Social Network Risk and Opportunities

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1. Megatrend and Background
Megatrend:
Social Networks
Background:
As social networking sites are gaining popularity, these networks have started defining our family, businesses, or personal life over social websites. These social networks have changed the way we interact for the better and have led to a whole new culture. Some of these networks like LinkedIn, Facebook, MySpace, Orkut, and Twitter have become a social identity for people who are known by their identity on these networks. The advantage of joining different social networks is that is increases communication between friends, professionals, and businesses. Social networks have enabled people to interact irrespective of where they are located. All that is needed is an internet connection to update one's network with their latest activities. For professionals social networks have become a way to enhance their career. It has also become a means to authenticate one's credibility by recruiters.
2. Key Result Areas
Key result areas with Social Networks are:
Administration: Premium administrative tools would provide users full control of their Social Network. Administrators in a company which uses Social Networks can:
• Manage user accounts and edit permissions in a simple easy to use interface
• Disable downloads and use of certain applications depending on corporate security
• Create custom logo and color theme to match corporate branding
• Create a list of banned words which if typed by employees will not be visible to the community
• Create custom profile questions for users to complete on their profile page
• Create custom password policy for employees
• Send broadcast messages to quickly reach all employees
• Add customized company terms of service and privacy in addition to those required by Social Networks
• Designate specific IP addresses for accessing Social Networks from Corporate network
• Prohibit any file attachment based on its extension
Human Resources: Social Networks can be used as an effective tool for recruitment in most organizations. In fact, social networking has already gained popularity for sourcing and recruiting employees in an organization. This approach has been useful to a handful of recruiters, but its mass adaptability needs to be studied before companies diverge from conventional tools to social networking approach. The psychology of recruiters who consider Social Networks as an effective tool for recruitment is:
• By connecting to a Social Network he or she would get an easy access to a wide pool of talent
• Another assumption made is that communities with similar background are more likely to link each other.
Sales & Marketing: By understanding social networks, marketers can better understand user behavior and to some extent influence it. There are three distinct types of groups members of social networks. These are:
• Low status members: These are not well connected to others and purchase of one member generally does not affect other members to make similar purchase.
• Middle-status members: These are moderately connected and are strongly and positively influenced by friend's purchases
• High-status group: These users are very actively connected to each other but show strong negative effect due to friend's purchases because they want to remain distinct. This group is more into non-purchase related activities rather than purchasing.
The impact of low-status group on company's revenues is negligible whereas from middle-status group, revenues increase marginally. For the purpose of advertising to influence consumer purchases, companies can advertise on Facebook and accept a very low click-through rate, or give away free products to several Facebook members and generate a viral campaign. It is researched that such viral campaigns indeed benefit companies in generating consumer interest.
Research & Development: R&D is always guided by business, technology, and innovation strategies which are realized by manifold enabling mechanisms like people, ideas, communication networks, funds, and cultural elements (Innovation networks, n.d). Different phases of research can be linked with different communication networks as these phases require different communication networks. While internal communication is easy as it is within a densely connected network, communication beyond organization project boundary is complex and is prone to misunderstanding. The networks in R&D can be distinguished according to their level of individual, organizational, or institutional (societal) knowledge management processes as follows:
Network levels R&D Process R&D Objective
Collaborations Integration Resource complementary, reduce risks, pool resources
Institutional/Organizational Linkages Value creation, long-range planning
Individual Creations Knowledge creation, creativity, and inquiry

Technical Support & Implementation: Virtual communities are most obvious manifestations of social networks based on new media technology. However, these communities are complex to understand and companies seeking these networks in their corporate structure require technical support and implementation. For implementation of social networks, functionalities and design can be chosen and a comprehensive end-to-end technology solution adapted. This ensures highest security standards as well as superior performance of the social network within the corporate setting.
3. Identify and describe scenarios that may occur in that area over a twenty year horizon.
By 2040, the use of Social Networks will become a powerful tool for companies to share information within similar groups, and its use will increase by 200%.
4. Analyze the risks and opportunities for that scenario that will drive an entity or market affected by that scenario
KRA Risk & Opportunities
Administration  Analysis of results
 High cost/benefit returns
 Billing type
 Cost to fund/Investment risk
Human ...