Chapter 8 Social Media Information Systems Jason C

Chapter 8 Social Media Information Systems Jason C. H. Chen, Ph. D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258 chen@gonzaga. edu Dr. Chen, Management Information Systems

“It’s All About Eyeballs” • New owner wants to change way PRIDE is used and make it more profitable. • Number of eyeballs to look at ads and clicks to generate revenue. • Will PRIDE actually work? • Need to describe it to potential vendors. • Carefully think about details of how system will function before estimating development costs or project timeline. Dr. Chen, Management Information Systems

PRIDE Application Prototype • Generating revenue from social applications difficult, but possible. • Not all social media applications involve Facebook or Twitter. • It's all about marketing. • Think about ways of applying new, emerging technology to accomplish business organizational strategies. Dr. Chen, Management Information Systems

Study Questions Q 1: What is a social media information system (SMIS)? Q 2: How do SMIS advance organizational strategy? Q 3: How do SMIS increase social capital? Q 4: How do (some) companies earn revenue from social media? Q 5: How do organizations develop an effective SMIS? Q 6: What is an enterprise social network (ESN)? Q 7: How can organizations address SMIS security concerns? Q 8: 2026? Dr. Chen, Management Information Systems

Q 1: What Is A Social Media Information System (SMIS)? • Social media (SM) – Use of ____ IT to support content sharing among networks of users – Enables communities, tribes, or hives – People related by a common interest • Social media information system (SMIS) – Supports sharing of content among networks of users Dr. Chen, Management Information Systems

Social Media Is a Convergence of Disciplines Fig 8 -1 Social Media Is a Convergence of Disciplines Dr. Chen, Management Information Systems

Number of Social Media Active Users Fig 8 -2 Number of Social Media Active Users Dr. Chen, Management Information Systems

Three SMIS Roles Providers • Social Media _____ – Facebook, Google+, Linked. In, Twitter, Instagram, and Pinterest provide platforms – Attracting and targeting certain demographic groups • ____ Users – Both individuals and organizations Communities • _______ – Mutual interests and transcend familial, geographic, and organizational boundaries Dr. Chen, Management Information Systems

SM User Communities Fig 8 -3 SM Communities Dr. Chen, Management Information Systems

Social Media Application Providers • Facebook, Twitter, Linked. In, Google • Sponsors might pay a fee, depending on application and what they do with it – Creating a company page free on Facebook, but. . . – Charges fee to advertise to communities that “Like” that page • Custom developed SM for company using Share. Point for wikis, discussion board, photo sharing Dr. Chen, Management Information Systems

Social media (SM) communities differ from communities in the past because SM communities are ____. A) formed based on family relationships B) limited by geographic location C) formed based on mutual interests D) limited by organizational boundaries Answer: ______ C Dr. Chen, Management Information Systems

Five Components of SMIS Dr. Chen, Management Information Systems Fig 8 -4 Five Components of SMIS

SMIS Is Not Free • Costs to develop, implement, and manage social networking procedures • Direct labor costs for employees who contribute to and manage social networking sites • 92% of companies use social media to recruit (93% from Linked. In) • 73% hired using social media, and one-third have rejected candidates because of something on their social profiles Dr. Chen, Management Information Systems

Q 2: How Do SMIS Advance Organizational Strategy? • Strategy determines value chains, which determine business processes, which determine information systems. • How do value chains determine dynamic processes and thus set SMIS requirements? • SM process flows cannot be designed or diagrammed, they constantly change. Dr. Chen, Management Information Systems

Q 2: How Do SMIS Advance Organizational Strategy? Porter’s 5 -Forces Strategy determine Value Chains structured/ dynamic SMIS Dr. Chen, Management Information Systems Business Processes Information Systems

SM in Value Chain Activities Which activities are likely supported by structured process? ______ Manufacturing and operations Dr. Chen, Management Information Systems Fig. 8 -5 SM in Value Chain Activities

Which of the following statements is true about social CRM? A) Customers likely to generate the most business get the most attention from the organization. B) All the customer relationship processes in social CRM are structured and controlled. C) Each customer crafts his or her own relationship with the company. D) Though relationships emerge from joint activity, companies control the customers. C Answer: ______ Dr. Chen, Management Information Systems

