markets: A Review and Integrative Model. Journal of Global
Business Issues, 3, 129-138.
YAMMER. 2013. About Us [Online]. Available: https://about.yammer.com/who-we-are/ 2013].

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ISMI_Management Report

  • 1. A management report submitted in part fulfilment of the Degree of MSc in Information Systems Management & Innovation, University of Warwick, September 2013 MSc Information Systems Management & Innovation (ISMI) 2012-2013 Student Name: RILWAN DAMOLA ALLI ID Number: 1265304 Supervisor: Ola Henfridsson, Ph.D. Date of submission: September, 2013 Word Count: 5,092 The Adoption of Online Communities for Customer Engagement in Organizations: Factors and Challenges
  • 2. WBS | COVER 2 The Adoption of Online Communities for Customer Engagement in Organizations: Factors and Challenges Submitted by RILWAN DAMOLA ALLI Year of submission: 2013 Declaration This is to certify that the work I am submitting is my own. All external references and sources are clearly acknowledged and identified within the contents. I am aware of the University of Warwick regulation concerning plagiarism and collusion. No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done an appropriate reduction in the mark I might otherwise have received will be made. Copyright This report is protected by original copyright. COVER
  • 3. WBS | EXECUTIVE SUMMARY 3 EXECUTIVE SUMMARY The emerging trend of enterprise social networks and web online communities have made a significant contribution to the way businesses interact with both new and existing customers. Hence, the success of a firm is attributed to the level of relationship with customers and how they can engage them in the process of development and service innovation. With rapid growth of Web 2.0 technologies and social media, managers and practitioners are very much interested in understanding and developing sustainable strategies to successfully engage customers in the firm’s offerings. Online communities have gained a significant level of reputation over the past few years with the growth of internet users and the need for knowledge resources both from the organizational and customer perspective. These internet communities are viewed to bring people together and facilitate a knowledge sharing environment with the aid of social technical tools. Online communities have introduced the use of real-time communication and discussion boards to foster interactivity within employees and customers. The Yammer ESN platform for instance creates a social user friendly interface in facilitating communication and knowledge sharing among employees and external parties. As a result of potential values of Business- to-Customer (B2C) relationships, companies are increasingly adopting online communities for the main purpose of developing an internal interactive culture and engaging their customers in their business processes. In influencing their decision to adopt online communities, there are several factors including functional, cultural and other decision factors. This report discusses in detail these key factors influencing the decision of organizations to adopt online communities and the major challenges involved in the process of adopting the practice. In addition, the values and benefits associated with the successful implementation of online customer engagement practices will also be highlighted based on research and theoretical analysis. Based on interviews with managers in the field, this study will discuss the major factors influencing the decision to adopt online communities in organizations and the challenges in the adoption in relation to employee customer reactions. The implementation of new technologies is always a challenge in any organization, it is therefore vital for managers or IT practitioners to be aware of these potential threats in devising effective methods of dissolving them.
  • 4. WBS | TABLE OF CONTENTS 4 TABLE OF CONTENTS Executive Summary....................................................................................................................................... 3 Introduction.................................................................................................................................................. 4 Study Design................................................................................................................................................. 6 Online Communities ..................................................................................................................................... 6 Customer Engagement.................................................................................................................................. 7 Case Organizations ....................................................................................................................................... 9 Case community – Yammer ESN................................................................................................................ 9 Yammer Background............................................................................................................................... 10 Company B Background– Manufacturing Company................................................................................. 10 Company C Background – Home Theatre Installation Service Company................................................... 10 Company D Background – Solutions Consultancy Company..................................................................... 11 Research Findings....................................................................................................................................... 11 Factors influencing Adoption ...................................................................................................................... 12 Challenges encountered in the process of adoption.................................................................................... 14 Potential Value in adopting online communities ......................................................................................... 15 Recommendation and Conclusion............................................................................................................... 17 References.................................................................................................................................................. 18 List of Tables Table 1: Issues and Requirements..........................................................................................................12 Table 2: Summary of Findings ................................................................................................................14 List of Figures Figure 1: Customer Engagement Process..................................................................................................8
