Business opportunities: Social Media

Transcription

1 Business opportunities: Social Media July 2013

2 Contents 1. Introduction 3 2. What are Enterprise Social Media? 4 3. Social Media Adoption 5 4. Drivers and Barriers 8 5. Opportunities for Digital Entrepreneurship Supply side Business opportunities Demand-Side Business opportunities: Functions and Horizontal Business Processes Demand-Side Business opportunities: Operations and Vertical Specific Business Processes 17 2

3 1. Introduction Novel digital technologies (particularly Social, Cloud, Mobile and Big Data) are transforming the ICT industry and the way companies across all vertical markets can operate. They create new business opportunities for digital entrepreneurship both on the supply-side (to launch new services and/or establish new businesses) and on the demand-side (to optimize operations, reduce costs, improve services and/or launch new services along companies' horizontal business processes and vertical specific ones). This report focuses on Social Media. It assesses current adoption, plans of adoption, and drivers and barriers, and identifies business opportunities that EU companies can leverage by relying on social media.. Focus of the analysis is on the potential for new business value creation, driven by new or higher revenue, faster go-to-market, enhanced services, reduced costs, increased productivity or competitiveness. New opportunities are described as well as functional related ones, impacting R&D, production and operations, sales and marketing, customer support, financial and administrative functions. Industry specific opportunities are also identified. While the focus of the report is on raising awareness of the potential opportunities related to novel digital technologies, it should be stressed that these of course depend on their appropriateness for specific enterprises, the quality of their actual execution as well as the market and enterprise context. In short, opportunities always entail risks and barriers, which should be very carefully considered by enterprise managers, directors and shareholders. The analysis is part of a series of reports which assess the impact and business opportunities of other key novel digital technologies: mobile, Big Data and Analytics and the cloud. 3

4 2. What are Enterprise Social Media? Enterprise social media describes companies' reliance on social media tools for business purpose. These tools may include social networks (e.g. Facebook, Linkedin, etc.), microblogging (e.g. Twitter), blogs, internal wikis and/or other enterprise collaborative social software. Social media enables new ways to communicate, interact and work with partners, customers/potential customers and other individuals outside the organization, as well as facilitate collaboration and knowledge sharing within the organization. 4

5 3. Social Media Adoption The social Web is changing the way people interact and businesses in Europe are increasingly looking at social media projects to grasp the opportunities that this new way of interaction can bring. In fact, IDC surveyed end-user trends for what concerns the use of social media for the last three years and found that familiarity with the use of social media as a business tool has grown steadily over the years, reaching critical mass across companies of all sizes and industries. Moreover, this increase in awareness translated in turn into growing maturity from an adoption perspective, which also progressed steadily over the years. If on average in % of business sector enterprises in Europe with more than 10 employees adopted some kind of social media tool for business purposes, survey results also show that up to today uptake has been more marked in large enterprises (LEs) as opposed to SMEs (41.9% and 28.1% respectively Figure 1). Moreover underlying data suggests that within large enterprises adoption is higher in those companies that have more than 1000 employees, followed by those that have between 500 and 999 employees, while in SMEs it is the larger sized segments that currently count on higher adoption of social media tools for business purposes. Nonetheless, several market forces are driving stronger demand of social media tools in the next years, and indeed all indications point to progressive growth of social media in enterprises of all sizes, including SMEs. Undoubtedly there is wide heterogeneity in the maturity level of social media tools, not only from a class size perspective, but also from a sector perspective. Looking at Figure 1 we can define the different attitudes to adoption of social media for business purposes. In particular: there is a strong positive correlation between company size and adoption; not only large enterprises with more than 250 employees already have higher adoption levels, they also reveal higher plans to move forward in the near future driven by particularly high plans among midmarket companies. By the end of 2014 close to 65% of large European enterprises in the business sector will have adopted social media tools for business purposes, with projected adoption for European SMEs of just under one in two. This is reflected also on maturity levels by vertical. Generally speaking, sectors with a higher relevance of larger companies such as telecom and oil and gas processing count on higher adoption and/or higher propensity to invest in social media by the end of More in detail, we can see that: Telecom companies are at the forefront of adoption, with especially high reliance on social media among wireless providers. Considering that the telecommunications sector is characterized by high "social sophistication", new deployments will be less marked with most 5

