Only 10 percent of enterprises are realising significant improvements to their business as a result of social media investments. Despite the hype and increased investments, it seems that enterprises are still struggling to make the most of social media according to a global trend report published today by Tata Consultancy Services (BSE: 532540, NSE: TCS) — the leading IT services, consulting and business solutions organisation.
Titled Mastering Digital Feedback: How the best consumer companies use social media, the research shows that while social media is being taken seriously by most enterprises — more than two-thirds have at least one FTE committed to social media, and the average company will spend $19 million on it and employ 56 people — significant benefits are not being achieved most commonly due to information not reaching the right functions.
Satya Ramaswamy, vice president and global head of TCS Digital Enterprise at TCS, comments: “Despite ready availability of digitised consumer-to-consumer interactions in social media, its use by companies is today largely limited to being a mechanism for B2C marketing. It is time enterprises took a multi-layered approach to social media and learnt to harness its power across the enterprise in critical revenue drivers such as new product design by incorporating feedback from social media in these important business functions. Breaking down the organisational silos is key to realising the full power of social media. In other words, organisations need to be social and share internally to really use the power of social media externally.
Other significant findings from the research were:
- Only 27 percent of R&D / product development and 37 percent of product management departments regularly view social media comments from consumers. This is partly because social media activity is most commonly owned by marketing, customer services and sales. The result of siloed ownership is that only 42 percent of enterprises view their organisational structure for social media activities as effective or highly effective.
- Leaders spend an average of $28 million on social media activity; twice as much as laggards5. Leaders also go beyond just having company pages on social networks; 81 percent have corporate blogs, 77 percent have mobile apps for consumers who use social media, and 61 percent have online video channels.
- Despite only a small percentage of enterprises seeing significant business benefits, businesses are often getting a positive ROI for social media activity, 38 percent; that is more than double the number of companies with a negative ROI. However, 44 percent of enterprises have not measured ROI at all.
- The media and entertainment industry has the highest percentage of companies that have been using social media the longest to engage with consumers; most insurance companies are relatively new to social media.
- Maturity correlates with how effective enterprises are at breaking down silos, a key factor in successful social media activity. Media and entertainment enterprises are least likely to centralise activity; whereas newcomers to social media like travel, high-tech and telecom enterprises are most likely to decentralise their social media activity.
The TCS Global Trend Report on social media surveyed 655 enterprises globally with average revenues of $15.6 billion and is the fourth TCS global trend report in the series.