Social Media and the Sales and Marketing Activity Dynamic, SM-based CRM process • Social CRM • Ø Each customer crafts relationship – Wikis, blogs, discussion lists, frequently asked questions, sites for user reviews and commentary, other dynamic content Ø Customers search content, contribute reviews and commentary, ask questions, create user groups, etc. Ø Not centered on customer lifetime value Dr. Chen, Management Information Systems

Social Media and Customer Service • Relationships emerge from joint activity, customers have as much control as companies • Product users freely help each other solve problems • Selling to or through developer networks most successful – Microsoft's Most Valuable Professional (MVP) program • Peer-to-peer support risks loss of control Dr. Chen, Management Information Systems

Social Media and Inbound and Outbound Logistics • Social media can be used to provide numerous solution ideas and rapid evaluation of them • May provide better solutions to complex supply chain problems • Facilitates user creates content and feedback among networks needed for problem solving • Loss of privacy a significant risk • Problem solving in front of your competitors Dr. Chen, Management Information Systems

Social Media and Manufacturing and Operations • Designing products, developing supplier relationships, and improving operational efficiencies • Crowdsourcing – Non-employees voluntarily participate in product design or product redesign • Widely used in businesses-to-consumer (B 2 C) relationships to market products to end users • You. Tube channel and post videos of product reviews and testing, factory walk-throughs Dr. Chen, Management Information Systems

Social Media and Human Resources • Employee communications using internal personnel sites – Ex: My. Site and My. Profile in Share. Point • Used for finding employee prospects, recruiting candidates, candidate evaluation • Place for employees to post their expertise • Risks: – Forming erroneous conclusions about employees – Becoming defender of belief or pushing an unpopular management message Dr. Chen, Management Information Systems

Q 3: How Do SMIS Increase Social Capital? • Capital – Investment of resources for future profit • Types of business capital Physical – ____ capital: produce goods and services (factories, machines, manufacturing equipment) Human – _______ capital: human knowledge and skills investments Social – _______ capital: social relations with expectation of marketplace returns Dr. Chen, Management Information Systems

What Is the Value of Social Capital? • Value of social capital Ø Number of relationships, strength of relationships, and resources controlled • Adds value in four ways: 1. 2. 3. 4. Information Influence Social credentials Personal reinforcement - professional image or status Dr. Chen, Management Information Systems

How Do Social Networks Add Value to Businesses? Progressive organizations: • Have Facebook, Linked. In, Twitter, other SN sites. • Encourage customers and interested parties to leave comments. • Risk – encouraging excessively critical feedback. • Klout score - measure of individual’s social capital. Dr. Chen, Management Information Systems

Using Social Networking to Increase the Number of Relationships Dr. Chen, Management Information Systems Fig 8 -6 Growing Social Networks

Using Social Networks to Increase the Strength of Relationships • Strength of a relationship – Likelihood other entity (person or organization) will do something that benefits your organization • Write positive reviews, post pictures of you using organization’s products or services, tweet about upcoming product releases, and so on • Organizations strengthen relationships with you by asking you to do them a favor Dr. Chen, Management Information Systems

Using Social Networks to Connect to Those with More Resources • Social Capital = Number of Relationships __ × Strength of Relationship __ Entity Resources × • Huge network of relationships with people who have few resources may be of ____ less value than a smaller network of relationships with people who have substantial resources • Resources must be relevant • Most organizations ignore value of entity assets and try to connect to more people with stronger 80/20 Rule? relationships. ______ In IS development teams, social capital may improve the willingness and ability of team members to coordinate their tasks in completing a project. Dr. Chen, Management Information Systems

When a student attends a business function for the purpose of meeting people and reinforcing relationships, he or she is investing in his or her ____. A) human capital B) process capital C) social capital D) structural capital C Answer: ______ Dr. Chen, Management Information Systems

So What? (p. 304) Facebook for Organizations… and Machines • Chatter, by salesforce. com, to connect employees and customers via social media • Organizational communities identify and solve problems more quickly and more effectively than before • Readily find and recruit needed experts within organization to help solve problems • Faster project collaboration • Internal-facing communities use social media to make organizations better Dr. Chen, Management Information Systems

Q 4: How Do (Some) Companies Earn Revenue from Social Media? • Hyper-social organization – Use social media to transform interactions with customers, employees, and partners into mutually satisfying relationships with them and their communities • You Are the Product – “If you’re not paying, you’re the product. ” – Renting your eyeballs to an advertiser Dr. Chen, Management Information Systems

