Just yesterday I wrote about some of the highlights of McKinsey's recent study about adoption of Web 2.0 technologies in the enterprise. Forbes has an interview with the study's author, Jacques Bughin, director of the company's Brussels office. Though the study covered both internal and external collaboration benefits, Bughin focuses on collaboration with customers and business partners.
Though Bughin reckons 70 percent or 80 percent of companies are using such technologies, only about 20 percent are "pretty much ahead of the curve" and actively using them. His opinion matches up with the Burton Group's finding that many companies have the mistaken impression that their Web 2.0 strategies are far behind those of their competitors. Instead, it looks as if a fairly small group of early adopters are integrating Web 2.0 technologies into thir employees' regular workflows.
One of the sticking points identified by Burton Group is difficulty in demonstrating ROI. IT Business Edge's Mike Vizard recently shared some numbers from Cisco Systems that certainly show it can be done. Bughin says companies are achieving both qualitative and more quantitative benefits from their use of Web 2.0 technologies:
The stated improvement was always in the range of 10 percent to 20 percent, which is significant. Even if it's overstated and that's only 5 percent to 10 percent, it's still an improvement in cost, innovation, revenue and the real drivers of a business model.
When asked how companies could maximize benefits, Bughin offers four suggestions. Unlike Cisco's experiences, which seem based almost entirely on intermal improvements, Bughin addresses benefits gained from collaborating with external folks, primarily customers. His advice:
- Offer diverse incentives, not just financial compensation. "If you let people tell you what is wrong and how something can be improved, the quality is usually good," he says. This seems to be one of the key success factors of Dell's IdeaStorm and similar communities which solicit customer suggestions. Jeremiah Owyang says companies shouldn't pay customers, at least not those contributing through community participation.
- Make sure your brand is well established and already has fans. "Nobody will help you if your brand is not good. If you open a company without knowing what segment you're going after and people hate your products, it's a recipe for disaster," says Bughin.
- Segment your customers, and rely on those who account for most of your company's business. "... those are the people who know you best. They spend the most, and they will help you the most. They have made a conscious decision to select your products and your brand," Bughin says. It's a good idea to issue an invitation to these kinds of folks, Owyang suggests.
- Don't open for the sake of openness, and be prepared to make cultural changes. He notes that collaboration with supply-chain partners, for instance, will require "much more trust than an arm's length contractual relationship."
More good tips gleaned from the interview:
- Define proprietary data, the stuff you don't want to share with partners or customers. "You share where positive results can occur," preferably using different data sets in hopes that a fresh take on the data can help you define new products or services.
- Understand the level of strategic openness you want for your company.
- Give some serious thought to workflow and information flow, and determine how to integrate Web 2.0 technologies into those flows. I think he's saying enhanced collaboration isn't the answer. In fact, without some structure, it could conceivably create more problems than it will solve.