CIOs squander social business opportunity

One of the great paradoxes of the revolution now being called “social business” is the near total lack of participation by the corporate group that led the last great corporate revolution.

That group is the information technology (IT) organization. In the late 1990s, corporate IT departments helped evangelize a new discipline called enterprise resource planning (ERP) that enforced best-of-breed practices on business management by encoding them in software. ERP made businesses and supply chains more efficient, and it has been adopted by almost every major U.S. company. Many chief information officers (CIOs) saw their personal stocks rise as a result.

But when it comes to social business, most CIOs are running the other way. Early this year The Economist conducted a survey for Pulsepoint Group that asked 329 business leaders about who has primary responsibility for social business in their organizations.

Not surprisingly, marketing topped the list, but IT wasn't even among the six other groups mentioned.

The same survey found that only one in six organizations has infused social business throughout the organization, a best practice that management consulting company McKinsey & Co. has endorsed, saying that “fully networked enterprises are not only more likely to be market leaders ... but also use management practices that lead to [higher] margins.”

Again, the IT groups that could enable this transformation don't even want to be in the game.

Having spent more than 20 years in IT media, I've taken a special interest in this phenomenon, and I've had the opportunity to speak to several groups of CIOs about it. At an event just a couple of weeks ago the organizers went around the room and asked the executives in attendance to free-associate the words that come to mind when they hear “social media.”

Among the answers were “productivity drain,” “time-waster” and “security threat.”

Are all these perceptions true? Yes, to some extent. Have we heard them all before? We sure have. Personal computers, email, the Web and mobile devices also were widely dismissed by corporate technologists for the same reasons. Today these technologies are the fabric of business.

No corporate group is better positioned to manage the adoption of social technologies, and to calculate the business value, than corporate IT. Technology organizations enjoy unique visibility into the tools that their business-side constituents are using for customer interaction because they support all those technologies.

As measurement experts, they're qualified to integrate data from customer service, marketing and external data sources to help business constituents build profiles that are far richer than anything we have ever known. Their skills at filtering and summarizing massive amounts of information are particularly well-attuned to the problems many organizations face in managing and interpreting unprecedented amounts of raw information.

There is a crying need for those skills. Less than 15% of companies are measuring the financial results of social networking technologies and almosty 60% aren't applying any ROI analysis to their marketing budgets at all, according to a March 2012 survey of 253 marketing decision-makers by Columbia Business School and the New York American Marketing Association. The need for cross-functional leadership based on hard metrics and rigorous analysis has never been greater.

Meanwhile, the group best positioned to deliver this value sits on the sidelines and clucks about lost productivity. What a waste. What a pity.

Paul Gillin is an Internet marketing consultant and the author of three books about social media. He also writes the New Channels column in BtoB.