  • 5. WBS | INTRODUCTION 5 INTRODUCTION Business growth is mainly attributed to developing effective strategies over time; moreover a pre-requisite to developing effective strategy is quality information. Information is of great value to modern organizations which eventually results in creating value and improving business. The widespread use of the internet and Web 2.0 technologies has influenced the ability of organizations to gather enough data in order to be more efficient and effective. Online communities have experienced a significant level of growth in the past decade due to the desire of both organizations and customers to gain valuable information for the purpose of creating value and gaining benefits. From a theoretical view point, online communities consist of people who interact together socially on a technical platform. These communities are built on common problems or tasks that are pursued on the basis of implicit and explicit codes of behavior. The technical platform enables and supports the community’s interaction and helps to build trust and a common feeling among the members (Leimeister et al., 2004). Online communities in practice are presented as online spaces where people or groups come together to share knowledge or information, exchange ideas and collaborate towards achieving a specific objectives. As a result of rapid growth in technologies and enterprise social media platforms, organizations are very much interested in the best way to form long term relationships with customers in gaining customer commitment and loyalty. With online communities in mind, customer engagement is an emerging topic in businesses today. According to Shantanu Narayen the CEO of Adobe Systems, customers are key to the success of organization (Adobe, 2008); therefore it is necessary to understand their business and behavior. In this sense, organizations should endeavor to involve customers in company activities such as product co- creation and feedback on existing or new products in order to not only improve the quality of offerings but also to satisfy the needs of customers. The use of social media channels such as Facebook and Twitter platform has been observed to have changed the way individuals are interacting. E-mails and telephones are constantly being identified as being “over-whelming” in the organizational context, in this sense adopting new and improved methods would potentially make these tools more obsolete over time. In a highly unstable business environment, enterprises work towards earning trust, loyalty and commitment from customers in order to develop sustainable competitive advantage. In essence, in order for companies to develop competitive advantage in the business environment, it is important for managers to develop a significant level of engagement with customers so as to gain valuable insights to understand customer
  • 6. WBS | STUDY DESIGN 6 motives, needs and requirements. Online communities are becoming the most efficient and effective tools contributing to the development of an interactive culture with employees and customers. This research will be taking an organizational stand in understanding the influential factors in adopting online communities and the challenges encountered by managers in the adoption process. STUDY DESIGN This study will draw from both theoretical and practice grounds by analyzing data from four cases of virtual community adoption in businesses with the aim of identifying the key factors influencing managerial decisions. Interview based research data is then analyzed with theories to back-up information provided in this study. In each case, semi-structured interviews were conducted alongside observations of the case community – Yammer Enterprise Social Network (ESN) - in order to gain a more in-depth insight of the mode of operation and user activities within the community. A brief anonymous background of the case companies will be provided further on in this report. Considering technology adoption is accompanied by several challenges, the study will further go on to highlight various challenges encountered in the process of adopting virtual customer engagement strategy in businesses. ONLINE COMMUNITIES The careful assessment of online communities and customer engagement as separate entities is relevant to the operation of modern organizations. Online communities are primarily used to bring people together online for interaction and knowledge sharing purposes. Online communities refer to “a group of people who interact together socially on a technical platform. The technical platform enables and supports the community’s interaction and helps to build trust and a common feeling among the members” (Leimeister et al., 2004). From this definition, it is evident that communities are made up of two or more parties interacting or sharing some form of knowledge virtually toward a specific goal. An example is the Yammer Research Network Community. The community consists of students, Yammer employees and practitioners working together in developing new ways or methods of enhancing online interactivity. Research shows that online communities differ in terms of their orientation and audience. Online communities can thereby be grouped into four main categories: 1. Transaction-oriented communities: these are primarily e-commerce websites such as eBay and craigslist set up to bring buyers and sellers together to exchange goods online.
