Friday, April 3, 2009

The Value of Social Networks

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Last week, I hinted at a new research publication by IBM, MIT, and NYU where they scientifically proved the value of social networks for the enterprise. Now, we actually have the research to back ROI discussions of social software!

Many studies on social networks have been published to show that certain types of networks are optimal, but there has never been a large-scale study that shows what the real dollar value of social networks is. And literature on networks within a single organization tends to be focused on small, static networks. The study is an integrated analysis of financial capital, human capital, and social capital using SmallBlue network data.

They linked anonymized network data with anonymized corporate financial revenues at the employee and project level. Read the study to find out:

  • The dollar value of each person in your ego network and your 3-degree network
  • How a diverse network impacts financial success of a project
  • The cost of "too many cooks" on a project
  • ...and many other interesting findings!

This social network value work was fully conducted inside IBM and jointly published with researchers in MIT Sloan Management School.

Here's a great quote:

The study suggests that today's generation -- accustomed to electronic social networking practically from the cradle, using instant messaging, texting, emails, Facebook, Myspace, and Second Life -- is well positioned for a workplace in which meaningful connections to multiple and diverse social networks spread over a wide area.

Are you ready ? You can get all the materials from the research study from this IBM Research Extranet page: The Value of Social Networks. The actual research paper can be downloaded from here: Value of Social Network -- A Large-Scale Analysis on Network Structure Impact to Financial Revenues of Information Technology Consultants.

Additionally, there's a presentation that summarizes these results.

The Dollar Value of Social Network -- IBM Social Network Analysis Community Seminar April 3, 2009.

Now you have something to read for the weekend!

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