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CEOs Weigh Web 2.0 CRM Benefits, Risks

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Posted September 28, 2010 By Larry Barrett     Feedback

A new survey reveals that U.S. companies lag behind most of the rest of the world in embracing social media and content-sharing tools — mainly because of security risks.

The U.S. is among the countries least inclined to embrace Web 2.0 applications such as social media and content-sharing tools to drive sales and brand awareness, according to a new survey commissioned by security software vendor McAfee.

Meanwhile, businesses of all sizes in Brazil, Spain and India are actively integrating Facebook, Twitter and a variety of online collaboration apps into their customer relationship management (CRM) and marketing campaigns, a decision that's helping them grow their revenue but also creating a lot of expensive security headaches along the way.

According to the study (available here in PDF format), nearly 90 percent of respondent companies in India, Spain and Brazil are using social media despite the inherent security risks, while the U.S., Canada and Australia are lagging at the back of the pack with between 60 percent and 70 percent uptake, according to the survey of 1,000 executives at companies in 17 different countries.

Balancing the benefits of these more immediate and impactful applications against the potentially exorbitant costs of cleaning up after a data breach and the loss of control of a company's brand and reputation make these social applications a dicey proposition for businesses of all sizes.

"Web 2.0 technologies are impacting all aspects of the way businesses work," McAfee CTO George Kurtz said in the report. "As Web 2.0 technologies gain popularity, organizations are faced with a choice — they can allow them to propagate unchecked, they can block them, or they can embrace them and the benefits they provide while managing them in a secure way."

The downside of encouraging employees to track, attract and interact with customers via Twitter or Facebook can be immediate and costly, the report found.

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In the survey, six out of 10 companies queried claimed they had already suffered data breaches that cost an average of $2 million per incident, a total of $1.1 billion in losses in less than a year.

Just last week, a mouseover hack on Twitter redirected followers of the popular microblogging service to porn sites that then infested thousands of enterprise PCs and mobile devices with spam and malware.

Still, the allure of more sales — 75 percent of respondents said that the expanded use of Web 2.0 apps had created new revenue streams — can be too enticing to keep businesses from banning workers from accessing the sites.

But the price often is a public-relations ding to a company or its executives' reputation.

Sixty percent of companies surveyed said the consequences from inappropriate use of Twitter or Facebook, such as divulging of proprietary information or bashing the company or its products, is what keeps CIOs up at night.

Finally, roughly 13 percent of all companies surveyed are unwilling to risk their security or their good name and simply ban any and all Web 2.0 activity, while 81 percent restrict the use of at least one social media site or application.

Larry Barrett is a senior editor at, the news service of, the network for technology professionals.

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