  • 7. WBS | CUSTOMER ENGAGEMENT 7 2. Interest oriented communities are more involved with bringing users with mutual interests into one virtual space. For example, a course forum online where student share and participate in discussions 3. Relationship-oriented communities are more concerned about the security of the information they provided, although there is a great deal of transparency in sharing personal data such as phone numbers and contact info. 4. Finally, Fantasy oriented communities are mostly virtual worlds such as Second Life and World of Warcraft. These communities involve more of virtual role playing rather than real-life situations compared to other categories of communities. Online communities that are most common to organizations with the aim of connecting and building relationships can be identified as a mix of both the relationship and interest type oriented communities. Due to the role and level of importance of customer engagement, online communities adopted are very goal based toward information sharing with the development of long-lasting commitment and loyalty from customers. CUSTOMER ENGAGEMENT Viewing engagement from a strategic perspective, “it refers to experience creation that allows companies to build deeper, more meaningful and sustainable interactions between the company and its customers or external stakeholders”(EIU, 2007). Considering we are taking a customer centric focus, managers in the industry endeavor to introduce the most effective and user-friendly platform for customers and their employees to interact. Considering customer engagement from an organizational perspective, employees are also key stakeholders in the process of engagement. In order for customers to be engaged, employees have the key responsibility to develop value-adding dialogues with customers, and providing relevant content within the community. For example, answering questions on products issues and providing support in real time. Customer engagement can be defined as “the creation of deep connections with customers that drive purchase decisions, interaction, and participation over time” (Forrester Consulting, 2008). Hence, it can be deduced that customer engagement highlights the importance of connection, participation and interaction over a period of time. Based on theoretical study, these entities are important towards the adoption of virtual community based engagement in organizations. Brodie’s model (Figure 1) on customer engagement depicts a systematic view of online customer engagement in organizations by identifying key process, triggers and values of adopting
  • 8. WBS | CUSTOMER ENGAGEMENT 8 this strategy (Brodie et al., 2013). There are several factors influencing the decision to adopt online communities and so are challenges present in adoption of online communities. In order to successfully highlight these factors, four companies were involved in this research including the Yammer research network which was also used as a case community for this study. Emphasizing more on the context of virtual community adoption, we would be assessing the Yammer ESN and also the companies used in this study from the perspective of managers leading the process of adoption. Figure 1: Customer Engagement Process The customer engagement sub-processes depicted in the model above identify the five main interactive processes in a typical online community including learning, sharing, advocacy, socializing and co-developing. Customer engagement is induced by the will to acquire cognitive competencies through learning in an organization or customer based context. Sharing is a key element in the customer engagement sub process due to the will of online community members to gain access to relevant information, knowledge and expertise of other members of the community. The advocacy sub-process is referred to as an expression of customer engagement. Advocacy occurs when customers recommend the company’s brand, products or services to other individuals or businesses. Online communities are constantly being developed to encourage a social and interactive culture between
  • 9. WBS | CASE ORGANIZATIONS 9 employees and customers. Moreover, the concept of socializing involves two-way non-functional interactions between company personnel and customers. Developing a social relationship with customers contributes significantly to long term commitment and loyalty. Finally, the process of co-development dictates the point where customers can contribute to the development of product and service offerings of the firm. In the adoption of online communities, these processes are vital towards achieving the positive value derived from customer engagement in organizations. Based on the model, we can identify several consequences of customer engagement to businesses. Moreover, developing customer relationships and engaging customers in knowledge sharing and co- development eventually earns customer satisfaction, loyalty, trust and commitment. Customers feel more empowered and connected when businesses value their feedback and engage them in various product or service creations. The outcomes depicted by Brodie et al. (2013) are in line with the customer engagement cycle stipulated by Sashi (2009). It is therefore clear that the key outcomes of successful process of customer engagement include customer loyalty, satisfaction, empowerment, connection and emotional bonds and, finally customer trust and commitment. CASE ORGANIZATIONS The companies used in this research were ranged between product-based organizations and service based organizations. The Yammer Community was also used as a case company to gain more insight into the concept of customer engagement. We look briefly into the background of each of these companies to better understand their business and the need for an interactive culture. Case community – Yammer ESN ESN is referred to as the application of technologies that have emerged on the public internet within organizations as a way of facilitating workplace communication and collaboration(Riemer and Richter, 2012). ESNs can be regarded as an online community following earlier stated definition stating the convergence of people in one single virtual space. ESN capabilities have developed since its emergence; however organizations have not only adopted them in their workplaces but with clients and customers located across the world. The Yammer ESN offers a social platform of communication, collaboration and innovation in modern organizations. The platform offers a friendly user interface making it easy for users to easily navigate through the website for information purposes and subscribing for the various service plans offered. The network offers four main service plans to firms including the basic network, enterprise network, Yammer +SharePoint online, Yammer + Office 365 network.
