Social networking and social media are transforming the way that businesses go to market. The phenomenon is being harnessed to broaden brand awareness, increase market share, and encourage innovation. Early adopters of the technology, such as McDonald’s, American Express, and Procter & Gamble have seen resounding success from their initiatives that have included product launches through social networks, special promotions, and even the
revitalization of established brands.
However, despite steadily increasing examples of the successful application of social networking, CFOs have been more skeptical
about the benefits than have their C-level colleagues. But their reservations may be short-lived. Several prominent surveys (MIT Sloane/Deloitte and Towers Watson) point to the growing importance
of social media in business over the next three years and a poll taken at an Oracle CFO Summit shows that
57 percent of CFOs rate social media as a top- or medium-ranking priority right now.
The problem for the skeptics is that traditional measures of ROI are simply not up to the job of recognizing the complexity of social networking interactions. For example, how does an organization estimate the financial contribution of crowd-sourcing an idea for a new product? And how does it evaluate how much of the revenue generated by a multichannel campaign is attributable to social media? Bearing in mind that 60 percent of people who use social media also post reviews on products and services and 55 percent of buyers turn to social media for information prior to making a purchase, it is no exaggeration to say that the fortunes of an entire campaign can literally turn on the tone of a handful of tweets or reviews. But how does a business reflect this in an ROI calculation?
It is clear that the metrics by which CFOs gauge the success of social media initiatives need to change. Formerly trusted measures associated with the internet age (page impressions, clicks, and unique visitors) are proving less potent in the era of social media that frequently combines the complex interactions of several social networks running in parallel within a single campaign. As digital marketing budgets overtake the size of IT budgets in many organizations there is a pressing need for CFOs to define new measures that recognize the centrality of community engagement as a key determinant of success.
Fortunately, CFOs working with their marketing colleagues can turn to new solutions such as Oracle Social Marketing Cloud Service and Oracle Social Engagement and Monitoring Cloud Service that combine publishing activities, promote social business, and provide important monitoring and reporting capabilities to help manage and measure the effectiveness of cross-channel campaigns.
Although using social media in marketing campaigns and as a tool to enrich the customer experience tends to dominate the headlines, enlightened CFOs are discovering that the internal application of social media also provides rich pickings for driving innovation, productivity, and process improvement. Better still, internal application can provide a low-risk, low-cost entry point into the world of social, acting as a proof of concept before applying social tools to external interactions.
Human capital management is one area that stands to gain the most from social networks. Key findings from an Oracle Taleo research report published earlier this year point to the fact that traditional management practices do a poor job of identifying and leveraging existing talent and of tapping into the larger talent ecosystem. Only 24 percent of workers say their industry relationships and connections are leveraged, and only 27 percent feel their skills and experience are being fully leveraged by employers. This suggests that CFOs who find it challenging to recruit top talent are overlooking the potential of existing employees and highlight the importance of adopting crowd-sourcing models in the identification of talent and in determining the best fit for roles.
Indeed, processes that rely on high levels of collaboration and communication stand to benefit the most from the deployment of social tools. Standout areas for CFOs include crowd-sourcing ideas and knowledge sharing around strategy development, business performance improvement, setting accounting policies, process improvement, and delivery of value to internal customers. Social tools also offer fertile territory for better engagement with analysts, investors, and other interested readers of financial information.
Social tools can also help improve the user experience and increase the productivity of personnel using core financial systems. For example, embedding social tools in the user interface of ERP and other financial systems raises the possibility of greatly improved access to information and collaborative problem resolution when things go wrong.
Overall, there is considerable cause for optimism surrounding the opportunities for social business both within and beyond the enterprise. The MIT Sloan/Deloitte study predicts the importance of social media will increase 250 percent by 2015 as it becomes integrated with enterprise applications, business processes, and systems to drive a fundamental social transformation of the enterprise. Most compelling—with Facebook claiming 1 billion users worldwide as of October 2012 and LinkedIn with 135 million members, and consumers in the US, Europe, and Asia spending more than two hours daily socializing on their smartphones—the rate of social network growth is so dramatic and pervasive that CFOs who fail to get involved risk getting left behind in the race for both profits and talent.