6 activity expected to entail a review and integration of existing tools. Even so, Figure 1 confirms that telecommunications are expected to remain at the forefront of social media adoption for business purposes in the near term. Media companies also reveal higher current maturity and are expected to move fast in their uptake of social media tools. Starting from a current adoption rate of just under one in two companies, by 2014 year-end more than three out of five media companies are expected to rely on some kind of social media tool. The distribution, hotels and restaurants sector is another sector where current adoption of social media is higher than average and with plans to 3Q14 that are broadly aligned to market average, the sector is anticipated to remain among the most mature markets in the near future. Within this sector, retailers reveal a particularly higher than average maturity with respect to social media owing in particular to large retailers in the food and apparel spaces. Oil and gas processing enterprises also emerge as being ahead of adoption and will continue to move forward at a faster than average pace; by 3Q14 just under 67% of companies in this sector are likely to rely on social media tools for business purposes. Uptake of social media among European utilities has been to some extent lower than in other sectors and current adoption rates fall below the overall European business sector market average. Nonetheless, there is significant variation within this sector. So far, adoption is highest in both the electricity and gas segments, while water companies lag significantly behind. Nonetheless, on average plans to move forward by electricity and gas enterprises joint to significantly high plans among water companies in the next couple of years confirm growing commitment to using social media in utilities with adoption anticipated to move faster than average over the next year. Within the professional services sector, the IT services sector is ahead of adoption while in most of the remaining segments of this sector adoption rates are slightly below the EU average. Survey data also shows that the professional services industry - in which SMEs are large component is characterized by lower than average propensity to catch up. Despite counting some of the most innovative uses of social media tools for business purposes, transport and storage companies are generally speaking untapped owing to the rather hybrid nature of the sector itself in which we see fewer logistics companies having embarked in the social media revolution, while other segments such as airline transportation make more extensive use of social media and count some interesting and innovative initiatives and projects in place. Financial services, owing partially to the effect that the crisis had on the willingness to move on with the more discretionary IT projects combined to the fact that many financial institutions still view their social media strategy as an extension of their traditional channel marketing strategies, still lag behind current adoption. However, figure 1 also shows that companies in this sector will be moving fast in adoption with the installed base expected to more than double by 3Q14. Within manufacturing the picture is rather scattered. So far, adoption overall is lower than in other sectors as most manufacturers still perceive that social media is of low value for the very nature of their business, erroneously identified as being driven by one to one relationships. Nonetheless, we can see that there is a wide heterogeneity from a segment level. Computer 6

7 and electronics, automotive & aerospace, and specific segments within the remaining manufacturing segments (for example, brand oriented manufacturers in apparel or furniture) are currently ahead of adoption. Moreover, within manufacturing we find some sectors that are anticipated to move fast with their social media strategies, in particular automotive & aerospace and computer and electronics. Figure 1: Europe, Adoption and Projected Adoption of Social Media in Europe by Vertical Market (Source: IDC on IDC European Vertical Markets Survey, 2012) 76% 72% Computers and Electronics 68% 64% Finance O&G LEs Media Telecom Projected Adoption (Q3 2014) 60% 56% 52% 48% 44% 40% 36% Automotive & Aerospace Utilities Transport and Storage Prof. Srvcs Mining Other mfg Process mfg Equipment and machinery Business sector (10+) SMEs Construction Distribution, Hotels and Restaurants IT (software and services) and other information services 32% Food, drink and tobacco (CPG) 28% 14% 18% 22% 26% 30% 34% 38% 42% 46% 50% 54% 58% 62% 66% Adopting (Q3 2012) Note: Data refer to companies with 10+ employees and are weighted by number of enterprises 7

