The average internet user now spends three hours a week on social-networking sites, according to research organisation YouGov. That adds up to six days a year, and makes social networking more popular than online banking, shopping or music downloads.
However, with growing popularity comes growing distrust, according to Steve Prentice, director of research with Gartner. "Every new technology platform is derided as frivolous in the early days," he said. "And, certainly, you would struggle to do a classical ROI analysis and see any benefit of using Facebook or LinkedIn within the enterprise."
There is a common perception that people simply have too much fun using Facebook or YouTube, said David Bradshaw, an analyst with Ovum. "People use Facebook to find a date, or LinkedIn to find a job — but certainly not to do their current jobs better, in most cases," he said. "There's a reason why people call it 'social not-working'."
So, is social networking simply a productivity threat or can companies learn to live with Facebook and its ilk? "My gut instinct tells me that we're going to end up with a Facebook for the enterprise, or Facebook in the enterprise," said Bradshaw. "There's too much at stake for organisations not to start looking at bringing this stuff under their control."
For starters, companies are realising that levels of communication are increasing on social-networking platforms — outside the control of the corporate IT department. In addition, companies have a lot to gain from social networking, according to some experts.
There are some pretty obvious benefits to using social-networking applications as a business tool, according to Graham Cluley, senior technical consultant with security firm Sophos. "It's a great research and recruitment tool," he said. "You can check people out, see what their career history is like, who they associate with, even what their conduct might be like outside the office."
However, Cluley said that the benefits of social networking could be taken a step further. "If you look at Facebook, it's a platform, and you could easily develop applications to sit on top of that, to do virtually anything around collaboration," he said. For example, firms might consider creating a messaging application that workers can log onto while on the road, or a quick reference guide for employees that pulls in links as part of news feed.
Crucially, social networking provides a ready-made knowledge-management platform, said Bradshaw. "In an increasingly competitive world, the most valuable asset companies have is their knowledge, and the one thing this type of platform lets you do is find people with the knowledge you need, and use those skills better in collaboration with other people."
Wasn't this what knowledge management was designed for? "Yes," said Bradshaw — but few employees are using enterprise knowledge-management tools. "The reality is that people might use the knowledge-management tool to accomplish very specific processes, but only where the corporate manager says they have to," he said. "Very few organisations benefit fully from knowledge management because it's not a tool people choose to use. In fact, I'd say the term 'knowledge management' is pretty much discredited."
The difference between enterprise collaboration platforms and social networking isn't simply to do with user attitudes. "Social-networking platforms are a very different beast to enterprise collaboration tools, whether that's something like SharePoint or MSN," said Elisabeth O'Donnell, international director with social-networking site LinkedIn. "We don't provide actual collaboration on documents, or the ability to free-form chat — but social networks provide an overlay of relationships on top of business applications that Microsoft's collaboration packages don't have."
If a company is interested in really using social networking to improve knowledge sharing and collaboration, it's important to understand that social networking is about more than just MySpace, Facebook and Bebo. "There are dozens of social networks out there, and many of them are about as far from frivolous as you can get," said Prentice.
Viadeo is an example of the new breed of business-focused social-networking sites. Its three million members use the site to find partners, suppliers, funding or employees, said Peter Cunningham, country manager for Viadeo UK. "On our site, most profiles are linked closely to a business, and they're written to promote a business, or as an invitation for potential partners and clients," said Cunningham. "The idea is to use social-networking technology to enable members to share non-core business advice and information."
For example, Viadeo members in France have used the platform to find overseas distributors for products. This is easier to do in a social-networking setting because the site allows for precise keyword searching, and...
...the network includes dozens of "business hubs and clubs" which can provide introductions to trusted partners and suppliers, Cunningham explained. Other members have used the site's video and other features to provide tutorials, advertisements and demonstrations of their own products, and linked to external websites and blogs from their profiles. "It's another way to market yourself and your business to the right people," stated Cunningham.
