Like many a good dad before him, when his 20-year-old son Andrew recently told him he wanted to buy a used car, Cam Murray offered to take him out and visit the car lots. But the response wasn’t what he expected. “He looked at me like I had three heads,” said Murray, CIO of Fidelity Investments Canada.
Keen on buying a Nissan 240SX, Andrew went on a global social-networking site for Nissan users, where he checked out blog posts and retrieved all sorts of information on models, years and what to look for. Then he visited a site for used cars in the Toronto area, found out what 240SXs were available, and began online chats with several Nissan owners. Narrowing his focus to two cars, he was now ready to go out with his dad to look at them. Taking pictures of them with his cell phone, Andrew returned home and posted them on the Nissan users’ site, where he got input on how expensive it would be to repair the rust and fix the other problems each car had. Finally, those on the social-networking site collectively decided on which car was probably the best value for the money. Then Andrew went out and made the purchase.
Watching all this was something of an epiphany for Murray. “It made me reflect on the new era we’re in,” he said. “Clearly, the new employee, the new investor, the new investment advisor of the future is going to conduct business totally differently than the way I thought.”
Murray has plenty of company when it comes to gaining a new appreciation for the power of social networking. IT executives across the country are beginning to realize that for business, it’s a game-changer.
This article looks at how social computing is impacting the strategy and operations of three companies in Canada.
Procter & Gamble Canada
Consumer products giant Procter and Gamble is ahead of the curve in using social networking externally while trying to modernize its approach to these tools internally.
“The digital space has exploded, so consumers are no longer happy being talked to; they want to be talked with. They want to have a conversation. And the nice thing about this space is that you can have a one-to-one connection with your consumers,” said Susan Doniz, P&G’s CIO, Global Business Services, Canada.
The company already has several years experience in reaching out to Canadian customers through social media. In particular, it has looked at ways of leveraging the blogging community. One of its first forays into the blogosphere involved Pampers diapers. New moms, expectant moms and moms in general are among the most active communities online, so three years ago P&G Canada created a blogging area on its Web site and opened it up for postings from mothers.
“We had a blogger who was going through her first child and she’d write about it and a discussion would happen,” said Phil McBride, IT Manager, Global Business Services, speaking at the recent CIO Exchange in Toronto.
The blogging area kept the company’s legal team up at night for months, grappling with such questions as: Do we take down a post that’s unfavourable to the brand? Do we have a responsibility to take down a post that’s not only unfavourable but also irresponsible?
The company went a step further in the blogging space, bringing some of the more popular mommy bloggers in and asking them what they liked or didn’t like about Pampers, knowing full well that they would go back and post about it, and the company would have no control over what was said.
“We didn’t try to buy them off by giving them free diapers,” said McBride. “Basically it was just trying to listen to them and say, ‘Hey, you wrote that you don’t think it fit your child well. What do you mean?’
Tapping into the external world turned out to be a big learning experience for the company, according to McBride.
P&G’s ultimate goal is to find the most effective ways to connect with consumers so that they buy the product. In order to find this out, the company is looking at many different mediums and exploring many different methods for listening to its customers.
“There’s a different paradigm now. No longer do companies just buy advertising space and put a commercial up on air. They are looking not just to communicate but to entertain and maybe to involve people in their product,” said Doniz. “At P&G, our tagline is ‘Touching Lives, Improving Life’. That’s a very deep statement. That’s not selling Tide or Pampers; it’s going beyond that. And that’s the conversation we’ve been trying to have with our consumers.”
As the social networking space has technology underpinnings, the IT department tends to be the initial owner of it in most companies. But as Doniz noted, “Once you start to peel the onion, it’s about marketing. It’s knowing who your who is online.”
So where does that leave the IT department? At P&G, it still has a big role to play. The company is in about 170 countries and it uses agencies and other partners to listen to chatter and find out what’s being said on the Web that P&G should know about.
“What we do in the IT shop is try to bring scale to that. Instead of every country trying to figure out how they can listen to different spaces, we can apply ideas from different countries and turn them around on a dime,” said Doniz. “Perhaps we’re on the leading edge of understanding something [in one of these countries] and doing some of the analytics around it. At a certain point we say, ‘Okay, how can we make this a reproducible, rescalable result that brings us great results all the time?’ That’s what’s powerful about the work we do within the IT sector.”
Listening to Canadians
Canadians don’t buy as many of P&G’s products online as they buy books or electronics, but they love to do research online, so the company sees Canada as an excellent place to do digital marketing. Tim Penner, president of P&G Canada, raised some eyebrows last year when he announced that the company would increase online spending in 2009 to 20 percent of the overall marketing budget.