8 4. Drivers and Barriers The consumerization of IT was a key determinant to the growing acceptance of social media tools used for business purposes among EU enterprises. The social Web changed and is continuously changing the way people interact for personal reasons, how people interact with businesses and even how employees interact in their workplaces. This new form of technology-led interaction pushed European enterprises, just like businesses elsewhere, to progressively explore the use of social media tools to meet their own needs and respond to different market and business factors such as the negative impact of the economic climate on revenues, an evolving competitive landscape and the need to build and boost brand awareness, respond to customers' changing expectations or even to unsatisfied customers, but also to deal with muting workforce dynamics in which attracting, hiring, managing, and retaining top talent is essential to grow the business. In principle, social media tools allow enterprises to respond to most if not all of these market-led as well as business-led needs by: expanding the boundaries of the enterprise; allowing to map the competitive landscape and therefore gain competitive advantage; bringing the enterprise closer to an increasingly empowered customer; identifying new trends and respond to changing mindsets in a timely manner; boosting efficiency when used to improve internal operations. There are clearly other specific drivers for social media adoption by EU enterprises, including the rise of digital commerce, which is expected to have a strong impact on the nature of social deployments in the years to come. So far, the majority of European enterprises embraced social media technologies to increase external visibility and for customer-related interaction. This is confirmed by IDC's survey findings, which show that most enterprises rely on social media to increase awareness about the company and its products and to manage relationships with prospects and customers (Figure 2). The importance of social media to increase awareness about the company and its products and to manage relationships with prospects and customers is a common driver both to large enterprises and SMEs, confirming that the vast majority of EU enterprises are clear on the benefits of social media for customer-facing and marketing-oriented processes tied to building brand awareness and strengthening the interaction with customers and prospects. From a vertical perspective, the use of social media to increase external awareness is particularly relevant to customer-oriented sectors that need to improve the perception of their brand, products and services, including retail, media, professional services, and discrete manufacturers in segments such as consumer electronics, automotive, and aerospace and defense, as well as energy companies. The use of social media to manage relationships with customers and prospects was selected as the key driver in financial services, receiving also particularly high mentions among professional 8

9 services enterprises, which increasingly want to achieve a better interaction with customers across a wider range of channels. Gathering ideas and feedback for products and services is the third driver overall scoring high in both large enterprises and SMEs. In the latter group of companies it has grown in importance compared with the past, a sign that social media is entering to some extent the innovation and idea-sourcing process also in smaller companies. From a vertical perspective, retailers, wholesalers and discrete manufacturers (high tech and transport equipment manufacturers in particular) selected this option the most showing a strong commitment to using social tools as a means to reach the mass market for feedback and therefore for improving customer loyalty and satisfaction and eventually grow the bottom line by responding in a timely manner to customers' changing needs and mindsets. It emerges of relatively higher importance also in media and professional services, in particular the IT services segment. These results show to some degree that many companies, especially small companies, still fail to recognize how social media can be leveraged and integrated in other business processes, especially internal processes, to help deliver on strategic business priorities and improve overall performance by focusing on the efficiencies that enhanced collaboration and efficient knowledge management can bring about. In fact, we can see that acquiring and sharing knowledge within the company is in general perceived as a lower force to adoption (having moreover fallen in importance compared with past surveys in large enterprises, while being confirmed low in SMEs). It also confirms that most EU companies are still focused on the growth agenda, as the current economic climate calls for immediate action in this area, as opposed to the internal agenda. In this context, the key reasons behind adoption reside in achieving better external communication and in understanding and navigating the competitive environment, while being less related to enhancing internal efficiency across different workflows - key to boost productivity and contain costs. 9

10 Figure 2: Key Reasons to Adopt Social Media for European Business sector companies (Source: IDC European Vertical Markets Survey 2012) Increase awareness about the organization and its products Manage relationships with customers and prospects Gather ideas/ feedback for products and services Identify prospects or partners Generate revenue through direct sales Moderate conversations about company's products and services Acquire and share knowledge within the company Create customer awareness on organization s energy consumption Respond to customer questions or complaints Collaborate with clients or partners on a project 0% 10% 20% 30% 40% 50% Note: Data refer to companies with 10+ employees and are weighted by number of enterprises The barriers to social media adoption for business purposes are multiple, spanning from cost to a typically conservative cultural approach to change and innovation, to fears related to content, data leakage, compliance, inappropriate employee usage, or even the difficulty of allocating skilled resources. Figure 3 shows that the vast majority of EU enterprises that do not adopt nor plan to adopt social media tools in the near future are challenged by the difficulty of measuring the impact of social media on core business objectives. This is common to the vast majority of verticals and across all sizes of enterprise, a sign that end-users still find it hard to evaluate the return on investment of social media, which includes both quantifiable and unquantifiable benefits. This item is followed by concerns related to the potential misuse by employees, both related to the negative impact on productivity levels but also to the potential loss of sensitive data, for example. Larger sized enterprises are more concerned than SMEs over employee misusage of social media, still we can say that this concern applies to all enterprises, even if with a different priority level. 10

