McKinsey Provides More Evidence of Enterprise 2.0 Benefits

Ann All

About two months ago, I wrote a post in which I urged companies experiencing success with Web 2.0 tools and technologies and the vendors that serve them to be more forthcoming about sharing details of these successes to give those interested in trying Web 2.0 some specific, business-driven reference points. This might help allay the concerns of companies that have a hard time seeing anything other than non-business benefits in social networks and other new ways of communicating and collaborating.


IT Business Edge's Mike Vizard recently wrote about Cisco's impressive returns from its Web 2.0 investments. Cisco figures it derives some $772 million worth of returns from its $82 million investment in Web 2.0 technologies. Among the benefits it cites: improved remote collaboration that reduced travel requirements, more time spent working thanks to more robust telecommuting capabilities, better optimization of employees with specialized skills, and improved sales productivity. Specifically, Cisco says collaboration software reduced costs by $251 million a year, increased margins by $142 million and generated employee time savings of $380 million a year.


Though there's a dearth of hard numbers, recent research by McKinsey indicates that a majority of companies, 69 percent, say 2.0 technologies have yielded measurable business benefits. (Free registration is required to view study results.)


Echoing the Cisco experience, respondents tapped benefits such as quicker access to knowledge (68 percent cite access to internal sources, and 51 percent mention external sources such as partners and suppliers) and reduced communication costs (54 percent say costs of internal communications have dropped, and 49 percent mention external communications, with a median 20 percent reduction cited for both categories).


Video sharing has gained the most traction in the enterprise, with 48 percent of respondents using it internally, 48 percent using it for customer communications and 50 percent using it to communicate with partners and suppliers. Video sharing also apparently yielded the biggest bang for the buck, with 24 percent of respondents saying they get measurable benefits with internal use, 30 percent citing benefits for customer-related purposes, and 39 percent attaining benefits with partner/supplier communication. I am assuming this category encompasses videoconferencing, which has been a star performer for Cisco and other companies.


Of the dozen technologies listed, respondents reported the lowest returns for blogging. Forty-seven percent of respondents used it internally, though 44 percent reported no measurable benefits. Fifty-one percent used blogs to communicate with customers, with 42 percent saying blogs have yielded no measurable benefits, and 51 percent use blogs to communicate with extermal suppliers/partners, with 60 percent saying they've derived no measurable benefits.


Not surprisingly, the McKinsey respondents that integrate Web 2.0 technologies into employees' daily work activities are those that most often report they've achieved measurable benefits. More than 70 percent of respondents say this kind of integration is a key to success in all three categories (employees, customers and partners/suppliers).


Despite the rough economy, more than half of the companies surveyed say they'll increase Web 2.0 investments, while another quarter will maintain their current investment levels.

Add Comment      Leave a comment on this blog post
Oct 6, 2009 3:00 AM Torben Rick Torben Rick  says:

Are customers getting in control?

People want to be heard, they want a human being to say 'I'm sorry that happened, let's see what we can do to make it right.' They will let their friends know how they were treated-because they can.

If not heard and helped they will react. I the old days may bee tell approximately 8-10 friends about it-nowadays they will tell the 'whole world about it'.

What went wrong for Time Warner?


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