Chapter 8

Social Media Information Systems

Most of use social media in one form our another and the number that do not shrinks everyday.  Let's take a look at IS in SM and see what effects it can have on an organization when they utilize it.  First off lets define SM, social media is simply the use of information technology to support the sharing of content among users of a network.  We know what all of those words really mean for a change so there isn't much need to break it down further.  What we do need to know in addition to that is that networks of people of a social media platform form what are called Communities of Practice or simply communities.  Communities are groups of people related by common interests on social media.  We will be using the simple term communities when we are talking about them.  Information Systems serves three distinct roles regarding SM.  The first role is as a  social media provider which is the entity that create the social networks that allow communities to form.  The next role information systems exist in is the user role.  Users can be individuals using social media, 73% of all persons with internet access can be classified as a user, 40% of them access their social media using a mobile device.  Users can also be classified as an organization or firm.  77% of Fortune 500 companies maintain an active Twitter account, 70% have a Facebook page for their organization and 69% maintain a YouTube channel.  Organizations are not only users but content providers as they create content and in some cases even create and maintain their own SMIS focused toward their customers.   Finally IS supports the existence of the communities of which users can be part of many.  To maintain the coherence of these communities organizations create a viral hook which is some form of inducement for users to pass their communications through the tiers of a community such as a prize or reward for doing so.  Social media information systems have the same five components of a system that any other IS does, let's talk about the specifics.  First is the hardware component which exists within the user role and provider role.  Users' hardware will generally consist of the device they use to access social media such as a desktop computer, laptop or their mobile device.  The providers' hardware is simply the servers used to host and render the social media applications users contribute to.  Next is the software component that again is distinct among users and providers.  Software for users consists of their OS, browser used to access social media as well as the applications the access with the browser or standalone social media applications.  Then there the data component.  This can be broken down into two parts when talking about social media IS, content data and connection data.  Content data is data that is contributed by users in response to data that already exists.  Think of one user replying to a post of another.  Next there is connection data which is data about the relationships that exist within and between communities.  We yet again draw a distinction among users and providers when talking about the processes component of the system.  User processes are informal and socially oriented as users do what they want and generally follow the lead of other users.  The small exception here is that an organization will likely create a guideline for how their official social media accounts are to be used adding some structure.  The purpose here is to ensure the organizations use of social media is aligned with their overall business strategy. The people component should be obvious here, users make up this so organizations and individuals.  

Organizations and Social Media

As we have said a lot of organizations are using social media in order to advance their overall business strategy.  There vast number of users of social media means that any modern firm not doing so is losing a huge competitive advantage but engaging in social media as an organization is not without its challenges.  The dynamic nature of social media has changed the balance of power among customers and organizations.  The free flow of information and feedback puts a lot of power in the hands of the customer in a way that has changed the game.  This is especially true regarding sales and marketing.  Obviously corporations can take advantage of the vast number of users by advertising to them through social media, this is made even more effective when organizations target specific communities to whom their product or services are relevant.  This allows organizations to ensure that their advertising dollars go that much further.  When an organization engages in a pay per click advertising campagin or one where they pay every time a user clicks on their add they want to make sure that those clicks have a high chance of creating value for them.  The shift in power is significant in advertising because users can easily provide feedback on products that has a high visibility to other users.  This is a new challenge for firms and one which they can't easily control.  When negative content is created by users respective to a firms product or service they have to decide how to address it.  There are only three real options all of which have their own set of outcomes.  Firms can delete the content if possible to reduce visibility though if they do this after the visibility is high there could be backlash from users.  Firms can also simply ignore the negative content though again if there is high visibility already this may not be the best choice.  Finally, firms can respond to the negative concept, this option has created a new avenue for the customer service chain as well.  The option to respond to negative content can create the opposite effect and work in favor of the firm, it also allows the firm to build up individual relationships with it's customers where there is need to do so.  Peer to peer support in social media also benefits the customer service chain.  User created reviews and user to user support has the potential to create a lot of value for the firm and is generally self sustaining due to users motivation to help each other and stand out among their communities.  Logistics is also affected here though to a lesser degree.  Logistic professionals can utilize social media to build relationships with their supply chain providers and users.  The manufacturing chain can also benefit greatly by the utilization of social media.  Users' feedback on products can help greatly with the design phase.  This is true when considering a new iteration for a product or when creating a whole new product.  Organizations can seek out specific information from users on social media or examine existing review data to glean valuable feedback and input from users.  The human resources chain again has the potential to benefit greatly from social media.  SM has created a whole new avenue for HR professionals to prospect, evaluate and recruit new talent for their firms.  The value here is great as firms don't have the need to wait for qualified applicants to find them, they can seek them out and target them with such services as LinkedIn.  

Social Capital and Organizations

Capital has been defined as the investment of resources for future profit.  Social capital is simply the investment in social relationships with the expectations of a return in the market place.  Social media has allowed firms to invest in social capital in new ways that have great potential in adding value.  The value from social capital can come in many forms.  Information is one, there is a troth of information available to organizations through social media.  For one they can get an idea of the general opinion their customers have of them and their products.  They also stand to learn much about their customers and their buying habits based on their social media behaviors and the communities they are a part of.  Firms can also generate influence through social media capital.  This relates strongly to the customer service chain as firms can fix problems they once weren't even aware existed.  This strengthens relationships and creates customer loyalty.  Firms can also influence customers to use their products and services by creating incentives to do so through social media such as creating a social media post for the new owner of a BMW, now all their friends will know how successful they are!  

The Challenges

We have talked about customer feedback and the need to have some control over it.  This is a new challenge for firms and once which they have to address in one form or another.  SM also creates security challenges for firms.  Employees who use social media are a large contributor here.  Posts from employees can be used to glean information about them and even potential cues as to what their organizational passwords are enabling outside entities to access their network.  Information leaks are another threat here.  Employees can intentionally or unintentionally leak valuable firm information to the general public in a huge way through social media.  This is can take the form of propriety information or even finance figures that an employee thoughtless commented on to his friends.  This is generally difficult to control as when it is done by accident it can't be foreseen and when it is done intentionally it can very easily be done so anonymously social media.   Finally there is the loss in productivity that exists around social media.  Vast numbers of users access social media while they are at work on company time.  These employees are in most cases not contributing to the value of the firm while doing so creating a large leak from productivity.  Whatever the challenges though it is certain that firms will continue to engage in social media ever seeking to glean whatever competivie edge is available to them.