11 Justifying the expense on social software emerges as the third challenge overall and is particularly relevant in SMEs, where it is indeed the top challenge. Limited human resources ranks as the fourth barrier among EU companies, which as we know during the crisis went through major staff reductions and now are finding it difficult to allocate skilled resources to newer developments and initiatives. This option was selected the most in the financial services and telecommunications sectors. Getting executive support remains a relatively high barrier scoring fifth and being mentioned by significantly more respondents compared to what emerges as the sixth barrier overall. However, it has fallen in importance compared to previous findings, especially among SMEs of all sizes, although it remains slightly more important for very small SMEs for which cultural resistances are often harder to be abated. This is a key step forward as success depends on senior level recognition and acceptance of the importance of enterprise social media. Figure 3: Key Challenges to Adopt Social Media for European Business sector companies (Source: IDC European Vertical Markets Survey 2012) Measuring impact on core business objectives Concerns related to employees' misuse Justifying expense on social software Limited human resources Getting executive support Concerns of potential negative impact on brand/ reputation Concerns related to content protection Concerns related to regulatory compliance 0% 5% 10% 15% 20% 25% 30% Note: Data refer to companies with 10+ employees and are weighted by number of enterprises 11

12 5. Opportunities for Digital Entrepreneurship Social media changed and is continuously changing the way we interact and as its use matures in the EU, entrepreneurial enterprises will continue to look for ways to better leverage these tools in day-to-day workflows to make the most productive use of social interaction. It is possible to categorize opportunities in different areas, both supply and demand side: On the supply side, opportunities will be linked to the launch of new services and/or the establishment of new businesses offering Social media related services/technologies On the demand side, opportunities will be linked to the value generated in both horizontal and vertical specific processes of EU companies across all vertical markets Supply side Business opportunities IDC believes that the more social software grows into enterprise social networks that include key functionality like profiles, activity streams, blogs, and wikis, the more companies will require a set of services that offer the integration of these capabilities into the key workflows. Moreover, over the years, companies will increasingly look to social solutions as decision support and indeed service providers and software vendors are partnering to supply social media monitoring services on an on-demand basis. Indeed, still many European enterprises are spending time and money monitoring social information manually, for example hiring new graduates or interns in order to search and monitor the information that consumers are sharing on the social web, or adding this job into the tasks of the marketing or the CRM function. Ultimately, however, the cost-effective way to drive value from large amounts of information is to automate collection and analysis. While existing businesses can benefit from opportunities opened by Social media to improve their core processes, a number of opportunities will allow the supply-side to launch new services and/or establish businesses based on Social media. They include (Figure 4A & 4B): Creating and leveraging communities of interest Content creation and distribution platforms Social networked e-commerce Social media online advertising & conversion to purchase Social marketing services & products Social media software, tools and services Moreover training organizations and education institutions can benefit from the opportunity to offer social media courses, with a specific focus on the business issues (especially marketing, 12

