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Value of Social Network -- A Large-Scale Analysis On

Value of Social Network -- A Large-Scale Analysis On

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Published by: api-26271680 on Apr 11, 2009
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Value of Social Network -- A Large-Scale Analysis on Network Structure Impact toFinancial Revenue of Information Technology Consultants
Lynn WuMIT Sloan School of ManagementIBM ResearchChing-Yung LinIBM ResearchSinan AralNYU SternMIT Sloan School of ManagementErik BrynjolfssonMIT Sloan School of Management
Working PaperAbstract
A large body of literature on social networks in organizations demonstrates that certain types of network topology
are optimal. However, little research leverages the ample data created by people‘s electronic communications to
refine and verify theories. This gap is problematic, because the literature on organizational networks suffers from thesame deficits as much of the social network literature: both tend to be focused on small, static networks. In thisstudy, we mitigate this gap by collecting and mining the largest organizational social network ever collected. Wefind that not only does the population level topology of social network correlate with performance, attributes of thenodes in a social network such as human capital and status that can be beneficial to work performance. In addition
to an individual‘s ow
n human capital and network position, the
human capital and status in one‘s
network can beinstrumental to
This work was presented at Winter Information Systems Conference, Salt Lake City, UT, Feb. 2009.Presentation slides can be accessed athttp://smallblue.research.ibm.com/ 
This study presents new empirical evidence on the relationship between information worker productivityand social capital generated from social networks. As the information content of work increases, studying howinformation workers generate value through both technological and social means is important. There is a large bodyof literature on social networks and organizations that describes the benefit of social networks on work performancein various settings. For example, a stream of literature shows that individuals and organizations with specific typesof network topology, such as one that spans multiple structural holes and occupies a central position within anetwork is more likely to be successful (Burt 1992). However, little research leverages the ample data that are
created by people‘s interactions,
such as e-mail, call logs, text messaging, document repositories, web 2.0 tools, andso on. This gap is problematic, because the literature on organizational networks suffers from the same deficits asmuch of the social network literature does: both tend to be focused on small, static networks. As a result, important
questions like ‗does the optimal network structure for performance hold for a large network‘ and ‗what is the
appropriate timing of communication to actors of interest
‘, and the like have been completely neglected.
 Recent advances in information technology give researchers the opportunity to solicit real-time emailcommunication data. Since email archives record detailed communication logs, such as who has emailed whom, theexact time of the interaction, and the content of the exchange, constructing social networks using email archivesallows researchers to eliminate errors and bias that are often introduced in self-reports. Recent empirical work hasstarted to capture real-time communication between people in various settings. Aral et. al (2006, 2007) and Aral andVan Alstyne (2007) record real-time electronic communication within an executive recruiting firm to provide someof the first empirical evidence demonstrating how information workers use information technology and their socialnetworks to generate business value.
Similarly, Wu et. al (2008) use ―sociometric badges‖ to examine the impact of 
face-to-face communication networks on the productivity of hardware configuration specialists. While these worksleverage new data collection techniques to advance our understanding of how information workers utilize socialnetworks to improve their work performance, we have yet to see a study that explores a large-scale dataset involvingmore than a handful of people over a brief period of time. Lin et. al (2008) invented a privacy-preservingorganizational social network analysis system that uses social sensors to gather, crawl and mine various types of data sources, including content of individual email and instant message communications, calendars, hierarchicalstructure of the organization as well as individual role assignments. The system is deployed in more than 70
countries and collected electronic communication content over 3 years. After anonymize the identity and the contentof these communications, we are able to quantitatively infer the social networks of 400,000 employees within a largeorganization. To precisely estimate the value of social networks, we collect performance metrics of a subset of theseemployees from the corporate project and personal revenue database. To our knowledge, this is the largest socialnetwork ever constructed to study the impact of social networks on information worker productivity.In particular, we focus on a class of information workers that have rarely been examined in the past:consu
ltants that represent a large population of information workers who generate revenue by logging ―billablehours.‖ To explore the relationship between social network and productivity of these consultants, we collect
detailed and objective performance measures of more than 1000 consultants including the number of billable hours,participated projects and the revenue generated. To understand how consultants generate economic value, we alsoconducted extensive interviews to 15 consultants at various stages of their career. Through these interviews, we findthat efficient access to useful information is crucial, as timely and valuable information can facilitate fast and high-quality decision making. Satisfying customers is the cornerstone for consulting services, as generating repeatbusinesses from existing clients is one of the key performance indicators for the health of a consulting business. If expedient access to information improves productivity, understanding the mechanisms of how information workersaccess the information through both social and technological means is important. Continuing with the micro-analysisresearch on worker productivity pioneered by Ichniowski, Shaw and Prennushi (1997) and Aral Brynjolfsson andVan Alstyne (2006), we study a single industry in depth and examine how information workers obtain informationthrough various communication channels and social networks. With the cooperation of the company and employees,we monitored email and instant messaging usage to analyze the flow of information and its relationship toproductivity and performance.The sheer volume of the data allows us to more precisely estimate how population-level topology in anetwork contributes to information worker productivity, after controlling for a host of factors. By capturingcommunication patterns and organizational roles of a large and diverse body of employees we identify a newmechanism of how information workers generate values for their projects. We find that not only does network topology have a st
rong relationship with work performance, human capital and status of one‘s social contactsinstrumental as well. This demonstrates that in addition to one‘s own human capital and network position, it is

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