Your CEO's Next Information Problem

The social media phenomenon has arrived at the enterprise, and it's keeping HR, the General Counsel, and many IT executives up at night. Whether sanctioned or unsanctioned, social media technologies are gaining momentum in business strategy as a means to engage employees and customers.

The consequences of this shift haven't been fully realized, but what is clear is that there's more to it than figuring out Twitter and Facebook.

New technologies are rapidly dismantling any remaining barriers to sophisticated content creation by anyone, both at work and at home. On average, at least 60% of this user-generated content has a measure of business value or risk—if not to the enterprise, to a partner, or another, unrelated business. Seventeen percent of all content created at work is flowing through noncorporate channels, like Gmail, Twitter, and Facebook, leading to potential value loss or risk exposure. Moreover, the content that stays inside the enterprise is loosely organized, if at all.

Left unresolved, this situation fundamentally threatens IT's ability to prepare the enterprise for economic recovery. A majority of capital-constrained organizations' IT budgets are still focused on core platforms, like ERP and CRM systems and those systems are capturing a decreasing share of enterprise knowledge. In fact, only 15% of content created at work is entered into structured systems.

Lost in the buzz around social media are a few key principles that will define winning companies in a changing technology environment:

1. Can you be the Google or Bing of your enterprise? Rethink the capabilities to which you're allocating your budget today. In a world of "exponential content," competitive advantage will run to the IT organizations that can most rapidly search, identify, and organize content with business value—or that which poses a business risk. Can you swiftly apply—and reapply—a method to find and sift content for relevance, whether for opportunity identification, trend analysis, or "surgical" risk mitigation? How quickly can you impose clear structure where no structure exists on content after it is created?

2. We're all knowledge workers now. Assume that everyone in the enterprise creates content and that a share of that content will have some measure of value and risk. Does your organization spend enough time educating everyone to discriminate the value and risk in information they create or receive? Consider whether social media channels, tagging, and "social incentives" might reinforce the content filters of the individual so that more people direct risk to where it can be safeguarded and value to where it can be mined.

3. What constitutes the enterprise "commons"? The rise of new social media and productivity platforms (e.g., SharePoint) has led to an unsustainable, ungovernable proliferation of channels in which content can be created, stored, and disseminated in the enterprise. How many channels exist in your organization today, and how siloed are they? How do they measure up to external channels for ease of use? Consider whether the content creation capabilities you have today can be directed toward a limited number of manageable channels, and whether end users are incentivized appropriately to use them.

Before it's here, it's on the Bloomberg Terminal.