The internet and its many children have spawned a revolution in the way people buy things, talk about things, complain about things, and interact with the businesses which supply those things. And this revolution is, of course, not over yet. It is still very much a work in progress.

Twitter, Facebook and YouTube have changed the social scene for millions of people. And, when they enter the marketplace – as consumers or employees – they naturally apply their experience of social media to their new adult environment of buying, selling and working. The result is not just a new social scene but a new business scene too, and one with many new opportunities and pitfalls. Marketing professionals, unless they want to become ex-marketing professionals, are embracing social media with a greater sense of urgency. Sometimes adroitly with good results and sometimes clumsily with bad ones.

But where does the CIO come in? Isn’t the whole topic one best left to your marketing, sales and customer service people? I would argue emphatically no, but first let’s review a bit of background, and especially how the rise of social media has drastically altered the balance of power between big organisations and individual consumers.

In the old days, if your service engineer failed to turn up, or your insurance company refused a claim, or your holiday hotel turned out to be a crapper, you could try working the phone or more likely, write a letter of complaint.  Today things are different. You can use Facebook to publish your complaint, using words, pictures or videos  to crucify those responsible, very publicly and indeed to an audience of millions.

What’s more, there have been widely publicised examples of complaint against large corporations getting instant worldwide publicity through millions of hits and sometimes even clobbering the share price of the company involved. People have always been social: they have always trusted the opinions of family and friends more than the claims made by sales or advertising people. The difference today is that private opinions and experiences can go global in minutes.

All of which is precisely why the new discipline of Social Customer Relationship Management (sCRM) has been developed and expanded over the last few years. It seeks to devise ways to counter the risks and threats posed by social media and to exploit the opportunities they bring. It takes on board the new buying patterns created by the Internet, and the new buying influences that affect choice online. For example, these include hotel reviews on, book and film reviews on and opinions expressed by real and virtual friends on social media.

Early exponents of sCRM saw social media as simply another place to advertise, to push out messages from the one to the millions. The generally disappointing results reflected the lack of understanding of social media as essentially interactive, peer-to-peer phenomena. But increasingly, those with real understanding of sCRM are reaping massive benefits from their insights.

I recently met with a small UK start-up whose business is prepaid SIM cards. Their runaway success has come from abandoning traditional business models and using social media to boost their marketing, sales and customer service to their customers. Customers receive cashable credits for recommending the products to friends. They also run the help-desk, receiving credits for every question they answer via the interactive online forum – no call centre, no big call centre cost base.

Big companies too are winning benefits. For example, if you log into Amazon with Facebook Connect, you allow Amazon to access your Facebook profile which contains information on your taste in books, films or holidays and those of your friends, plus of course their birthdays - so that the company can make timely and sensible recommendations. Good for you, and good for Amazon.

CIOs surely need to reflect on what such massive changes in information flows mean for their organisation and their role. I would suggest two areas that need urgent attention:

  • First, there is the contrast between the ease and convenience of Facebook, YouTube and Twitter and the perception of difficulty and complexity in using corporate IT applications. It’s a gulf that is becoming increasingly unacceptable for users. So perhaps you need to sit back, try to put yourself in their shoes, fool around on Facebook, and ask yourself if the criticism you might find there is valid in the case of your company.
  • Second, you need to be aware of the re-emergence of private sCRM initiatives by individual members of staff – in marketing or customer services. Such initiatives can produce excellent results. But their uncontrolled spread of information brings many risks. Setting guidelines for how information is handled in an age of social media is surely a task in which the CIO must have an important say.

But first you must, of course, pass the Twitter test yourself.

To check whether you could, I’d suggest an upcoming seminar in London, Social CRM Strategies for Business, at which US guru Paul Greenberg – often called the Godfather of sCRM – is the main speaker.