Unchecked Enterprise SocNet Use Puts Orgs at Risk

January 15, 2010

This article is included in these additional categories:

Privacy & Security

The proliferation of consumer-based social networking throughout enterprise organizations is creating a significant amount of security risk that needs to be better understood and carefully managed before it’s too late, according to the results of a global study commissined by Cisco, which revealed a widespread and growing need for more policies, processes and IT architecture.

The study, which was designed to assess how organizations use consumer social networking tools to collaborate externally and how such use is governed, found that the use of consumer-based social networking tools – such as Facebook and Twitter – as collaboration platforms is connecting organizations with the external world unprecedented ways.

But while these tools have the promise to better marry technology and business, link people and information, establish potential new routes to market, and enhance customer intimacy and brand awareness, the business world is still only in the early stages of identifying key challenges, such as the need for increased governance and IT involvement.

Key findings from the study are highlighted below.

Increased Use of Consumer-Based Social Networking

  • Three-fourths (75%) of the organizations participating in the study identify social networks as the consumer-based social media tools they primarily use, while roughly 50% also identify extensive use of microblogging.
  • Social networking tools are spreading into core areas of the value chain, including the marketing and communications, human relations, and customer service departments. Within marketing and communications, these tools have already become an integral part of the organizations’ initiatives, as marketing communications staff members have understood and acted on the shift from “broadcast” to “conversational” communications or rich interactions.
  • Small and medium-sized businesses are actively using social networking channels to generate leads, but this remains a growth opportunity for larger companies, according to Cisco.

The Need for More Governance and IT Involvement in Social Media Efforts

  • Only one in seven of the companies that participated in the research notes a formal process associated with adopting consumer-based social networking tools for business purposes. This indicates that the potential risks associated with these tools in the enterprise are either overlooked or not well understood.
  • Only one in five participants identified any policies in place concerning the use of consumer-based social networking technologies in the enterprise.
  • Within the respondent base, social networking governance typically involves more stakeholders than standard corporate initiatives, as these organizations have yet to define who “owns” external social media strategies. Without a single point of ownership within organizations, these initiatives are extremely difficult to control and manage.
  • Because of the unstructured nature of social networking, companies continue to struggle with policy creation and adoption, as copying an established governance process from other, more structured areas (for example, information technology) often doesn’t work for social networking. Businesses also find difficulty in striking the right balance between the social and personal nature of these tools while maintaining some degree of corporate oversight.
  • Only one in 10 respondents noted direct IT involvement in externally facing social networking initiatives. Although the IT department is typically not
    involved as a primary decision maker, respondents did recognize the need for these tools to scale and properly integrate with existing business processes
    to reap maximum benefits.

The Future of Social Networking and Collaboration Tools in the Enterprise

  • Across the board, respondents recognized that consumer-based social networking and collaboration tools will continue to evolve, as will their complexity, and that these tools will continue to influence the way business is conducted. The key for organizations will be the way they adopt and integrate these tools into the enterprise IT environment.
  • The following issues need to be addressed regarding the adoption, deployment and governance of social networking in the enterprise: when, how and what initiatives are to be launched (and not launched); how the enabling technologies should be managed; and how employee use of these technologies should be managed.

“The research findings spotlight an underestimation of the power and influence of social networks on businesses, and the transformation that companies need
to make, not only to protect themselves, but also to encourage and benefit from the collaboration these social networks and tools afford them,” said Evgeny Kaganer, Ph.D., lead researcher and assistant professor, IESE Business School. “Ignoring the increased usage and influence of social networking and Web 2.0 tools leaves organizations at the risk of misuse, potentially leading to the disclosure of information and misrepresentation of the company.”

A separate study from 2009 by Russell Herder and Ethos Business Law yielded findings that sync with Cisco’s. That study found that although 70% of US marketing, management and HR executives say they plan to increase social-media use at their companies, more than 80% say they are concerned about the risks, and many do not have policies or training in place to avert reputation mishaps or lost productivity.

Another study, by Nucleus Research, found that companies that allow their workers to access to Facebook during business hours lose an average of 1.5% in total employee productivity.

About the research: The study is the first of a two-part series that Cisco has commissioned to explore the impact of social networking and collaboration applications in the enterprise. It is based on extensive interviews with 105 participants representing 97 organizations in 20 countries around the globe. Conducted between April and September 2009, the research was carried out by business schools in the US and Europe: IESE Business School in Spain, E. Philip Saunders College of Business at the Rochester Institute of Technology in the US, and Henley Business School in the UK.

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