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How do users quantify return on investment (ROI) of a social business? By its very nature, social technologies are more free-forming, making their potential exponential, yet unpredictable. Werner Lindemann, VP of global technology solutions, IBM sub-Saharan Africa explains.
A successful social business can incur both external and internal benefits.  Internally, companies can see ROI almost immediately. Compound the application of analytics to social business initiatives, where actionable insights from social networking sentiment anytime, anywhere can be gained and put to work in real-time, and businesses have the recipe for success.
How do users measure the “soft” benefits then?
Internal or “soft” benefits such as greater employee collaboration, streamlined communication or improved product development, are clearly beneficial for an organisation. Yet, these benefits cannot be quantified as easily as heightened customer satisfaction and skyrocketing sales.
Focusing solely on forms of new revenue or sales resulting from social engagements means organisations are overlooking some of the main components of social business ROI. More attention must be paid to shifting the nature of work and structure of businesses and the impactful results organisations incur by making such transformational changes.
Companies that are seeing real business value from social capabilities are doing more than launching an ad-hoc Twitter campaign or throwing up a corporate Facebook page. They are embedding social tools into business processes, enabling the business as a whole to become more strategic, engaged, transparent and nimble.
Social tools combined with a culture of collaboration enable a more effective workforce – across all departments within an organisation. By enabling employees to locate experts quickly and collaborate across geographically distributed teams, employee productivity and engagement is higher.
This, in turn, leads to benefits such as reduced expenses related to travel or speedy development of new products or sales approaches.
At the crux of every business is the need to attract new customers and retain existing ones. Imagine a call centre for a large national bank where all customer inquiries are funneled through one general number.
Social enterprise tools enable customer service representatives to work more efficiently and provide higher-quality service as there is more immediate access to content and expertise within the organisation. By streamlining this process, there is a better customer experience, deepening customer loyalty and boosting future sales.
As knowledge and idea sharing increases, the rate of innovation is accelerated, an important asset to businesses now more than ever. Moving from idea sharing sessions with a handful of c-level executives behind closed doors, to collaborative and transparent brainstorming across a company, leads to shortened product development cycles and improved revenue streams.
The days of turning a blind eye to social tools are gone. Companies that have adopted social practices and tools early on to create a more collaborative work environment are gaining competitive advantage in their market and becoming more profitable.
It is important to remember that users are still in the early years of social business and like any innovation, they need to track what they’re doing and continue to evolve the technologies and practices before they can truly have a barometer to measure ROI. As social businesses evolve, we’ll continue to see numerous studies around the ROI of social and just how transformative this cultural and technological shift can be.