Business Value & Crowdsourcing

Here we have it, my final blog post.

Within this blog we will look at the impact that social media has on economy and communities, the role of social technologies in enabling value creation within businesses, what the term crowdsourcing means and how it is used, as well as the drivers and inhibitors of social media use for businesses and what the benefits and drawbacks might entail.

As the adoption of social media within businesses soars too levels much higher than ever seen before, significant impacts on economy and communities can be observed. One such impact involves the revenues collected from advertising across different social media platforms. Due to the high amount of online traffic, social media websites are ideal places for advertisers to promote their business and their product. This has led to a large economic impact; for example, before YouTube was bought by Google, they declared approximately US$15 million a month was being made from advertising. These sorts of large figures are common across the major social media platforms, but also smaller blogs are generating revenue from advertising as well.

The reason this type of activity is so successful for advertisers is because social media has become so commonplace in the everyday life of many people, therefore, very large amounts of people can be reached at once.

The escalation of social media technology use in society these days also poses some negative impacts. There are negative impacts on established industries that cannot compete with online services. For example, some gaming services cannot compete with the gaming that is offered online – which is also often free, and industries such as the post office, which increasingly less people are using for communication purposes, also faces the threat of becoming obsolete.

The power that social media users hold to promote or demote a businesses reputation, or their ability to conjure new ideas for business through feedback from many people, is invaluable for the purpose of enabling value creation with in businesses.

It is through this acknowledgement of the power of social media users that the concept of crowdsourcing has been born. Crowdsourcing can be defined the way Jeff How phrased it:

“(Crowdsourcing is) an effort to leverage the expertise of a global pool of individuals and organisations, often across disciplines and sectors, generally enabled by the web, to as quickly and cost-effectively as possible develop and implement creative solutions to innovative challenges.”

Crowdsourcing; it has various uses. These include discovering knowledge and managing said knowledge in a relevant way. There is also the broadcast search approach, which is usually applied when regarding empirically provable problems. There is also the peer vetted creative production approach, which sees crowds developing and sifting through design ideas. And lastly, distributed human intelligent tasking involves crowds analysing large quantities of data when there is no computer software capable of doing such a task any more efficiently.

Social media is a tool that can be used by businesses to create value for themselves and to redefine what it means to experience success with consumers. But that’s just it, social media is a tool, not a means to an end. For that reason, it is clear there are many drivers for businesses to use social media technologies, but in order for them to experience success they not only need to adopt the tools, they need to be able to use them correctly.
A study by Gartner has revealed how enabling collective human behaviours can lead to value for enterprises. The specific collective human behaviours required are:

  • Enable collective intelligence for operational effectiveness
  • Employee expertise location for sales effectiveness
  • Unearth emergent structures for operational effectiveness
  • Increase sales through interest cultivation
  • Engage in mass coordination for rapid response
  • Build relationship leverage for brand awareness

 

By understanding the importance of harnessing these concepts and by putting them into practice, rather than simply deciding to implement social media within a business, will see business and organisations create much more value and experience greater returns on investments.

At this stage, there should really be no inhibitors for businesses in regards to introducing social media into their business strategy, as those who choose not to adopt social media technologies will be left trailing behind the early adopters, and who knows if there’ll ever be a chance to catch up.

Also, the benefits, such as cost efficiency, a broader reach to consumers, opportunities to crowdsource for ideas, enhancing business value – to name a few – certainly outweigh the drawbacks of time consumption and the possibility of failure.

The most important concept that can be taken from this blog in my opinion, is that social media is a tool, and like tools it can be used incorrectly, or it can be used for maximum benefit. It is vital that business learn the ways to use social media as a tool to gain the maximum benefit for their employees and for their organisation.

 

So, there we have it. My final blog post. I have certainly learnt a lot bout how businesses use social media networks and I know I will continue to use this knowledge into the future.

I hope you have enjoyed my blog, For blog’s sake!

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