Social media is flourishing. It refers to the use of mobile and web-based technologies to turn one-way communication into an interactive dialogue. Leading companies know that social media is strategic. Although social media doesn’t replace face-to-face interaction, it can, however, enhance the overall client experience and create new sales and servicing opportunities. As a matter of fact, it provides instantaneous communication and promotes collaboration across functional groups and geographic regions. Specifically, Luxembourg-based organisations willing to expand their services to the Greater Region can use social media to strengthen client dialogue.

What are the challenges and implications for CIOs and the management?

While many individuals use social media on a daily basis, the main challenges for organisations is that they may not know how to make the most of social media. They need to understand the various applications of social media and how to take advantage of them.

Social media has been described as a channel, a platform and an online conversation. And that’s precisely what might not appeal to the management of a company to get their buy-in for supporting social media within the organisation. So let’s consider the following aspects:

Return on investment (ROI): Measuring social media ROI might be complex. When considering the efforts, organisations have to identify both customer-facing applications and internal social collaborative initiatives, and then evaluate the benefits and costs against their business priorities like for any other channel or platform.

Integration of social media: The key to success is the ability to integrate social media into existing communication channels and client information systems. Clients expect a seamless experience across all various channels (e.g. in-store, online, phone and social media). It is critical to scale initiatives before implementing them rather than waiting for them to grow out of control. This also requires an investment of time and resources.

Employee access: Many employees are using social media outside of work and by developing social media guidelines, security and risk issues can be mitigated without jeopardising brand reputation. They will ensure employees know what they can and can’t do, and what information is important, private or confidential.

Learning what works: The only way to gain expertise in social media is to experiment with various applications.

Becoming a role model: CTOs and CIOs play a critical role. They have to bring the management team up to speed in social media literacy and explore collaboration tools with them. Nowadays, organisations have to take the initiative to uncover the value of social media and be proactive in identifying, assessing and developing a plan to mitigate risks so they can move forward with confidence.

What are the benefits?

Creating an ecosystem of ideas and relationships is the essence of social media. Enterprises need to understand this concept and how to capitalise on it.

From a client-facing perspective, social media can help enhance and protect personal and corporate brand reputation, target new clients and territories and increase access to just-in-time information and trends, and enable the distribution of real time information, where required.

With respect to employees, social media helps to build a dynamic and creative work environment, instantly take the pulse on critical organisational issues, enable virtual workplace solutions, promote internal communications and dialogue as well as attract and retain top talent.

What are the risks?

Though social media can’t be ignored, Luxembourg-based organisations have to be aware of the security issues in order to manage risk appropriately.

Potential risks include:

• Content created outside the internal network,
• Employee communications contrary to business position,
• Loss of confidential data, e.g. social engineering [1] may lead employees to disclose confidential data,
• Security issues, e.g.  distribution of malicious software through social media, tricking users to visit malicious websites by fake advertisements and third-party applications,
• Losing control of a situation [2],
• Growing too big, too fast and fail to manage growth and scalability,
• Raising clients’ expectations as social media requires quicker response than standard communication channels

Businesses should adopt a strategy to safeguard their corporate networks and data focusing on three aspects: processes, people and technology.

What are the main challenges for the future?

Social media is about building and strengthening relationships over many conversations and over time. In the short term, explore and build social media presence. Then, identify and engage with online influencers. Focus efforts on value-add activities. One of the most important goals is to drive traffic from website to social media communities and vice-versa.

Over the long term, organisations can influence clients’ purchase decisions through the use of social media. Word-of-mouth marketing is a key driver of increased sales, organise discussion forums to clients can provide feedback and rate and review products.

Based on these trends, it’s important to understand the opportunities and address the challenges presented by social media. So many organisations will have to:

• Define social media strategy,
• Design social media experience that creates differentiation from competitors’,
• Drive social collaboration adoption, i.e. you actively manage the adoption process,
• Create an integrated operational roadmap that identifies business and technology gaps and then selects the best solutions for the organisation,
• Execute and evolve social media programmes that you build, implement, measuring and continuously improve

Luxembourg companies and organisations of all sizes and industries will sooner or later be confronted with these challenges. Although it may be difficult to tackle them all, every organisation should determine the business opportunities of a proactively driven social media programme, and evaluate costs and risks appropriately. Specifically, when taking into account the demographic structure and socio-economic environment of Luxembourg, businesses and organisations can optimise their communication and thus enlarge their target groups with regard to age (other age groups), location (important cross-border commuter flow) and types of services promoted.

By Serge Bertoldo(Photo), IT Consulting Leader, Partner, and Christine von Reichenbach, Manager, PwC Luxembourg