Q 4: How Do (Some) Companies Earn Revenue from Social Media? • Hyper-social organization • Transform interactions with customers, employees, and partners into mutually satisfying relationships with them and their communities. • You Are the Product. • “If you’re not paying, you’re the product. ” • Renting your eyeballs to an advertiser. • Monetize Dr. Chen, Management Information Systems

How Do (Some) Companies Earn Revenue from Social Media? Revenue Models for Social Media Ø is a specific way to generate “revenue” or “profit” • Advertising • Pay-per-click • Use increases value: The more people use a site, the more value it has, and the more people will visit. • Freemium revenue model: _______ FREE Advantage – Offers users a basic service for free, and then charges a premium for upgrades or advanced features Dr. Chen, Management Information Systems

Does Mobility Reduce Online Ad Revenue? • By 2018, number of mobile devices is expected to reach 10 billion • Mobile data traffic will increase eleven-fold • Average click-through rate of smartphones is 4. 12%, but just 2. 39% on PCs Conversion • ______ rate – Frequency someone clicks on ad makes a purchase, “likes” a site, or takes some other action desired by advertiser Dr. Chen, Management Information Systems

Does Mobility Reduce Online Ad Revenue? (cont'd) • PC ad clicks ______ more effective, on average, than mobile clicks • Clickstream data easy to gather • Android users far more likely to click and convert on Facebook ads than i. Phone users • Mobile devices unlikely to kill Web/social media revenue model • How best to configure the mobile experience to obtain legitimate clicks and conversions Dr. Chen, Management Information Systems

____ measures the frequency that someone who clicks on an ad makes a purchase, "Likes" a site, or takes some other action desired by the advertiser. A) Pay-per-click B) Conversion rate C) Folksonomy D) Enterprise 2. 0 B Answer: ______ Dr. Chen, Management Information Systems

Fig. 8 -8: Mobile Ad Spending • Mobile users click ads more often and generate more revenue. • Design problem: How best to configure mobile experience to obtain legitimate clicks and conversions? Dr. Chen, Management Information Systems

Q 5: How Do Organizations Develop an Effective SMIS? • Focus on being cost leader or on product differentiation • Industry-wide or segment focus • Premeditated alignment of SMIS with organization’s strategy • Next slide shows process of developing a practical plan to effectively use existing social media platforms Dr. Chen, Management Information Systems

Q 5: How Do Organizations Develop an Effective SMIS? cost leader or on • Focus on being _____ product ______ differentiation • Industry-wide or segment focus • Premeditated alignment of SMIS with organization’s strategy • Next slide shows process of developing a practical plan to effectively use existing social media platforms Dr. Chen, Management Information Systems

Social Media Plan Development 1. Define Your Goals 2. Identify Success Metrics (KPI) 3. Identify Target Audience 4. Define Your Value 5. Make Personal Connections 6. Gather and Analyze Data Dr. Chen, Management Information Systems Fig 8 -9 Social Media Plan Development

Common SM Strategic Goals Goal Description Example Brand Awareness Extent that users recognize a brand Organization’s brand mentioned in a tweet Conversion Rates Measures the frequency that someone takes a desired action Likes the organization’s Facebook page Web Site Traffic Quantity, frequency, duration, and depth of visits to a Web site Traffic from Google+ post mentioning the organization’s site Extent to which users User interact with a site, Engagement application, or other media User regularly comments on organization’s Linked. In posts Fig 8 -10 Common SM Strategic Goals Dr. Chen, Management Information Systems

Common SM Metrics Goal Metrics Brand Awareness Total Twitter followers, audience growth rate, brand mentions in SM, Klout or Kred score Conversion Rates Click rate on your SM content, assisted social conversions Web Site Traffic User Engagement Visitor frequency rate, referral traffic from SM Number of SM interactions, reshares of SM content Fig 8 -11 Common SM Metrics Dr. Chen, Management Information Systems

Q 6: What Is an Enterprise Social Network (ESN)? • ESN – Software platform uses social media to facilitate ______ cooperative work of people within an organization – Improve communication, collaboration, knowledge sharing, problem solving, and decision making • Enterprise 2. 0 – Use of emergent social software platforms within companies, or between companies, partners or customers Dr. Chen, Management Information Systems