13 sales, and collaboration) that social media can help facing. Indeed, social media is not really about IT, but more about new ways of doing business within and outside companies' boundaries. Figure 4A: Supply-side Social media Business Opportunities Communities of interest Content creation Social networked e-commerce Creating communities of interest that aggregate different stakeholders (students, customers, patients, etc) around specific issues or causes. Leveraging communities of interest to offer services around marketing, market research, advertising, R&D, product development, etc. Leveraging communities of interest to develop socialytics. Providing new platforms for content creation, distribution, and consumption. Enabling new forms of content creation, including co-creation and transformation of personal and group communications into content. Changing not only the economics of content creation and distribution, but also the nature of content itself, which becomes an evolving discussion, rather than a fixed product. Facilitating transactions by adding a purchasing function to a seller s social platform or by adding social features to an e commerce site. Examples include suggesting products that were bought by members of the shopper s online social groups or see what products their friends liked and recommend them. Figure 4B: Supply-side Social media Business Opportunities Social Media Online conversion Leveraging online research, referrals and testimonials to drive the purchase and increase online conversion rates. Making brands & product offers (such as baby products, books, pet products, clothing, groceries and any other product) more visible & accessible and converting clicks to purchases Social marketing services & products Supporting businesses and especially SMEs, in defining a social media program, implementing it effectively, and building upon results. Providing social marketing training or even outsourcing to EU organizations. Social Media Software, tools and services Developing software and tools which allow building new social networks or managing and/or adding new capabilities to existing ones such as Social Media Monitoring, Social Media Engagement, Social Media Management, Social Analytics etc. Supporting companies in creating an effective social media strategy across companies' business processes. Integrating social media data/analysis in companies' core applications Demand-Side Business opportunities: Functions and Horizontal Business Processes Social media can be used externally to: Connect with customers and provide customer service in real time and at reduced costs Draw customers and partners into the core innovation process and address the need to speed and improve product development, which is an increasingly important consequence owing to economic pressure, changing business models, increasing competition. Beyond being used externally to connect with customers and other stakeholders, social media can also be used to improve internal operations, for example: Within HR it can be used to recruit and prescreen candidates, therefore ultimately helping improve talent recruiting while reducing time and cost of this process 13

14 Within sales departments it can be used for prospects research, to generate leads and build credibility with social media content for sales purposes Boost employee communication and collaboration: social software provides the foundation to connect employees to each other and to data and content solutions, to create a new user experience, and to embed social capabilities into existing tools like systems So far EU enterprises adopted social media in a silo and departmental approach. In the years ahead digital entrepreneurs will differentiate themselves from competitors in the fact that virtually all departments, from HR to marketing to product development to customer service to sales, will leverage social media technologies to enhance workflows. The differentiating factor will be that of aligning social media strategies with business objectives and only those enterprises that will be able to successfully integrate social media throughout the company will achieve a real business impact and benefit from the full spectrum of opportunities that exist. In general, social media technologies bring about significant opportunities for enterprises to increase efficiency and the effectiveness of work interactions both internally between employees and externally for what concerns customers and business partners therefore ultimately raising productivity. A McKinsey study 1 on social technologies indicates that when fully implemented, social technologies give companies the opportunity to raise productivity of knowledge workers by 20 to 25%. The same study indicates marketing to be the most common application of social technologies in 2011, followed by sales and IT operations. Also feedback received from the Focus Group Webinars organized by Europe Unlimited in May 2013 to discuss business opportunities related to social media indicated that Sales & Marketing functions will be the most impacted by social media, followed by Customer Support/Services and R&D functions. The move to a more mature approach to the use of social will not be without pitfalls and risks though. Companies will need to bring expertise, a strategic focus, and a broad plan to drive real value from the deep change that these technologies and processes are bringing. So, to fully benefit from social media, enterprises will need to rethink to some extent the decision making process, less centered on the technology itself and more on the interactions that occur between different stakeholders and how these relate to specific business objectives, so as to define how social technology can enhance key processes and ultimately contribute achieving desired business targets. Indeed, a successful social media enterprise strategy moves beyond the IT project implementation and must include behavioral change management. This opens opportunities for those players that will be able to assist enterprises in putting in place the needed cultural shift based on the principles of openness and information sharing. In this optic, each enterprise is likely to build a "personal" roadmap as it is improbable that "one size fits all". One of the key drivers to increased adoption of social media is the rise of digital commerce, which is expected to have a strong impact on the nature of social deployments in the years to come, 1 The Social Economy: Unlocking value and productivity through social technologies (July 2012) 14

