The Role of Social Media in Business Transformation Strategies (Development and Validation of the Social Media Commerce Model) Eliot Simangunsong* Dept. of Operations and SCM Universitas Prasetiya Mulya Jakarta, Indonesia *elliot@pmbs.ac.id Rudy Handoko Dept. of Marketing Universitas Prasetiya Mulya Jakarta, Indonesia rudy_handoko@pmbs.ac.id Abstract—The rise of social media in the digital era is considered important for anybody because it helps people to communicate and share information with each other online. Because it has become a necessity, it is not surprising that the number of social media users has increased. This also has an impact on increasing various online activities, including business activities. The ease of sharing information and communicating through social media can help entrepreneurs and consumers to conduct business activities or buy and sell online. This phenomenon is an inspiration for researchers to uncover the role of social media in Indonesia in business activities, knowing the factors that can influence a social media follower who initially "likes" to "buy", so that it can be developed into a social commerce model. By surveying users of social media, 547 data are collected that consists of social media entrepreneurs and social media buyers. Adapting He et al framework, the results of data analysis showed that there is enough evidence that social media has been used for business. The frequency of social media usage has strong links for a user to buy products or do business on social media. Young people such as college students tend to use social media for business more than those with higher levels of education who may already have permanent jobs. Multiple regression analysis resulted in proposed model of social media usage for business. There are five major factors that influence satisfaction and performance of doing business on social media. The results of this study are useful in the management of business operations or start-up companies that use social media. Social media helps businesses to reach consumers easily and quickly without needing to spend a lot of money and energy. Keywords—social media, social commerce, digital era, business transformation, business operations I. INTRODUCTION Social media is a network and cellular based technology that functions as an interactive platform for individuals or groups to communicate and share information [1]. Social networking and communication activities are one of the most popular online activities. Social media is very popular in Indonesia and its use is expected to continue to increase as a source of revenue for businesses. Statista reports that in 2017, there were 2.46 billion social media users (Figure 1) [2,3]. Fig. 1. Number of social media users (in billion) in the world since 2010- 2021. Social media can be classified into blogs, social networking sites, virtual social worlds, collaborative projects, communities and virtual gaming worlds [4]. There are indications that explain the role of social media increasingly varied, not only limited to tools for social communication [5], but also began to be used for business purposes. The importance of social media for business can be indicated from social media as a technology platform that is user friendly and can be easily used without the need for sophisticated technical experience, different from other internet applications, such as websites and e-commerce [6]. Creativity in utilizing social media enables someone to organize their company for promotion and sell their products through social media [7,8]. Through social media, companies can sell products and services effectively without the need for large costs. The company's marketing function can utilize social media to support the consumer's decision making process and their shopping behaviour [9]. The study by Lockett provides an illustration of the use of social media such as Facebook, LinkedIn, Twitter, and YouTube by businesses to promote corporate brands, connections and reach target consumers [10]. It is important to understand why and how social media was adopted for business and for what purpose [11]. Gavino et al see further research on relevant and validated measurements of the impact of social media use on business performance and corporate income [4]. Lockett found that SME businesses generally do not have the tools and strategies for using social media [10]. Rahbi and Abdullah added that unlike SMEs in Advances in Economics, Business and Management Research, volume 149 Proceedings of the 3rd Asia Pacific Management Research Conference (APMRC 2019) Copyright © 2020 The Authors. Published by Atlantis Press SARL. This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/. 224