“When you look at other companies, that’s a pretty aggressive target,” said Doniz. “We’ve been really trying to figure out the ROI on all of this so that we get the best bang for our buck.”
Canada is a world leader when it comes to the amount of time its citizens spend on the Internet, which makes it a good place for testing online strategies. Because of this, P&G actively pilots programs here and feeds the results back into its global agenda. The IT group at global headquarters in Cincinnati will sometimes give its Canadian counterparts the ball on an online initiative and let them run with it.
The company has several distinct groups that are focussed on each element of digital marketing. “We’ve broken it down into several areas, like e-capabilities,” said Doniz. “Some groups within that area focus on the online search, for example. How do you optimise that? Who is researching online? Then we have other groups who are focussed on just how do you listen to the chatter of people.”
Even though it excels in the social networking space externally, P&G has lagged somewhat in using it internally. The company’s objective internally is to drive faster decision-making. Social networking tools are well suited to that task, enabling employees to get at information in real time and improve collaboration through the use of things like wikis and blogs.
Its best tool in this regard is PeopleConnect, an easy-to-use Facebook-like Web 2.0 platform, based on Talligent’s online community application. PeopleConnect gives employees the feel of being in a small company. They can put their own blogs up, join wikis, and form their own groups. The groups are not locked down – they’re open for everyone to listen to or collaborate through.
PeopleConnect is largely intended for IT employees, but a project is now under way in Canada to expand it for use by the whole organisation.
Doniz believes that when it comes to social media, you have to take the time to learn what works. “Just because people are off blogging, it doesn’t mean that it’s going to have any impact. You have to know what you are trying to achieve and whether or not you are going to achieve that on a blog,” she said. “It’s not: build it and they will come. You have to have a true understanding of how people work and how they think, and then use that to drive what social media choices you make.”
TD Bank Financial Group
When it comes to adopting new technology, banks tend to be more tortoise than hare, adhering to the philosophy: slow but steady wins the race.
Though “social computing is coming at us fast and furious”, said TD Bank Financial Group’s Dave Codack, VP Employee Technology & Network Services, the company is taking a cautious approach, using wikis and doing a modest amount of blogging, microblogging and podcasting.
“You can’t be ignorant about these things. You can’t just decide you’re going to block them,” said Codack. “You’ve got to learn how to accommodate them because there are huge business benefits with customers and huge productivity gains with employees. And the demographics are changing such that it’s hard to ignore it as a mode of operation.”
Though it’s taking a cautious approach, TD is now starting to look at ways of expanding its use of these new technologies. “We’re now at the stage where we’ve looked at the enterprise components that would apply to this broad thing called Enterprise 2.0 or social computing, and we’re starting to look at our decision-making framework,” said Codack. That includes whether or not to allow certain social computing tools; how they’re used; can they be used internally or externally, etc.
At this point the business hasn’t articulated how it wants these technologies to be used to its advantage. The company is now trying to foster a cohesive thought process in the business to start thinking about the business value. At the same time, Codack is trying to create an infrastructure that can address those needs when required. Currently, he is spearheading the formation of a committee to determine the bank’s decision-making framework around social computing technologies.
“Having such a framework would be a great enabler that would allow us to be more responsive to the business needs. For example, when someone comes to me with a requirement involving Twitter, I can say, ‘Yes, we’ve looked at it, and Twitter is okay,” he said.
Because the decision-making framework takes a risk-based approach, the framework committee includes representatives from legal, compliance, operational risk and information security, along with a few business people.
The working group will look at ways of applying a risk quotient to initiatives involving social computing. The objective is to create a scale that provides a weighted average of the risk. Below a certain point on the scale, the risk would be considered acceptable – in other words, it could be adequately governed, tolerated or mitigated. Above that point, the risk would be deemed too high to allow the initiative to move forward.
If it is decided that technologies out in the global community bring with them an unacceptable level of risk, then the next step is to think about how they might be created internally.
“IBM and Cisco have done a very good job in this regard,” said Codack. “They’ve developed their own internal sites similar to Facebook, YouTube and Flickr, so they have the capabilities of those social media technologies but they don’t worry about the security because they have a perimeter around it.”
For TD, the question then becomes: do we take an approach similar to those companies, or do we decide that the business value doesn’t warrant such an effort?
Another group within TD, made up of line of business people and some risk people, meets monthly to talk about what the company is doing around internal social computing capabilities. For example, how is the company’s internal equivalent to Facebook evolving? What’s happening around collaboration tools – what do they look like and how are they finding their way into the environment?
