Should SMBs join Web 2.0 fray?

Yes, says Ovum analyst, who notes that small and medium-sized companies can tap on Web 2.0 tools to gather information about their customers.
Written by Lynn Tan @ Redhat, Contributor

The past year has been a banner year for social networks as the popularity of sites such as Facebook, Second Life and You Tube, soared and large companies around the world including IBM and Cisco, scurried to join the fray. With the phenomenon showing no signs of abating, should small and midsize businesses (SMBs) in Asia jump on the bandwagon to tap the potential of these Web 2.0 tools?

The answer is yes, Steve Hodgkinson, research director at analyst company Ovum, told ZDNet Asia, noting that social networking is "an emerging new reality for the way people create, share and consume digital media".

Any business that has more than two staff and interacts with customers, should be learning about and exploring opportunities for social networking to "lubricate" information sharing, Hodgkinson said in an e-mail interview.

Getting started on Web 2.0

•  Identify your SMB's business needs to adopt Web 2.0 applications.

•  Start small and light.

•  Encourage open communication, and allow user behavior to evolve.

•  Monitor wikis and avoid inactive wiki pages.

•  Train employees to blog responsibly.

"Wikis, blogs and social networking platforms such as Ning, are simply innovative new ways of tapping into the power of informal social networking," he said.

While some of these tools are "purely social", there are many opportunities that SMBs could leverage for information about customers, he noted. They revolve around new product and service ideas, feedback, as well as viral marketing campaigns.

Hodgkinson explained: "The social element is what attracts people to become engaged in the dialog, [and] the business value comes from the information that is being shared."

Cochlear, a hearing implant manufacturer based in Australia, is an example of an SMB that has successfully adopted social networking technologies for its business, according to the Ovum analyst. The company uses wikis for collaboration in product development and marketing activities worldwide.

"Many SMBs are users of the wiki collaborative authoring software tools provided by companies like Atlassian and SocialText," Hodgkinson said. He noted that Atlassian's Confluence wiki has accumulated over 4,300 clients globally since its release some three years ago, while SocialText's enterprise deployments number around 3,000.

Singapore-based flower and gift retailer Far East Flora expressed interest in implementing Web 2.0 tools. Ryan Chioh, executive director of FarEastFlora.com told ZDNet Asia that while the company has not deployed any of these technologies, plans are in the way to do so.

"We are reviewing our business strategies and are looking at some possibilities of adopting Web 2.0 options into our business content," Chioh said in an e-mail interview. "In general, I do not see much of an issue with using these technologies for our business. The more important thing is, whatever we do at the end of the day, we need to make sure that there is value for our customers."

According to him, some options the SMB is considering include putting up videos of its floral classes, creating feedback channels for user comments, as well as introducing a business blog to discuss their products.

These channels are not only informative for the company's customers, but are also "more interactive and engaging" compared to current ones, Chioh said.

"To put up the videos, we will most likely host them on YouTube," he said, noting that the high cost of investment is an inhibitor for Far East Flora to consider owning a video hosting server. He added that another consideration is viewership, which is likely to be rate better on YouTube, if the content is interesting.

Chioh said, however, that "uncontrollable" factors such as Internet downtime are a concern, as "it is not within our control".

Getting started
According to Hodgkinson, companies interested to adopt social networking tools should start "small and light" and focus on their real business need. He added that these organizations should also "encourage open communication and let emergent behaviors run".

"Avoid over engineering, empty or inactive wiki spaces, 'corporate-speak' content, and the temptation to exercise traditional IT-centric control enthusiasms over users," he advised.

IBM, which has adopted several Web 2.0 technologies, shares its experience on using these tools within the organization. For instance, the company has a blog portal coined "Blog Central", that is used by its staff, said Gavin Tay, a senior IT professional and technology leader at IBM Singapore.

Anyone who wants to contribute and view employee blogs in "Blog Central" have to be registered members, Tay said in an e-mail interview. This ensures all content is traceable, especially when derogatory material is posted.

IBM has also established presence in virtual world Second Life to interact with its customers.

To help companies make their foray into social networking technologies, some IT vendors have come up with various offerings in the market. For example, telco BT last year launched a social networking and marketing facility targeted at small businesses. Called BT Tradespace, the service lets SMBs set up an online presence using a range of pre-established templates.

What to watch out for
Despite the benefits Web 2.0 technologies are tipped to offer, Ovum's Hodgkinson highlighted potential challenges that SMBs should be aware of.

"Inadvertent disclosure of commercially sensitive information in social dialogs is a risk that needs to be managed," he said, adding that employees need to be taught "what they should and should not say".

In this aspect, the new channel is no different from conventional avenues such as the phone or e-mail, the analyst said. The more "engaging" nature of the dialog increases the risk of staff "getting carried away", and this can lead to the disclosure of confidential corporate information that should not be disclosed, Hodgkinson noted.

In addition, companies should also be aware of employees who engage in purely social networking dialogs during office hours, he cautioned, but said companies that ban access to social networking sites during in the office were "overreacting".

"This is a bit like banning books, simply because there are some authors [whose views] you don't agree with," Hodgkinson said. "A better approach is to teach staff how to use the new media responsibly and to experiment with ways of benefiting from social media."

Lynn Tan is a freelance IT writer based in Singapore.

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