IBM savings not a yardstick for social media

Can social media really be a productivity tool? IBM thinks so, but is Big Blue correct?


IBM’s announcement that it has seen £2.5m a year in productivity savings as a result of its social media policy is one of the biggest business endorsements of Web 2.0 to date.

While a few brands have trumpeted the value of social media for consumer sales, few have positioned it as a productivity tool. By no stretch of the imagination should IBM be regarded as a social media yardstick but its announcement is eye catching.

What a difference a year makes. It didn’t seem so long ago that some businesses and public sector bodies were banning social media in the workplace. As recently as October, there was a report in Germany about how 30 blue chip firms listed on DAX (the main German stock exchange) were banning Facebook and Twitter due to a mix of security fears and falling employee productivity.

IBM’s announcement therefore that it not only encourages social media use but that it has actually made productivity savings in a year is quite staggering, at least at first glance.

There are two things to consider here. Firstly, where and how were those cost savings made and secondly should this be a big green light to any business looking to embark on or increase their engagement with social media?

IBM set-up its social media policy in 2007, driven by its marketing department and desire to see IBM employees spread the IBM message across all possible social media outlets. It’s taken a while. Educating staff on how to use social media, in particular, Facebook and Twitter and developing guidelines on where and how to use it in terms of information sharing and communication is not an overnight job, especially for IBM.

Where did the savings come from? According to the company reduced travel and communication costs have been at the heart of the savings, traditional stomping ground for instant messaging and video conferencing tools.

So are these savings really down to social media? Analyst firm Forrester, which has been tasked with writing a report on IBM’s social media exploits is not specific but does suggest that “creating a cultural affinity for social media allows employees to use both internal and external tools to build relationships and identify ways to improve the business.

This creates efficiencies of scale and encourages best practices.” Very true. However businesses should not view social media as purely cost saving tools. Efficiencies are a welcome by-product but the main focus has to be improving internal and external communications as well as developing links with new partners and suppliers to create business opportunities.

Social media means different things to different people too but essentially business is about building relationships and social media accelerates the process and empowers individuals to increase their traditional network and influence. It can be a useful sales tool, a lead generator and a customer support medium but businesses need to work it out. Where will it help the business the most?

What will increased communications on Twitter with customers achieve? Are there opportunities to create links with potential new partners overseas through a social network? Perhaps new suppliers could be recommended? Would a dedicated forum provide a good platform for on-going communication with existing customers? What role can Facebook play in promoting the brand and driving sales?

Every business has to decide on how best to use social media to fit its specific requirements and nowhere does that mean measuring yourself against IBM’s cost savings. Understanding each social media tool is essential too but it’s also important to recognise the limitations. We are still at an early stage in social media development.  

Tim Berners-Lee has been critical of social networks for creating data cul-de-sacs and stifling innovation and to a certain extent he is right. Social media is still fragmented and, as Viadeo has advocated on many occasions, there needs to be a more open web, a more integrated web. Social networks could be the platform on which the future web for business is built. For companies like us, that’s the challenge, for businesses, that’s the opportunity.

Wayne Gibbins is partnerships director at professional social network Viadeo.

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