Register Blogs Advertise with usHelp Desk Today's Posts Search

Rate this Entry

How can social media help businesses?

Submit "How can social media help businesses?" to Facebook
Posted 6th March 2017 at 07:01 AM by followerssalescom

Social media is still new enough that many executives wonder what, if any, long-lasting impact it will have on how business is conducted. Is it worth jumping on the bandwagon? Or conversely, is it wiser not to jump, but to wait until theres greater clarity on whether social is here to stay?

Our recent social business report suggested that 67% of executives thought that social media had the opportunity to fundamentally change their businesses. The number was higher for companies that were deriving greater business value from these technologies. Compelling reasons, rooted in fundamental concepts of economics and business strategy, support this belief that social media will fundamentally reshape not only individual organizations, but also the business environment as a whole.

It should come as no surprise that social media technologies could have such a transformative impact on business, because information technology has been transforming the shape of modern business for decades. Its impact was first felt in the finance industry with the introduction of ATMs in the 1960s and 1970s and the dawn of high-speed trading algorithms in the 1980s. In the 1990s, enterprise resource planning (ERP) systems began to change the internal operations of companies across multiple industries.

More recently, Internet technologies have allowed companies to integrate their information sharing more tightly with other organizations, creating opportunities for greater specialization, increased outsourcing and globalization. Social media is simply the next step in this trend of technology influencing the shape of business.

Social media is now replete with examples of companies enabling knowledge integration outside the confines of traditional organizations. Wikipedia and open source software are perhaps the classic examples, where groups of volunteers come together to create products that directly challenge commercially produced competitors.

Even in more traditional organizations, knowledge integration increasingly happens outside firm boundaries. Online customer-support communities, such as those created by SAP and Dell, allow customers to share knowledge with one another and require minimal employee involvement. As social media increasingly allows knowledge integration to occur outside and across traditional organizational boundaries, it will change fundamental aspects of the firm and how it is managed.

Another key function of companies is to lower transaction costs. It is too expensive and time-consuming to turn to markets for every aspect of production. Instead, companies cultivate their own readily available, in-house accounting, procurement, marketing, or R&D departments, to facilitate essential transactions and streamline operations.

Social media is also lowering these transaction costs. The rise of the so-called collaboration economy allows companies like Uber, Airbnb, and TaskRabbit to create a market that allows people to bypass traditional companies that provide these services and transact directly with individuals for needs such as room rental, ride sharing, and simple tasks. Similar trends are also occurring for traditional companies. Platforms like Innocentive allow traditional firms to tap a market for addressing specific research and development problems. In some ways, LinkedIn is becoming a standing market for talent, creating a searchable database for employees that employers can consult when certain skillsets are needed.

Social media will have a particularly disruptive effect on business because it provides an alternative mechanism for realizing these key functions of the firm knowledge integration and transaction cost reduction. As a result, successful companies may look entirely different because of social media.
Source :
Posted in Uncategorized
Views 523 Comments 0
Total Comments 0



All times are GMT -6. The time now is 10:37 AM.