  • 10. WBS | CASE ORGANIZATIONS 10 Yammer Background The network was developed by David Sacks and Adam Pisoni in September 2008. Yammer ESN network brings people together, conversations, content and business data in a single virtual location(Yammer, 2013). Within the past few years, Yammer has experience a significant growth rate with over 7 million users as at August, 2013. The various users of the network range from students who use it to collaborate in groups to product and service based organizations that use it for employee and customer engagement. In 2008, Microsoft acquired Yammer based on its potential to create a social workplace. Since the acquisition, more companies have begun to embrace the idea of a social workplace. As at the fourth quarter, Yammer added a record of 290 newly paying customers which ranged professional service firms, health care, retail and financial institutions(Microsoft, 2013). Yammer now offers great functions as in can be integrated with Microsoft tools like SharePoint and Office 365 for a reasonable price per user. Company B Background– Manufacturing Company Company B established in 1992 is a food manufacturer and distributor of hors d’oeuvres products in the U.S.A. The company sells its own line of products in addition to 3rd party products to chefs and caterers in country clubs, hotels, and function halls. Logistics and transportation is handled from the distribution centers of the company located in Boston, New York, Philadelphia, Washington DC, and Orlando. The company boasts of a 38,000 square feet warehouse in the Great Boston Area alone with an approximate base of 3,350 customers nationally. Company B produces its own private label and possesses a line of hors d’oeuvres for retail chains such as Costco, BJ, Safeway and regional supermarkets in the US. In addition to its current business, the company sells manufactured products to other distributors such as SYSCO and US Foodservice for resale to retail chains and final consumers. In a nutshell, the company caters for a varied customer base requiring diversified methods ways of interaction and information delivery. Company C Background – Home Theatre Installation Service Company Company C is a technology based firm established in 2008, located on the outskirts of Oklahoma City in the U.S.A. The company’s goal is to introduce smart technologies that fits the lives of its clients and eases their daily routine. The company practically offers services such as automation of home theatres in high end homes that range from integrating security systems, HVC, audio and video surveillance. “We take care of the customer’s home network”- IT Manager, Company C. The company primarily deals with client residences; however they work with other partners such as home architects, the builders and the homeowner to provide the best technology to fit their respective demands and lifestyles.
  • 11. WBS | Research Findings 11 Before the adoption of the Yammer ESN, the company used e-mails, telephone and traditional methods of contact to engage customers and give progress reports on projects on a daily basis. In the past, customers could only contact customer service or employees via email, text messages or scheduling face-to-face meeting in the organization. Company D Background – Solutions Consultancy Company Company D is a software development and consultancy house that works currently for the oil and gas industry but has applications in the wider hazards industry. The company primarily focuses on risk management, access integrity and control of work. The firm was established in 1989 by its current CEO, with the vision to keep people safe in hazardous industries. The company thereby provides solutions to help its customers transform their frontline operations. The company is reputable for its award winning world class solutions that are used by over 50,000 users in over 350 sites across 22 countries. Customer value creation and ROI goals are valuable factors contributing to the success of the company. The firm helps to minimize the risks taken on board by their customers working towards achieving higher efficiency in risky industries. Traditional customer engagement processes were historically adopted within the organization were customers contact staff by phone or email whenever they require some form of support or solutions. Research Findings In conducting the interviews for this research, common themes were observed for the purpose of creating an in-depth insight into understanding the organization view of customer engagement in virtual communities. Table 1 showcases a summary of the key issues from individual managerial perspectives before introducing virtual communities, thereby bringing together common issues faced by businesses. Table 1: Issues and Requirements PROBLEMS AND REQUIRMENTS - KEY FINDINGS o Overwhelming inflow of E-mails and phones calls daily o Bottlenecks in providing customer support o Information sharing issues for example: large file sharing o Need for Expert Support o Inactive old and existing systems
  • 12. WBS | FACTORS INFLUENCING ADOPTION 12 Firstly, managers highlighted the issues of mass inflow of e-mails and phone calls which end up not getting addressed in time. Employees end up addressing the same problems multiple times with different customers due to giving individual responses to customers through e-mail. As a result, executives found this rather inefficient and ineffective in delivering information to customers and keeping them satisfied. Due to the mass inflow of emails, firms face a substantial level of holdups in providing support and information to customers. “Sometimes when customers call into the organization, the right expert might not be available to attend to their questions”, one of the managers recalled. Product companies are known to share package pictures with customers. Although, e-mail will have been the most obvious option, these files are rather too large to be attached in e-mails and there is skepticism about the security and privacy of file sharing platforms on the internet. Intranet systems and E-commerce sites proved to be inefficient and disengaging in organizations. Managers talked about cases of inactivity and lack of participation by employees and customers due to the strict formal interface and the rigidity of systems. In