What's the Difference between Social Media and Social Business?

A major change is taking place in social media these days: Leading-edge companies are moving from "liking" to leading.

Social media has become an extension of traditional paid media with many companies broadcasting messages -- from traditional to innovative. The next step will be much deeper as the leaders recognize that social engagement is an opportunity to redefine the client service experience, be proactive in delivering customer care and differentiate in new ways.

We call this social business. And just as social media like Facebook, Twitter, and Pinterest changed the flow of information by helping people share insights, opinions, and news with anyone anywhere, social business is changing the way people connect with companies and their own employees and how organizations succeed.

What is a social business? It's an organization that integrates social technologies with critical business processes to improve the productivity of its workforce and create exceptional customer service.

For example, in a social business, employees are smarter, more loyal, and engaged because their organization uses social networks, collaboration systems and shared messaging services. A "social" approach enables employees around the world to tap into each other's expertise and connections. Companies can attract top talent and give employees the social tools they need to work together. Executives can layer analytics on top of social technologies to make sure their companies have the right skills and expertise to meet market demands.

A social business is also one where customer service is exceptional because the company reaches out to customers through social networks, Twitter and blogs in innovative ways and acts on the insights it pulls together about consumers. That way, customer service teams have the insights and the analytics they need to predict and resolve problems before they happen. Companies can dish up more targeted offers to customers and respond more quickly to their problems. R&D can gain new sources of inspiration and insight from customers and employees so that the products customers want are the ones that get to market.

For instance, the language instruction company Berlitz wanted to encourage its 12,000 employees worldwide to share skills and knowledge. The company replaced a hodgepodge of internal sites created for different geographic regions with a collaborative, company-wide platform. By pooling the expertise of its workforce, Berlitz is now able to identify regional products and best practices that can be applied more broadly worldwide and slash the time it takes to develop new products.

Children's Medical Center of Dallas is using social technologies to improve care and give parents the tools they need to manage their child's health outside of the hospital. The Center created a private online community where patients and their families can communicate with doctors, access their medical information and relevant information about their conditions, and join communities of patients with similar illnesses.

The reason these organizations are pushing social business ahead is because the benefits are clear. Today, 66 percent of companies use social business initiatives to find information more quickly, increasing productivity, but in two years that number is poised to spike to 84 percent. And in a market where acquiring a new customer can cost six to seven times more than keeping a current one, they can help improve customer loyalty through more targeted service.

Social tools also give businesses a way to inventory and share employee expertise company wide. After all, when a typical company loses 10 to 30 percent of its capabilities every year through employees retirement or attrition, what it's losing isn't just people -- it's knowledge.

Social media redefined what it means to be connected. Leading-edge companies know they can't afford to relegate these technologies solely to peoples' personal lives.

For more information about how IBM views social business, click here.