Of course, the most widely known business social-networking platform is LinkedIn, which now has 1.5 million members in the UK and 15 million members worldwide. The site focuses entirely on building networks between professionals, and has members in 96 of the top 100 FTSE companies, according to LinkedIn's O'Donnell.
Although LinkedIn has a reputation for being used primarily by people looking for a new job, O'Donnell said the platform has many other uses for business networkers. "What we encourage people to do is to solve business problems using the network," she said. LinkedIn has an answers service through which users can post business questions and receive responses from anyone on the network. Users can link questions and answers to their LinkedIn profile, and post these onto public forums. "If the chief technology officer at Southwest Airlines answers a question about travel, you know he probably has a good idea what he's talking about," said O'Donnell, "whereas the guy next to you in the office might not have done any business travel in years."
LinkedIn is also widely used by professional services firms and people in sales and marketing functions to research potential clients rather than cold calling, O'Donnell added. LinkedIn members can search the network by name and job title and, once they have found the correct contact, they can see if they have any links that connect them to that person. "Rather than just calling switchboard and asking for Bob Smith in HR, now you can contact your colleague and ask them to introduce you to Bob, and you've become a recommended link. The result is that he is way more likely to take your call, because you've come recommended," O'Donnell said.
Whichever social-networking platform you opt to use, it's important to get the ground rules right. "There should absolutely be a policy, and remember: anything that isn't written down is just rumour," said Cluley. "So make sure that people know what is expected of them in terms of using privacy settings, and what information is and isn't appropriate for sharing."
Cluley recommended that companies weigh up carefully the risks of using a public social-networking tool against the anticipated benefits. "In some cases, it will be that the risks are great enough to justify building your own social-networking application internally," he said. "Never forget that when you're using Facebook for business communication the data is only as secure as Facebook makes it. You're putting your data in the hands of a third party and you should make the same checks you would on any other third party handling corporate data."
However, analysts agree that this sector is changing rapidly and the coming years are likely to see the lines between enterprise software and public networking sites becoming blurred. "The challenge the mainstream suppliers face at the moment is that the tools they offer have the right functionality but they aren't elegant or intuitive," Prentice said. "But it's something they are definitely working on."
Bradshaw expects to see big announcements in the coming months as enterprise vendors announce products that will sit within the popular networking sites. "Vendors are definitely looking at how people collaborate in social networks, and looking at how to use those capabilities," he said. "I expect some big announcements from surprising quarters. But we shouldn't be surprised if vendors take on board the social networks — they would be foolish not to."
Case study: j4b — social networking for small businesses
One company that is taking advantage of social networking already is j4b, a UK web-based service that provides small businesses across Europe with information about grants and other funding opportunities.
"Essentially we provide a database that people can search for information on all kinds of grants, soft loans and venture capital," explained Peter Crosby, business development director with j4b. "The information is updated daily, and otherwise those companies would have to search through dozens of websites and directories manually to try and find this information."
However, earlier this year, j4b saw an opportunity to use social networking to extend their business and provide customers with more services. The information provided through the website was fairly one-dimensional, said Crosby, and relied on j4b knowing what their clients wanted to hear about.
Before launching a service, j4b did some detailed market research which showed that the majority of clients were interested in talking to other businesses in similar situations to their own. "People were massively interested in virtual communities," said Crosby. "There is no doubt they wanted to lead the agenda, and not simply be fed news by us."
After researching a number of options, j4b opted to use a public social-networking platform as a cheaper and faster alternative to building their own service. "We invited users to join a social network run on Viadeo, and 700 of them joined within two days — and it was a case of a 60-second sign-up process," said Crosby. "Because grant applications are quite complex and many of our customers are small businesses, they were incredibly keen to have a forum where they could share information and advice between themselves."
Using the social network helps customers but also provides j4b with valuable insights into their customers' needs, Crosby added. For example, several clients on the networking platform were discussing challenges around applying for funding for agricultural projects in Northern Ireland, an area that the site previously didn't cover. "That kind of thing gives us a better idea of what they want to talk about," said Crosby.