a nutshell, organizations required a cost-effective and engaging system equipped with the tools to improve business operations. The findings further goes on to discuss a of summary key factors influencing the introduction of Online communities for customer engagement and the common challenges faced by executives in the process of adoption. FACTORS INFLUENCING ADOPTION Executives regard the introduction of online communities for communication or collaborative purposes as a major step in any organization. Therefore, it is important for to plan and put in a great of thought before deciding to introduce new technologies. Findings show that organizations constantly face a major problem in communicating and engaging their customers’ at the most appropriate time. The use of E-mails, phone calls and text messages are becoming highly overwhelming leading to bottlenecks in providing support or necessary information. Furthermore, executives are seeing the value behind social Virtual Community adoption and are influenced by key factors and features of some of these communities. Based on the key findings from thematic analysis, influential factors were categorized into 4 main groups:  Functional-Based Factors: The conversation element, file sharing tool, real-time and multi-user notes editing are major features influencing executives in the decision to introduce virtual communities. Tools on the Yammer ESN such as status updates, notes and file sharing features are important to facilitating customer collaboration and engagement. In addition, the integrative capability of online communities with already existing systems is an added advantage for further scalability and expansion in firms. Executives are very excited with the introduction of “on the
  • 13. WBS | FACTORS INFLUENCING ADOPTION 13 move” accessibility to content, members and information in the community e.g. The Yammer App available on apple and android devices. Various features available on current online communities are very similar to popular social networks; for instance the attribution of Yammer ESN to Facebook and Twitter networks. In implementing such communities, managers encourage major stakeholders to enjoy the experience of sharing information, facilitate flexibility and at the same time contribute to the knowledge repository of the organization.  Customer-Induced Factors: Engagement has been identified as key to success in organizations. Managers’ interest in achieving customer satisfaction drives the need to engage customers in improving the quality of existing and new products. Customer loyalty one of the customers induced factors that influence the adoption of engagement strategies in organizations. Organizations work towards gaining customer loyalty for their brands with the goal of increasing sales and profitability through the sense of advocacy and commitment developed through facilitating the key customer engagement sub-processes depicted in Figure 1. From analysis of the previously discussed findings, we can easily conclude that online customer engagement is adopted in order to develop a better understanding of both new and existing customers towards creating the best and the most cost-effective strategy to meet their needs.  Cultural-Based Factors: Organizations adopt online communities not only to develop a sense of team work and collaboration among employees but also to develop an interactive and knowledge sharing culture with customers. This is towards developing a competitive edge by drawing from the collective knowledge of both customers and employees; in addition to dissolving knowledge boundaries between departments in the organization and customers. Knowledge and Information sharing plays a key role in the success of the organization, and managers are willing to invest in technologies that will facilitate sharing and collaborative environment in the organization. An example is the Yammer ESN which has gained reputation a significant As a result encouraging inter- departmental communication and firm-customer interactions.  Value-adding Factors: Based on the findings of this study, the overall factor influencing firms in adopting online community customer engagement is its potential to create value for the organization and its customers. Online communities are viewed to have the features and the technical prowess to create an interactive and collaborative relationship between firms and customers. Values derived from successful implementation of virtual customer engagement communities include improved quality of products due to co-production, increase in sales, customer satisfaction, competitive advantage and overall business development.
  • 14. WBS | CHALLENGES ENCOUNTERED IN THE PROCESS OF ADOPTION 14 In summarizing the findings of this study, Table 2 checks out the factors influencing adoption in the four case organizations: Table 2: Summary of Findings Factors Yammer Company B Company C Company D Functional-Based Factor Customer-Induced Factors Cultural-Based Factors Value-adding Factors In summary, executives are very much interested in the value- added advantages accompanied with virtual communities, ease of creating an interactive culture and the additional customer value, and relationship they can earn through these communities. Although, the values are enormous managers still face several challenges in the process of introducing the practice of online community engagement within employees and customers. CHALLENGES ENCOUNTERED IN THE PROCESS OF ADOPTION Dealing with human behavior and the adoption of new technologies in organizations, there’s bound to be some form reaction towards new methods of operation and communication. Understanding the major challenges behind online communities would help managers develop the best strategy towards adopting online communities. Engaging Customers Gaining the interest of customers to participate in online customers is a major challenge for managers in organizations. First, the vital process and a major challenge in the implementation of online communities is the point of actually engaging customers and encouraging participation. As detailed in the previous chapter, some customers are not willing to engage online. So organizations are faced with the need to urge them to connect, encourage their participation and engage them in discussions.
