Social Media Usage in Purchasing And Other Enterprise Applications

Business operations such as purchasing, order management and others can benefit from social media capabilities such as collaboration, sharing, communication and transparency. At present the most common applications of social media in the enterprise are in marketing, branding and general collaboration. One of my favorite examples of social media marketing is Fashion TV’s  Youtube channel.  I believe that areas beyond marketing and communication can also leverage social media capabilities and behavior.

This post answers the question “how businesses can use social media” by listing social media’s main characteristics, highlighting user behavior, providing a methodology for evaluating how social media can benefit enterprise operations and finally describing an example of how social media can help an organization’s procurement operations.

Clearly social media tools such as Facebook, Twitter and LinkedIn are gaining incredible popularity among individuals – for example, Facebook  just confirmed 750 million registered users.  While social media applications gained traction as consumer applications (i.e., for individual users) business applications are emerging. Examples of business applications are Youtube for marketing, Facebook for branding, Twitter for customer service and Yammer and Salesforce Chatter for internal collaboration. While marketing, branding and collaboration are the most common applications of social media today, I posit that other areas such as procurement, order management, manufacturing, human resource etc. can also gain significant benefits from social media. The key to success will be using the core capabilities and behavioral aspects in a way to meet the business objectives of each operational area.

First, lets look at the main CAPABILITIES of social media:

  1. Content is user-generated: content, such as comments and conversations, is created by individuals, instead of being seeded by the enterprise.
  2. Anyone can contribute: as long one is a member of the network (e.g., Facebook, Twitter) one can contribute a wide variety of unstructured content such as text, pictures, video and audio.
  3. Anyone can access: a member can access content for which the member has permission.
  4. Sharing: members can easily share content with other members
  5. Transparency: the ease of contribution, access and sharing enables an organization to make more information available
  6. Security: permission for contributing and accessing content is based on permission levels.
  7. Conversation and relationship: social media enables individuals to have a dialogue with an organization, leading to a closer relationship and increased trust
  8. Speed: contribution, sharing and communication happen very quickly with minimal latency.
  9. Integrated networks: content can be shared across networks such as from Twitter to Facebook to Youtube.
From a BEHAVIORAL perspective social media has changed the nature of interactions between users and organizations. Here are some examples of behavior fostered by social media:
  1. Sharing: users are willing to contribute content that will help other members
  2. Transparency: individuals can get more information from organizations
  3. Communication: users can easily connect to each other and to organizations
  4. Conversation: social media enables users to have a dialogue with organizations
  5. Speed: sharing and communication happen almost instantly, similar to the speed of short messaging service (SMS) and instant messenger (IM)
Now we can answer the question regarding how social media can benefit business operations. Let me use procurement as an example. Let’s start with some of the core objectives of procurement:
– streamline process of buying products and services
– lower cost of products
– improve quality of products
How would social media help meet and exceed these objectives? Let’s take each objective and determine how to apply social media.
  1. streamline process: what if a user could easily share information such as “I just ordered a new iPad”? Other participants such as approvers and reviewers can use the notification to expedite the process and have a conversation with the user.
  2. lower cost of products: what if a  purchasing agent could share a PO with multiple vendors? The vendors could engage in a conversation with the agent and the vendor with the lowest bid would gain the business.
  3. improve quality of service: what if users could use the conversation aspects to  provide feedback to vendors? Vendors can use the feedback to provide quicker resolution to problems.
These are examples of how social media capabilities and behavioral aspects can help purchasing operations. You can apply the same methodology to evaluate how social media can help other operations such as order management, manufacturing, human resources or recruiting. Notice that I have not specified any specific tools such as Twitter or Youtube. The key is to use the architectural components such as messaging, users, content and security to configure and construct social media applications.
Can you think of how social media can be used in your area?
Use the following METHODOLOGY:
– determine business objectives of your area of operations
– figure out how social media capabilities will help meet objectives
– configure and build applications
Which operations in your organization can benefit from social media?
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