“This group looks at all the capabilities from a business-value perspective, and then we drive change that way,” said Codack. The dedicated employees that staff TD’s Internet Business Office also look at business value and are key drivers on this group.
Over the last six months, TD has put in a lot of effort in an attempt to get ahead of the social computing wave, but clearly it isn’t there yet.
“If I fast-forward another year, I think we’ll be in a far better place,” said Codack, “If you look at the other channels – the online, the ABM, the phone channel – we don’t have that comfortable convenient experience that we have in the retail environment. So there’s a big push in this direction, and when you start looking at the application of social mediated technologies in the online world, there’s a huge capability that we can begin taking advantage of when we interface with our customers to drive that consistent experience.”
Fidelity Investments Canada
Watching his son’s extensive use of social networking tools in buying a car has helped convince CIO Cam Murray that these tools are changing the world dramatically. Now he’s bent on assessing the implications of this, both internally and externally, for Fidelity Investments Canada.
“As users of the future, our expectation will be not to have to wait for information. We will want people to accommodate our schedules, not theirs,” said Murray. “The online world is the perfect vehicle for that, and that’s what’s going to have to be made available by all companies, seven by twenty-four, whether it’s through online chats, better Web sites for disseminating information, or whatever.”
Murray believes the dramatic change will extend to the workplace, where employees will rely routinely on a variety of social networking activities, such as online chatting and blogging, to collaborate and build solutions.
Already such changes are happening at Fidelity, where the traditional morning meeting, put together by product and marketing staff, has undergone a complete metamorphosis, turning first into an email, then a conference call, and finally a video presentation, which staff throughout the company can view at their leisure at any time during the day.
There’s good underlying technology behind the video capture, but the process was a simple one. “We just put high-definition cameras in the room, store the resulting video on our servers, and let people dial in.”
The natural follow-on to this would be providing video commentary to external customers in the form of a podcast or something similar. “As customers get ready for work in the morning they could listen to our economist talk about where we think the market is going,” said Murray. “We could push that information out or at least make it so that people can pull it more easily. We’re evaluating that space right now.”
Enthusiasm is growing within Fidelity for the opportunities presented by social networking. People are excited about it and the IT organization is having a bit of a struggle trying to slow things down a little so that any initiatives in this area are properly supported.
“We want to make sure that whatever we’re doing there’s security around it, that the infrastructure can support it, and all those things,” said Murray. “I wouldn’t say that we’re holding them back, but we’re trying to curb their enthusiasm a little. We want to make sure that we build it in a way that’s reliable and sustainable for the future. One instance of somebody having a bad experience could turn them off forever. So you’ve got to make sure that it’s robust; that your content is up to date and it’s changing – it’s not stale.”
Internally, Fidelity uses blogs and wikis as a means of collaboration. One of its biggest successes has been with a social networking tool called Innovation Station, where employees can post their ideas on a variety of subjects, from product and marketing ideas, to cost-efficiency, to creating a greener workspace. The real value of Innovation Station comes from the refinement of ideas as other employees comment on them. The original nuggets often grow and become much more valuable as others provide their input.
Murray believes there are many more opportunities to leverage social networking tools internally, particularly around the workspace and how information is presented. Recently, he was put in charge of operations, so he is now responsible for the company’s Canadian call centres as well as systems.
“Having both of those areas, I can see that there are great opportunities to merge the technology worlds and the operations worlds and come up with some solutions to issues,” said Murray.
One of those issues is the huge amount of information that call centre staff have to deal with while speaking with the customer. With so many different and complex types of products to deal with, staff can get bogged down looking for information and waiting for it to pop up on their screen.
“With Web 2.0 tools, there’s a great opportunity to present that information in a more concise format, which means average call-handle times are going to be down, you won’t have any dead air time, and you’ll improve client satisfaction. So that will be a big focus for us in the next two years.”
Externally, Murray sees a big challenge in managing the new streams of information that will come from social networking initiatives.
“If you do open it up to the world to provide input on your organization and products and service levels, how do you cypher through that and find that needle in the haystack? Which are the ones you want to pursue? I think it means that structurally organizations are going to have to change,” he said.
Murray is convinced that social networking will have a profound effect on the way companies do business. As an example of this, he pointed to the recent decision by General Motors to cancel its Buick crossover, based largely on the many negative comments on the model that appeared on Twitter.
“They spend millions developing a new model, and then they cancel it. It’s pretty gutsy but it just shows you the power of what we’re seeing now – people having input into these products, and shaping them, and wanting to have input into how you design things,” he said.
“For financial services, it will mean getting input directly on how to construct a mutual fund that will appeal to the end investor. It’s going to be fascinating.”