Enterprise 2. 0: Mc. Affee's SLATES Model Fig 8 -12 Mc. Afee’s SLATES Model Dr. Chen, Management Information Systems

Changing Communication • Communication channels within corporations changed in equally dramatic ways – Using ESNs, employees can _______ bypass managers and post ideas directly for CEO to read – Quickly identify internal experts to solve unforeseen problems Dr. Chen, Management Information Systems

Deploying Successful Enterprise Social Networks • Organizations still learning how to use and successfully deploy ESNs • Develop a strategic plan for using SM internally via same process as used for external social media use • Assess likelihood of employee resistance Dr. Chen, Management Information Systems

ESN Implementation Best Practices Fig 8 -13 ESN Implementation Best Practices Dr. Chen, Management Information Systems

Q 7: How Can Organizations Address SMIS Security Concerns? social media 1. Need a ______ policy employee 2. Consider risks from non-____ user-generated content 3. Look at risks from employee use of social media Dr. Chen, Management Information Systems

Managing the Risk of Employee Communication • Develop and publicize a social media policy – Delineate employees’ rights and responsibilities • Intel's Three Pillars of SM Policies 1. Disclose 2. Protect 3. Use Common Sense Dr. Chen, Management Information Systems

Intel’s Rules of Social Media Engagement Fig 8 -14 Intel’s Rules of Social Media Engagement Dr. Chen, Management Information Systems

Managing the Risk of Inappropriate Content • User-generated content (UGC) • Problems From External Sources – – Junk and crackpot contributions Inappropriate content Unfavorable reviews Mutinous movements Dr. Chen, Management Information Systems

If the content posted on a social networking site represents reasonable criticism of an organization's products or services, the best response would most likely be to ____. A) leave it B) edit it C) delete it D) report it Answer: _____ A Dr. Chen, Management Information Systems

Responding to Social Networking Problems • Leave it • Respond to it • Delete it “Never wrestle with a pig; you’ll get dirty and the pig will enjoy it. ” Dr. Chen, Management Information Systems

Internal Risks from Social Media • Threats to information security, increased organizational liability, and decreased employee productivity • Directly affect ability to secure information resources • Seemingly innocuous comments can inadvertently leak information used to secure access to organizational resources – Not a good idea to tell everyone it’s your birthday because your date of birth (DOB) can be used to steal your identity Dr. Chen, Management Information Systems

Internal Risks from Social Media (cont'd) • Employees may inadvertently increase corporate liability when they use social media – Sexual harassment liability – Leak confidential information • Reduced employee productivity – 64% of employees visit non-work-related Web sites each day. – Tumblr (57%), Facebook (52%), Twitter (17%), Instagram (11%), and Snap. Chat (4%) Dr. Chen, Management Information Systems

In the context of CRM, which of the following statements is true about the foreseen changes and developments by the year 2025? A) Vendors might lose control of customer relationship. B) Organizations might lose control over employees. C) The use of social media for managing employees will be static. D) The control over culturally-diverse customers would be lost. A Answer: ______ Dr. Chen, Management Information Systems

Building a Social Business Strategy A social business strategy is • A plan of how the firm will use social IT, aligned with organization strategy and IS strategy • A vision of how the business would operate if it seamlessly and thoroughly incorporated social and collaborative capabilities throughout the business model IT is the technologies used for people to collaborate, – Social ____ network, and interact over the Web. business is the enterprise use of social IT for business – Social ____ applications, activities and processes. media refers to the marketing and sales applications of – Social ______ social IT. networking is the user of theses types of social IT tools in – Social ______ a community. Dr. Chen, Management Information Systems

A social media policy used by an organization is a statement that ____. A) delineates employees' rights and responsibilities B) lists a firm's products and services that are advertised on social media C) lists the social and environmental effects of a company's economic actions D) defines the type of medium and channel an organization uses on a social media site A Answer: _______ Dr. Chen, Management Information Systems

Q 8: 2026? • New mobile devices with innovative mobile-device UX, coupled with dynamic and agile information systems based on cloud computing and dynamic virtualization. • BYOD policy • Organization the endoskeleton, supporting the work of people on the exterior. – Employees craft own relationships with their employers. • Non-routine cognitive skills more important. Dr. Chen, Management Information Systems

• END of CHAPTER 8 Dr. Chen, Management Information Systems