One year ago I wrote my bachelor thesis on social media and business strategy alignment. This thesis is a literature research and offers a solid theoretical and historical background for the definitions of web 2.0 and social media. I also developed the first steps towards a social media strategy and governance framework.

By publishing my thesis in parts on my blog i received much feedback in the reactions and on twitter. Special thanks to Michiel Hartman for pointing out that the evolution of web 1.0 to 2.0 hasn’t been a linear process.

You can download the ‘The alignment of web 2.0 and social media with business strategy’ (van der Weel, A. T. ,2009) pdf here.

For those who want to read the short summery and conclusions I included them here at the end of the blogpost. I also added the references for those who are interested in finding more academic research papers on social media and business strategy.

Research questions

Corporations trying to adopt and use web 2.0 and social media applications in their business, raises the question of how organizations can use these in extend to their strategies.

• How should web 2.0 and social media be approached and how can organizations align these web 2.0 and social media developments with their organization strategy?

To answer this question the following sub questions need to be answered:

• What is web 2.0 and social media and what are good definitions?
• How can social media be approached and used by organizations?
• How can social media be aligned with the business strategy of organizations?

Short summary

I expanded existing academic theory on ‘Possible uses of the World-Wide Web for business’ by adding customer service as the main new opportunity offered by web 2.0 and social media.

My literature research identified two frameworks that can be used to analyze web 2.0 and social media. One is the ‘Technology-Centric view of IT in Business’ (Dhar & Sundararajan, 2007), which presents technological invariants and consequences in business. This framework can be used for fundamental analysis of the building blocks and consequences of web 2.0 and social media.

The ‘Strategic alignment model’ (Henderson & Venkatraman, 1993) indicates the importance of a functional and strategic fit between business and IT. Together with the the ‘Value Disciplines’ framework (Treacy & Wiersema, 1993) these frameworks can be used to align organization business strategy with social media and web 2.0.

The Value Discipline that express the business focus on organization or department level can be used to guide the focus of the social media strategy. While the thesis mainly looks at the business strategy of the organization as a whole, it can also be used for departments to align their social media strategy.

In the end the researched frameworks come together to present my ‘social media governance framework’ which looks at the internal and external dimensions and the usage channel of social media in the organization. It can be used to align new social media projects with business strategy or to analyze the strategic fit of current social media projects in the organization by placing them in the matrix.

Conclusions

Web 2.0 was identified after the dot-com crash and is a collection of technologies, services and platforms. Key to business in web 2.0 is the ‘harnessing of collective intelligence’ often also called the ‘power of the crowd’. Social media can be defined as ‘the collective goods produced through computer-mediated action on web 2.0 services and platforms’. When focusing on the business uses social media encompasses these services and platforms that can be used by organizations. Social media and web 2.0 are greatly driven by modularity and result in the creation of large IT platforms and computer-mediated spaces.

Like internet, social media can be used for: Publicity, marketing and advertising, direct online selling, research and development, communication, collaboration and customer service. E-services helped identify the customer service path as a new business use after the dot-com crash and rise of web 2.0. Enterprise use of social media mostly focuses on reaping benefits from internal communication and collaboration cross traditional organizational hierarchies. Social media can be approached from an inward(internal) e-commerce perspective or from an outward(external) e-service perspective e-strategies depend on the approach.

For investments in social media to be effective corporations need to have an alignment between social media (IT) and business strategy. Also the strategic fit between the internal and external IT domain needs to be considered. The social media governance framework I present helps identify how different types of organizations should deploy social media applications depending on the purpose and business strategy in the internal or external domain. Alignment between the social media (IT) and business strategy occurs by using the value disciplines of an organization to formulate social media strategies. I argue that operational excellence organizations should have a focus on internal use of social media and that customer intimacy organizations should have a focus on the external use of social media. With the growing importance of social media in organizations, social media should become part of IT governance in organizations top management to support the alignment.

References

• Anderson, Paul (2007). What is Web 2.0? Ideas, technologies and implications for education. JISC Technology and Standards Watch, Feb.
• Brzozowski, Michael J., Sandholm, Thomas and Hogg, Tad (2009). Effects of Feedback and Peer Pressure on Contributions to Enterprise Social Media. GROUP‟09, May 10–13, Sanibel Island, Florida, USA.
• Cockburn, C. and Wilson, T. D (1996). Business Use of the World-WideWeb. Vol. 16, No. 2, pp. 83-102.
• Dhar, Vasant and Sundararajan, Arun (2007). Information Technologies in Business: A blueprint for education and research. Information systems research, vol 18, No. 2, pp. 125-141.
• Eichen, Marc (2006). Value disciplines: a lens for successful decision making in IT. EDUCAUSE Quarterly, Vol. 29, No. 2. pp. 32-39.
• Gartner research (2008). The Enterprise Social Software Market Continues to Expand. 30 May.
• Gurbaxani, Vijay and Whang, Seungjin (1991). The Impact of Information Systems on Organizations and Markets. Communications of the ACM, January Vo1.34, No.1.
• Henderson, J.C. and Venkatraman, N. (1999). Strategic alignment: Leveraging information technology for transforming organizations. IBM systems Journal 38, 2/3 pg. 472.
• Lai, Vincent S. and Wong, Bo K (2005). Business types, e-strategies, and performance. Communications of the ACM, May Vol. 48, No. 5
• O’Reilly, Tim (2007). What Is Web 2.0: Design Patterns and Business Models for the Next Generation of Software Communications & Strategies no. 65, 1st quarter.
• Hoegg, Roman, Meckel, Miriam, Stanoevska-Slabeva, Katarina and Martignoni, Robert (2006). Overview of business models for Web 2.0 communities, Proceedings of GeNeMe: 23-37
• Kochan Thomas A., Useem, Michael (1992). Transforming organizations. Oxford University Press US http://books.google.nl/books?id=qU96bV4OtdgC.
• Raghupathi, W. RP (2007). Corporate governance of IT: A framework for development. Communications of the ACM , August Vol. 50, No. 8.
• Rai, Arun, Patnayakuni, Ravi and Patnayakuni, Nainika (1997). Technology Investment and Business Performance. Communications of the ACM, July Vol. 40, No. 7.
• Rust, Roland T. and Kannan, P.K. (2003). E-service: a new paradigm for business in the electronic environment. Communications of the ACM, June Vol. 46, No. 6
• Smith, Marc, Barash, Vladimir, Getoor, Lise and Lauw, Hady W. (2008). Leveraging Social Context for Searching Social Media. SSM‟08, October 30, Napa Valley, California, USA.
• Tracy, M. and Wiersema, F. (1993). Customer intimacy and other value disciplines. Harvard Business Review 71 (1), Jan/Feb, pp. 84-93
• Valacich, Joseph and Schneider, Christoph (2009). Chapter 6 Enhancing Collaboration Using Web 2.0 in Information Systems Today: Managing the Digital World, Prentice Hall; 4 edition (March 13)

Related posts:

1. Business Strategy and Social Media (IT) alignment – Thesis part 3
2. Business types and approach to use Social Media – Thesis part 4
3. Business use and Definitions of Web 2.0 and Social Media – Thesis Part 1