Sanjaya Krishna, KPMG LLP Advisory Principal, Contract Compliance
John Hair, KPMG LLP Advisory Director, Risk and Compliance

It is critical to have control mechanisms in place to  manage your organization’s social media activity—and to understand your risks in the adoption and use of this rapidly evolving business enabler.  KPMG is assisting out client organizations in consideration of the risks inherent in undertaking social media efforts, particularly for firms in more highly regulated industries such as banking, financial services and insurance, healthcare, and life sciences.  It is also important for organizations employing third party service providers to support their core operations.

Providing workforce guidance on which aspects of their working life are appropriate to include in their personal social media postings has been widely considered.  There are many good examples of how organizations are providing internal staff with guidelines outlining expectations in areas such as:

• The need to respect copyright and intellectual property laws
• The need to avoid disclosure of company information such as client names or financial results
• Encouragement to use disclaimers when posting commentary on professional matters
• Avoidance of making internal staff or management issues public

One area that may escape consideration in social media governance is the application of risk management principals to organizations employing third party service providers, such as those providing IT and business process outsourcing services.  It is of equal importance to apply the same guidelines to staff members located in these service provider organizations as to internal staff.  When you consider that these providers are equally entrusted with sensitive data or key client-servicing relationship and have their own employees that will be adopting social networking into their personal lives, you will appreciate that the same considerations and guidelines should be applied to these strategic partners.

As adoption of social networking continues to gain velocity, it may be a good time to review the terms and conditions of your existing sourcing relationships and determine if employee guidelines for social media postings are aligned to those given to your own employees.  This may require an additional review to consider differences in social media usage across geographies or cultures.  Remember that while sites such as Facebook and Twitter are extremely popular in western cultures, the same tools and applications may be a completely different set for the employees of your service provider.  It is also wise to begin factoring considerations like these in your evaluations of potential partners as part of your vendor vetting process.

How can you determine the level of discretion your sourcing partners’ employees are demonstrating?  The area of social media monitoring provides a good source of information in this area.  If you already use monitoring in your organization, consider directing some of the monitoring activities towards these key partners by closely examining posts that reference the vendor’s company name, the geography in which they operate and/or key phrases that are unique to the operational area they are supporting.

By demonstrating that you take the area of social media usage by both employees and your vendors and service providers, you will be demonstrating that you value the confidential nature of the information you all share – a desirable characteristic for which your customers and shareholders will be grateful as more companies make visible mistakes in this rapidly evolving area.

Sanjaya Krishna and John Hair are members of a KPMG LLP’s Advisory practice leading the charge in providing social media advisory services to clients as well as supporting KPMG LLP’s own social media strategy.  KPMG LLP (US), KPMG Holdings Limited (UK) and KPMG International acquired EquaTerra in February of 2011, in part to infuse EquaTerra’s sourcing advisory capabilities into KPMG’s broader advisory services offerings, included those targeting social media.

Filed under: How to..., Knowledge Management, Market Trends and News, Outsourcing, Social Media by EquaTerra