Chapter 8: Social Media Information Systems

What is a social media information system (SMIS)?

• Social media (SM)
• IT for sharing content among networks of users.
• Enables communities of practice
• People related by a common interest
• Social media information system (SMIS)
• Sharing content among networks of users

Convergence of Many Disciplines

• Focus on MIS portion of diagram
• Social media is a convergence of many disciplines

Number of Social Media Active Users

Three SMIS Roles

• Social Media Providers
• Facebook, Google+, LinkedIn, Twitter, Instagram, and Pinterest platforms.
• Attracting, targeting demographic groups.
• Users
• Individuals and organizations
• Communities
• Mutual interests that transcend familial, geographic, and organizational boundaries.

SM User Communities

• Community A - First-tier community of users with direct relationship to the site.  User 1 belongs to three communities — A, B, and C.
• Communities B–E - second-tier communities intermediated by a first-tier user. 
• Number of second and higher tier community members grows exponentially.
• Exponential nature of relationships offers sponsoring organizations both a blessing and a curse.
• If social media site wants pure publicity, will need viral hook to relate to as many communities as possible.

Social Media Application Providers

• Facebook, Twitter, LinkedIn, Google...
• May charge fee, depending on application and purpose.
• Free company page on Facebook, but ...
• Fee to advertise to communities that "Like" that page.
• Internal SM using SharePoint for wikis, discussion board, photo sharing.

Five Components of SMIS

SMIS is Not Free

• Costs to develop, implement, manage social networking procedures.
• Direct labor costs
• 92% of companies use social media to recruit employees (93% from LinkedIn).
• 73% hired using social media,
• 1/3 rejected candidates because of social profile

How do SMIS advance organizational strategy?

• Strategy determines value chains
• Value chains determine business processes
• Provesses determine SMIS requirements
• How do value chains define dynamic processes?
• Dynamic process flows cannot be designed or diagrammed
• SM fundamentally changes balance of power among users, communities, and organizations

SM in value chain activities

Social Media and the Sales and Marketing Activity

• Dynamic, SM-based CRM process
• Social CRM
• Customers craft own relationship
• Wikis, blogs, discussion lists, frequently asked questions, sites for user reviews and commentary, other dynamic content
• Customers search content, contribute reviews and commentary, ask questions, create user groups, etc.
• Not centered on customer lifetime value

Social Media and Customer Service

• Relationship emerge from joint activity, customers have as much control as companies
• Products users freely help each other solve problems
• Selling to or through develop networks most successful
• Microsoft's MVP program
• Peer-to-peer support risks loss of control

Social Media and Inbound and Outbound Logistics

• Benefits
• Numerous solution ideas and rapid evaluation of them
• Better solutions to complex supply chain problems
• Facilitates user created content and feedback among networks needed for problem solving.
• Loss of privacy.
• Open discussion of problem definitions, causes, and solution constraints.
• Problem solving in front of your competitors

Social Media and Manufacturing and Operations

• Improves communication channels within organization and externally with consumers, design products, develop supplier relationships, and operational efficiencies
• Crowdsourcing
• Businesses-to-consumer (B2C)
• Youtube for posting videos of product reviews and testing, factory walk-throughs
• Yammer - enterprise social networking service.

Social Media and Human Resources

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

How Do SMIS Increase Social Capital?

• Capital
• Investment of resources for future profit
• Types of business capital
• Physical capital: produce goods and services (factories, machines, manufacturing equipment).
• Human capital: human knowledge and skills investments
• Social capital: social relations with expectation of marketplace returns

What is the value of social capital?

• Value of social capital
• Number of relationships, strength of relationships, resources controlled
• Adds value in four ways
• Information
• Influence
• Social Credentials
• Personal Reinforcement

How Do Social Networks Add Value to Businesses?

• Progressive organizations:
• Have Facebook, LinkedIn, Twitter, other SN sites
• Encourage customers and interested parties to leave comments
• Risk - encouraging excessively critical feedback
• Klout score - measure of individual's social capital

Using Social Networks to Increase the Strength of Relationships

• Strength of a relationship
• Likelihood other entity will do something that benefits your organization
• Positive reviews, post pictures using organization's products or services, tweet about upcoming product releases, and so on.
• Strengthen relationships by asking someone to do you a favor
• Frequent interactions strengthen relationships

Using Social Networks to Connect to Those with More Resources

• Social Capital = Number of Relationships x Relationship Strength x Entity Resources
• Huge network of people with few resources less valuable than a smaller network of people with substantial resources
• Resources must be relevant
• Most organizations ignore value of entity assets

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

• Hyper-social organization
• Transform interactions with customers, employees, and partners into mutually satisfying relationships with them and their communites
• You are the product
• "if you're not paying, you're the product."
• Renting your eyeballs to an advertiser
• Monetize

Revenue Models for Social Media

• Advertising
• Pay-per-click
• Use increases value
• Freemium
• Offers users a basic service for free, and then charges a premium for upgrades or advanced features.
• Sales - apps and virtual goods, affiliate commissions, donations

How do organizations develop an effective SMIS?

• Focus on being cost leader or on product differentiation
• Industry-wide or segment focus
• Premeditated alignment of SMIS with organization's strategy
• Next slide shows process of developing a practical plan to effectively use existing social media platforms.

Social Media Plan Development

What is Enterprise Social Network (ESN)?

• ESN
• Software platform uses SM to facilitate cooperative work of people within an organization
• Improve communication, collaboration, knowledge sharing, problem solving, and decision making
• Enterprise 2.0
• Use of emergent social software platforms within companies, or between companies, partners or customers