  • 15. WBS | POTENTIAL VALUE IN ADOPTING ONLINE COMMUNITIES 15 The more managers are able to influence engagement in employees and customers, the more the potential to gain value and sustainable competitive advantage. However, using a social platform with similar interface with Facebook and twitter would eventually bring around. Based on theoretical background, customers are usually motivated by the value behind their participation. It is therefore important for executives to communicate the value of engagement to customers and employees in order to encourage adoption. User Resistance Resistance is also a key challenge in the adoption of online communities for customer engagement. Research show that managers are faced with cases where key stakeholders of the community are not willing to contribute or adopt the online community practice. This is mostly due to age and exposure in line with the stipulations of company managers. Employees most times are against the adoption of new technology because of the need to learn new operations or adjust to change. Since stakeholder participation is a critical factor to the success of online communities, it is necessary for managers to encourage employees and customer interaction in order to create business value and customer satisfaction. Theoretical and practice grounds dictate stakeholder resistance could lead to lack of participation and contribution. As a result online communities could be rendered obsolete. POTENTIAL VALUE IN ADOPTING ONLINE COMMUNITIES Although managers encounter challenges in the process of adoption, theoretical and practice however show the value adding opportunities of online customer engagement through virtual communities. Referring back to the customer engagement model in Figure 1 and interview data provided by managers involved in the process of adoption it is evident that online communities would contribute significantly to gaining overall competitive advantage and long-term relationships with customers. With the adoption of virtual communities, organizations are able to earn the sense of loyalty, commitment and trust among their customers. Constant communication and dialogue through these communities influences the loyalty of customers to the offerings of the firm. Based on research findings, loyal customers are willing to be advocates of the company. More loyal customers will want to recommend the company to other people. Recommendations from customers will not only save cost of marketing, it will end up increasing the customer base of the organization and also contributing to the overall business development of the firm. Furthermore, trust is also a key potential value for customer engagement using virtual communities.
  • 16. WBS | RECOMMENDATION AND CONCLUSION 16 Although customer trust is earned overtime, it is a vital element to surviving in a highly competitive market. Based on theoretical review of existing literatures, customer trust is very powerful. Online communities potentially help organizations earn a sense of trust amongst their customers through involvement in feedback discussions and quality product delivery. Hence, the consistency in the delivery and quality of products or services to customers is necessary in earning the trust. Furthermore, engagement through online communities has been observed to help firms in getting to know their customers better in an aim to develop effective strategies to satisfy their various needs. In essence, consistent customer satisfaction eventually results in developing a sense of trust among customers. Managers and practitioners have acknowledged the significance of organization knowledge in contributing to competitive intelligence and advantage in an unstable economy. Online communities are of significance in facilitating knowledge sharing within organizations and external parties including customers and project consultants. With technical tools and licenses such as Yammer + SharePoint, employees can share knowledge with colleagues, customers, project consultants and vice versa. The knowledge sharing capabilities in this further help to update both employees and customers with recent activities; in addition to facilitating organization wide learning. In summary, the value-added advantages of online communities are the main factors influencing its adoption in organizations today. However, it is necessary for managers to understand the key challenges in order to develop standardized strategies in implementation and sustainability of these communities both internally and externally.
  • 17. WBS | RECOMMENDATION AND CONCLUSION 17 RECOMMENDATION AND CONCLUSION Drawing from theoretical and practical grounds, it is evident that managers are constantly faced with issues of communication, sharing and collaboration both internally with employees and externally with customers or consultants. With the emergence of enterprise social networks such as Yammer, technical tools are now available to dissolve the issues encountered with regards to engagement, communication and collaboration. Managers have taken a keen interest in the adoption of online communities for customer engagement purposes. Customer participation and feedback has been identified as vital sources of competitive advantage in competitive markets. Based on the findings of this study, for customers to be engaged in online communities, it is imperative for employees to also participate in discussions and contribute to the content of the community. The major influence to adopt online communities from an organizational stand- point is the value-added advantage it provides for organizations. However, using a thematic analysis in categorizing findings, four main factors were identified – functional based, customer-induced, cultural and value-adding factors-based on discussions with company managers. Furthermore, it is important for managers to have adequate knowledge of these major factors in selecting an appropriate online community fitting the core values and business objectives of the firm. In addition, challenges encountered in the process of adoption should be carefully addressed by managers planning to adopt engagement online communities. Hence, knowledge of these factors and challenges will further go on in developing effective strategies to successfully introduce online communities in business process.
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