The benefits of using social media for customer relations are fairly tried and tested by now in the enterprise world, and there are very few major companies that aren’t taking advantage of it in some form.

It’s not difficult to work out the cost savings of using social media platforms to answer feedback against the cost of hiring a call centre full of customer service agents.

Marketing departments can track the resolution rate over the duration of a month and extrapolate numbers from it based on the cost of a customer service representative’s salary, as well as looking at sales increases as a direct result. It’s crystal clear to the C-suite while the IT and marketing departments are praised for their innovative use of technology – everyone is happy.

But when it comes to companies using social media internally for collaboration and communication within their own walls, the issue of return on investment (ROI) can be a thorny one. Businesses are implementing schemes without similarly clear set goals in mind, then stumbling at the first questions from the C-suite – the ones to whom they have to justify it all when it comes to asking for additional resources going forward.

Best-selling author Christer Holloman’s ‘Social Media MBA’ series is based on his experience as a social media consultant for many companies and managing the social media budgets and strategies for The Times and The Sunday Times. His latest book, The Social Media MBA Guide to ROI, is aimed at those in all industries and departments who want to prove the tangible results of their social media schemes – something that Holloman firmly believes companies can and should be doing just as rigorously for their internal social media.

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‘Can you compare external and internal? Absolutely,’ argues Holloman. ‘Can you prove ROI? Absolutely. If not, I would be worried that you’re wasting time and resources on things that might not work.’

He’s also out to challenge the assumption that social media cannot be linked to short-term ROI, his goal being to get positive cash flow for his clients as soon as possible. 

Analyse this

Before embarking on any business activity, companies need to have carried out analysis of the business case to understand what the problem is that they want to address, weigh the cost of the solutions and determine how to measure engagement, says Holloman.

‘This should be the same whichever scenario you find yourself in, whether it’s a social media marketing campaign or an internal collaboration platform for product development.’

Holloman explains how this applies to the problem of company social media platforms that sit unused by staff, gathering digital dust and ultimately wasting money.

While many companies are getting great use from platforms such as Yammer that are designed specifically for enterprise collaboration, engagement with employees has been patchy with some. Deploying these tools might seem like a great idea, and it might all look good on paper, but what are they doing wrong?

‘Some of these solutions feel like more of a chore to get your head around,’ says Holloman. ‘It can feel forced and unintuitive when a platform is pushed on staff, especially if it disrupts daily workflow, and this is because it all needs to be integrated.

‘That has been the key to success for platforms such as Just Eat serves up collaboration with Google Apps

As well as just ROI, companies can identify key performance indicators (KPIs) to monitor specific areas of their overall social activity. Different KPIs can be used depending on the nature of the business and the goals in mind.

‘This can be the number of face-to-face meetings that are still getting in the way of efficiency and taking up time or how many phone calls it’s cutting down on, using logs in internal systems. Then you can look at how many projects are being delivered on time or within budget, and tie percentages to that,’ he says.

Holloman sets out a practical framework by which metrics such as these can be gathered and the necessary processes and tools identified, so companies can move from thinking about the importance of measuring their social media outcomes to actually doing it. Many of the same methods used in external social media apply to every area of the business on the journey to prove and improve ROI.

Defining business-critical success criteria is the first step in laying that crucial groundwork. Once the business understands what it’s ultimately trying to achieve – whether it’s driving sales in a particular part of the business, saving money or increasing efficiency in a certain area – the social media can then be tailored to support these goals. The second step, says Holloman, is setting realistic goals, with specific numbers attached.

‘Third, you need to put in place the proper mechanics to track this,’ says Holloman. ‘It’s all well and good knowing what you should be doing and having a vision to get there, but you need some indisputable facts.

You need to look at tools and software that can put you in the position to be data driven and not just rely on gut instinct. Tools like Google Analytics and Radian6 will help you be more scientific.’

Feedback loop

Analysing and tying in the right data and responding to it accordingly is a skill that may not automatically come naturally to the marketing department that may be assigned to manage social media, but for IT it’s becoming a vital skill set.

‘CIOs have an important role to play here when you think about the fact that they are already so involved with big data,’ Holloman points out. ‘They have to identify those opportunities and those connections, because it may not be something that marketing can foresee or think about. They don’t necessarily 'get' how data from across the company can be combined with other data sets to produce actions. Which is exactly why CIOs can and should be involved.’

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Holloman firmly believes that this is the crux of much of the problem concerning internal social media and collaboration – that it is too often confined to the product development or marketing departments, or perceived as being a marketing tool.

‘There’s a massive opportunity here, in that IT are the people who are aware of upcoming tech trends but in the past they haven’t really been challenged to be end-user focused,’ says Holloman.

As the stereotype of the IT worker locked away in a dark server room pressing buttons begins to evaporate in the era of service-based IT, they must work hard to make themselves actively involved when it comes to the business drivers behind social media.

‘If an IT person is in a workplace where social media is not being embraced, I do believe that they can take an active role in educating the organisation about social media, how it’s impacting other companies and how it can be leveraged by different departments,’ says Holloman.

‘If they recognise nobody else taking the lead, they should do it. Don’t wait for marketing to do stuff. Take ownership, and if nobody else 'gets it' just go ahead and do it. Ultimately, it will serve the business, assuming we are looking at ROI as a deciding factor in investing and continuing to invest in these activities.’

Educating the C-suite

IT leaders should not underestimate the importance of their role as an educator of the C-suite. It’s the IT department that is best positioned to bridge the divide between those senior leaders who are visionary enough to see the ultimate benefits to the bottom line of introducing collaborative internal tools and those who aren’t.

This is especially vital, says Holloman, because these schemes often require a top-down approach.

‘There is a school of thought that says you should introduce these projects organically and let people do whatever, until you get to the point where it’s too big to fail,’ argues Holloman. ‘And the tools should feel organic. But viral adoption is a high-risk strategy that can backfire and put people in a bad position in terms of how they’re communicating the value proposition. It needs to come from the top down, and that’s how you ensure longevity in social media investment.’

One great example of this cited in ‘The Social Media MBA’ series is that of global professional services giant PwC. Working in a knowledge-heavy sector, and with more than 16,000 consultants all over the world, quality of service to clients depends on the individuals that happen to be assigned to them. However, by implementing an internal forum that anyone within the business can contribute to, the best insight can be pooled from wherever in the organisation they happen to be.

> See also: Most UK businesses still not providing the right collaboration tools – report

‘All this came about when one of the PwC partners attended a panel discussion about the future of technology, and one of the speakers’ backgrounds was in delivering crowdsourcing projects,’ says Holloman. ‘It planted a seed in the mind of the partner, who then hired the guy as a consultant and carried out a small pilot in one unit of the business to figure out how the mechanics would work and how it could be scaled.’

The level of engagement was phenomenal – over 10,500 PwC employees participated from across all regions, lines of service and grades, generating more than 500 ideas, nearly 34,000 page views, 1,805 comments and 4,206 votes.

During the pilot, 50 ideas were presented to the client, of which 11 were selected, and three with large revenue potential are currently in development.

The firm has had tremendous success in terms of the quality of engagement and ideas – so much so that PwC is looking at packaging the concept into a product that it can sell to other service providers.

‘This kind of incredibly successful collaboration model didn’t happen automatically,’ emphasises Holloman, ‘but rather as a result of clear and meticulous planning on the part of the business leaders.’