15 ultimately affecting content delivery, commerce, datacenter architectures, advertising, marketing, telecommunications, and social interactions. Increased competition in social media marketing and social ad placement, for example, will be strong growth drivers to social media deployments among EU enterprises that have a strong customer orientation as more and more companies will look to automate solutions to accelerate social listening and reflect the rapid automation required to integrate solutions into existing enterprise applications, particularly CRM integration. Salesforce.com, for example, is transforming advertising and launched a social advertising application that connects social ads with CRM and social listening, meaning that brands and advertising agencies can power social ad campaigns on social networking sites such as Facebook and Twitter using real-time customer and social listening data. This clearly expands businesses' outreach capabilities and effectiveness, as customers are targeted in entirely new ways and the return on advertising spend theoretically maximized. Looking into companies' key horizontal processes, it is possible to identify several business opportunities. They include (but are not limited to): R&D: Product design collaboration platforms, crowd sourcing ( Figure 6) Production, operations and delivery: supply chain & procurement platforms, experts collaboration communities (Figure 7) Sales and marketing: Customer sentiment analysis, brand awareness, influencing consumer decisions, demand forecasting, social marketing, sales lead generation and intelligence (Figure 8 A&B) Customer support: Customer care and after sales service (Figure 9) Administration and support: Social ERP, social recruitment, knowledge ad interaction productivity (Figure 10) Figure 6: R&D Social Media Business opportunities New customer insights on products Generating rich new forms of consumer insights at lower cost and faster than conventional methods. In addition to engaging consumers directly through social media, companies are watching what consumers do and say to one another on social platforms. This provides unfiltered feedback and behavioral data, which can be analyzed to get valuable information on products and services. Product design collaboration platforms Gathering customer feedback, improving collaboration among engineers, and co-creating products with an external community. Improving communication and collaboration between R&D and engineering teams in dispersed locations. Reaching out to more specialized and highly skilled groups such as engineering communities or external research organizations. Using enterprise tools to improve collaboration, knowledge management, and coordination within and between enterprises, especially in knowledge-intensive sectors. Crowd sourcing for product innovation Enlisting social technology users to crowdsource product ideas and even to co-create new features. In crowdsourcing, a broad spectrum of participants (the crowd ) is solicited to submit ideas, which are then evaluated. In some cases, the crowd itself evaluates, comments on, or modifies the entries. The process can also be broader asking customers or other outsiders to contribute their own concepts or designs. 15

16 Figure 7: Production, operations and delivery Social Media Business opportunities Supply chain & procurement platforms Managing procurement and logistics using Social platforms, which allow instant communication between different parties on complex supply chains. Expert collaboration communities Improving organizational performance by streamlining communications and enhancing collaboration, both internally within the enterprise and outside with contractors, partners and suppliers. - Facilitating collaboration and co-creation, reducing the time spent in unnecessary in-person meetings, and helping share internal knowledge and best practices. - Accelerating the integration of new staff, contractors and outside partners into teams. Figure 8A: Sales & Marketing Social Media Business opportunities Customer sentiment analysis Gathering insights about products and brands, opinions about competitors, and perceptions of market segments through customer interactions and conversations on social platforms, which can be used as input for product requirements and design, advertising campaigns, pricing, packaging, and other marketing and product development activities. Influencing consumer spending decisions Leveraging social technologies for product research and recommendations to influence consumers purchasing decisions and boost online sales as consumer spending is increasingly going online and social, especially for categories where most of sales are made online. Demand forecasting Using Social technologies to multiply the potential sources of information about demand, adding another level of granularity to improve distribution efficiency and responsiveness. Based on information shared on social networks, suppliers can respond to localized variations in demand. Figure 8B: Sales & Marketing Social Media Business opportunities Social marketing Sales lead generation Sales lead intelligence Leveraging potential for customer acquisition, and to reach a large number of customers in a less intrusive and more effective way. Engaging potential clients more closely and more personally. Using social media to develop better insights about potential customers and assess how attractive they might be to acquire. Developing social media after sales services to increase overall satisfaction with the brand. Building and increasing brand awareness & trust by engaging with customers and fans and build loyalty in the user/customer communities. Reaching more people through extensive networks and drive traffic to other corporate channels. Engaging with customers with new content, exclusive offers and information to enhance customer retention. - Benefitting from effectiveness with which sales leads can be generated and fostered through social technologies, reducing the costs of call centers and improving the productivity of costly experts/agents. Enabling sales agents to reach customers out with a tailored offer when reviewing social contacts. By building social capital online (e.g., by contributing content that enhances their credibility), sales reps can convert contacts into leads. Enabling sales agents' collaboration through corporate social technologies to improve cross-selling, build referrals, and research relevant contacts in new prospect companies. 16

