By Amit Roy Choudhury

COMPANIES which have adopted new forms of social media tools are seeing improved customer relationships and an increase in sales, according to a survey by an independent market research firm.

Speaking to BizIT, Chong Yoke Sim, Avanade's Asia business development director, however, noted that despite this early evidence, most companies have no formal plans to manage the adoption of social media or leverage its benefits.

The Coleman Parkes Research survey, titled CRM and Social Media: Creating Deeper Customer Relationships and commissioned by Avanade, interviewed 541 top executives spanning senior management, lines-of-business management, IT managers and sales and marketing executives across the Asia-Pacific region, North America and Europe.

'More than half the respondents said senior executives and IT staff are resisting adoption out of fear that it will sap worker productivity, and 60 per cent believe the management does not understand the potential social media offers to employees and customers.'

Ms Chong noted that the role of social media in transforming and improving customer relationships is becoming increasingly important for cost-conscious businesses in a globalised, highly competitive environment.

Social media technologies no longer linger outside the domain of IT departments, she added.

'Facebook, LinkedIn, blogs, wikis, instant messaging, live Web chat, short-text blogging such as Twitter, and user comments such as product reviews and submissions to sites such as Digg have combined to create a powerful means of communications, collaboration and knowledge-sharing for large and small businesses.'

The Avanade official added that the implications of this are substantial for Singapore-based companies as employees begin to bring these technologies into the workplace and as customers demand richer experiences.

Companies that understand the impact of these trends can improve their competitive position in the market, she noted, adding that 'those that do not adapt risk losing customers and falling behind in the market'.

According to the survey, more than 75 per cent of companies worldwide admit that social networking will come into the business undetected if not proactively managed.

'Under the radar of IT, end-users are currently driving the adoption of social media by bringing the technologies they use at home every day into the workplace. In particular, the younger generation of workers and customers expects the most up-to-date technology. Their demands are beginning to drive IT decisions,' Ms Chong said.

Barriers or challenges to adoption include executive apathy and IT staff fear. These are slowing corporate adoption of social media technologies.

The key barriers revealed in the study are:

Concerns about security (76 per cent);

Senior management apathy (57 per cent);

Fear of using unproven technologies (58 per cent); and

Fear of a negative impact on productivity (50 per cent).

Businesses in Singapore can apply social media and related technologies to a variety of customer relationship management (CRM)-related situations like customer contact centres, online marketing and direct sales, Ms Chong noted.

'For example, imagine if customers contacting a customer service representative could make informed choices about whether to be served by the next available service agent or choose to wait for a particular agent based on the 'wait time' involved, favourable survey ratings or expertise in resolving problems like theirs.'

Ms Chong added that the emergence of social media technologies gives companies the opportunity to change the way they relate to their customers.

'Companies need to move beyond CTM - customer transaction management - to building true relationships with their customers.'

She added that CRM needs to involve establishing a deeper relationship between companies and their customers that empowers the customer in new ways.

This pushes both parties to a more rewarding level of engagement, Ms Chong said.

She noted that there are a variety of tools available in the market that allows companies to adopt social media.

'For example, Microsoft Office SharePoint Server (MOSS) allows users to create forums, wikis, blog and RSS feeds.

'There are also tools in Microsoft Unified Communications suite that provide capabilities such as VoIP, instant messaging, audio and video conferencing, presence and contact information, etc. Of course, all the other major IT vendors also have similar tools,' Ms Chong noted.

This article was first published in The Business Times on October 02, 2008.