17 Figure 9: Customer support Social Media Business opportunities Customer care and after sales service Improving customer service in several ways, as a social platform can act as a dedicated customer service channel, taking on some of the work usually performed on the phone by call centers (e.g., answering routine questions about product features) to supporting online communities for customers or enthusiasts to answer technical inquiries from each other. Continuous support is important for customer retention. Bringing significant cost savings per customer contact using social media instead of traditional call centers, while retaining comparable service levels. Figure 10: Administrator and Admin Social Media Business opportunities Social ERP & management/admin Using social tools for personnel tasks, such as orienting new hires and selecting project team members. Mirroring social networking functionalities in ERP tools to facilitate collaboration and communication among employees and partners across large, geographically dispersed operation networks, enabling them to proactively solve business problems and raise productivity by: Facilitating collaboration and communication in the enterprise and with partners, Easily tracking conversations, projects and processes, Improving business processes, Documenting business processes to support lean initiatives, Building and maintaining knowledge bases and sharing best practices. Social Recruitment Hiring of talent & best staff Providing a window into the labor market that can be used to determine what skills are available and also allows businesses to discover the competencies and networks of specific candidates. Leveraging social recruiting platforms to make significantly easier and cheaper to identify talented individuals across the world. Improving staff retention rates by improving the general work environment, building communities of employees with shared interests and maintaining online contacts. Knowledge & interaction productivity Increasing collaboration among employees whose work requires complex interactions with other people and independent judgment. This includes professionals such as lawyers and engineers, managers, salespeople, and a range of other knowledge workers. Enhancing knowledge management by closing the gap between knowledge management and business intelligence Demand-Side Business opportunities: Operations and Vertical Specific Business Processes From a sector perspective we can recognize different opportunities from social media and digital entrepreneurship. In particular: Virtually all of the key EU telecom players already rely on social media for business purposes and are committed to making more extensive and efficient use of these tools. Vodafone for example is enhancing its brand s communications strategy across all social media channels, while O2 in the UK deployed a platform to monitor and analyze, in real time, all social media activity around its brand in the country. Considering the social media maturity, the more advanced users are moving beyond having a presence on the key platforms, to embedding social tools into core business processes and capabilities. In this case, social media is used not only to communicate with customers, but also to share knowledge with suppliers, business partners, and employees. Deutsche Telekom for example established its company-wide Enterprise 2.0 project to boost its social media strategy, develop social media guidelines and 17

18 share best practice efforts. The working group includes representatives from all departments that are engaged in 2.0 activities such as marketing, communications, HR, customer service and IT. Moreover, as the market evolves increasingly more telecommunications companies will form partnerships with technology vendors to position themselves as providers of analytics solutions leveraging social media content. European utilities are fairly committed to the use of social media, owing to its value as a customer communications' channel and the fact that it allows to extend brand identity, while building customer intelligence. So, if we will see continued efforts on deploying social media to monitor brand value and for marketing-related activities or to serve customers on social media Web sites, in the years to come we also expect to see more and more utilities players look at leveraging social media tools to: improve crisis management and real-time outage tracking educate customers on recycling, renewable energy, energy efficiency enhance demand response programs by encouraging and incentivizing customers to reduce demand during peak periods market renewable energy service options improve in-house communications and knowledge management Advertise positions and recruit employees. Media: embracing social media for companies in the media sector is a must in a context where the audience is changing the way content is consumed and spread. Moreover, social media is also at the heart of how content is actually created. Indeed, these technologies provide the grounds to build content from multiple platforms and channels in a collaborative environment, often speeding up the news cycle for example. Oil and gas processing companies are aware that social media can bring value to their business but they also recognize that its value within the business is different to the most common use cases from B2C markets. Indeed, in the oil and gas industry social media is far from being part of revenue generation, as, for example, it is unlikely that players win customers or drilling contracts through social media. However, it does have the potential to create stronger bonds between all stakeholders. Moreover, in a sector exposed to criticisms the value of social media comes from monitoring what people are saying on different channels and this provides also the opportunity to educate people on what is really going on. Moreover, using social media in this sector can bring along meaningful innovation and become therefore a key differentiating factor as it allows to: prove industry leadership through knowledge dissemination of key projects and technology advances remain ahead of talent recruitment collaborate in a context where teams are highly dispersed on the territory (for example engineers can effectively collaborate with offshore rig workers) Companies in the transportation and storage sector are exploring the use of new media to provide updated and improved travel information and improved customer service in general, but also to identify in a timely manner disruptions that can impact the services offered. In general, social media channels for transportation companies can be used as a public relations channel to position the brand, build competitive insight, boost employee communications and 18

19 operations especially important in presence of large field workforces, and ultimately drive sales. The distribution, hotels and restaurants sector, and retailers in particular, uses social media in increasingly innovative ways to influence consumers and drive purchases. Indeed, having a social media presence is becoming essential to build and maintain a loyal customer base but also to tailor and convey messages and product offerings more effectively. In general, digital entrepreneurs in the retail sector are able to leverage social media to measure customer satisfaction, for merchandise planning and assortment optimization, as well as to put together customer intelligence based on lifestyle patterns analysis, brand sentiment analysis, and so on. The impact of social media technologies in the professional services sector is twofold. On the one hand, social media opens new revenue streams tied to helping customers manage social media technologies (for example, advertising and marketing companies will increasingly build practices in social media such as monitoring and analyzing social data, while IT companies will provide the technology and law firms could advise on appropriate social media policies that take into account issues tied to intellectual property protection and compliance). On the other hand, professional services companies will gain also from the internal efficiencies and value creation that comes along from the collaboration, communication, and knowledge sharing social media enables. In this sector, more than others effective knowledge management enabled by social software and social media technologies in general have the advantage of raising significantly productivity of knowledge workers. Currently, most use cases for social media technologies in manufacturing are around managing corporate profiles on consumer social networks to interact with the dispersed multitude of customers. However, manufacturing enterprise can leverage social media to drive efficiencies across all nodes of the value chain. To do so, manufacturers will need to find a way to combine and leverage the rigor of traditional IT systems with the flexibility offered by social technologies. In fact, manufacturers are often looking to structured IT architectures to help them control master data, standardize business processes, and get ready to scale for growth. Adding social network capabilities to the traditional ERP foundation, for example, would add more flexibility in employees' interactions and help manufacturers speed the decision making process. In general, most business application families such as supply chain management (SCM), manufacturing execution system (MES), or product life-cycle management (PLM) can successfully be powered by collaborative technologies integrating social networks. Financial services rely highly on brand reputation, key to gain and retain customers. Social media technologies can help institutions build and maintain a high profile, while enabling the identification of future customer needs and also help address to some extent the complexity which is typical of this highly IT-sophisticated sector. So far most deployments are related to customer centric processes such as marketing and customer services, which are areas in which financial services can benefit greatly, but more advanced users recognize the value of social media from an internal collaboration perspective. These users are able to combine consumer data and other sources of data to build accurate risk profiles, detect frauds more quickly, and also to source ideas for new products and services. In this setting, innovative 19

20 banks will increasingly move from an experimental phase with social media to enter an integration phase, where the full concept of social is integrated to the financial service enterprise. This will include an initial experimentation with enterprise social networks, but increasingly integration with analytical applications, advanced socialytics, as financial institutions look to create value to the operational organization. In general terms, the greatest opportunities that will define digital entrepreneurs that fully grasp the opportunities ahead will be leveraging the big data that social media generates so as to extract valuable and actionable information from the interactions that occur with different stakeholders in areas such as advanced demand forecasting for sectors such as manufacturing and retail or for fraud detection and better risk management in financial services, for example. Overall, the use of social analytics across all sectors is still in its infancy and we expect this to be an area which increasingly more companies will look into with growing emphasis and an area which most likely could be outsourced. 20