Taking Advantage of Social Technologies
Last November, McKinsey & Company published its annual survey on the use of Internet social technologies in business firms. Based on a sample of 4,200 global executives from various sectors, geographies, company sizes and functional specialties, this survey emphasizes how companies are using and taking advantage of social web tools. Main findings include a continuation of integration into businesses, affecting business processes and increasing performance. The survey confirms the growing trend of adoption of social-technology by corporates and underscores an improvement in their mastering of such tools. However, difficulties related to a beneficial use remain challenging and forces companies to spend substantial efforts in order to take advantage of these technologies. TheRightSocialMedia.com presents and comments the results of this survey based on the article of Bughin, Byers & Chui (2011) and taking into consideration the article of Berger, Rumo & Sperisen (2011).
Trends in usage of social technologies
The fifth annual survey of McKinsey & Company on social tools and technologies shows that 72% of companies are using at least one social technology and that 50% are using social networking in 2011 (see Exhibit 1). The use of social technologies for customers, partners, suppliers and other external stakeholders purposes increased substantially. Among the concerned sectors, 86% of high technology and telecommunication companies are using at least one technology (best-in-class) against 62% of energy companies, which are the least incline to benefit from these tools (see Exhibit 2). Companies also consider better-suited technologies for particular activities and business processes. Blogs and social networking, for instance, are intensively used for external business processes including competitive intelligence and marketing support.
The main findings of the study reveals that companies are seriously improving their ability to use these technologies, enhancing their operations and benefiting from new business opportunities. More than this, social technologies’ adoption may transform organizations’ business processes. Numerous executives state that with fewer organizational barriers, social technologies could constitute the pillar of new business processes strongly enhancing firms’ performance.
Extending the organization, increasing performance
Since 2010, McKinsey brings the interesting categorization of organization’s type depending on corporates’ use of social technology. Companies freshly initiated to social web and reporting only few integration and benefits of social technology are defined as developing. Internally networked companies integrate social technology and take advantage of it mainly for internal purposes. On the contrary, externally networked companies benefit from social technologies through interaction with customers and business partners. Finally, companies benefiting from social technologies for external and internal purposes are called fully networked and represent the smallest category of the survey. This categorization emphasizes how companies are using social web for different purposes and different benefits. In addition, it underscores how companies are extending outside usual frameworks, entering external networks and bluring the traditional structural barriers of the firm.
Interestingly, the survey reports a higher percentage of externally networked organizations than last year, while internally networked organizations lowered. In addition, it appears that it is easier to lose benefits from social technology’s use by falling back in the developing category, than increasing its networked level. Thus, taking advantage of social web tools requires considerable efforts to enterprises. But the benefits can be substantial. 65% of the respondents reckon that they increased their speed to access knowledge through external partners and suppliers using social technologies. 69% increased marketing effectiveness towards customers doing so.
Recently, a survey analyzed the utilization of social media by Swiss SMEs. This study leaded by the HEG Fribourg shows that more than 35% of Swiss SMEs (based on a sample of 700 companies) are using social media in a commercial perspective (including blogs, Facebook, LinkedIn, Twitter, Wikis, YouTube and Xing). The growing trend of use of social media seems to be adopted by many categories of companies. Nevertheless, risks and opportunities’ analyses undertaken by firms often fail to convince, while a serious potential of increase in sales, connections with stakeholders and performance can be exploited from the use of social-technology.
The challenges of benefits
Taking into consideration these findings, this blog would like to rise questioning around the theme of Internet social technologies imbrication into business processes. As shown by Bughin, Byers and Chui (authors of the related McKinsey’s article), benefiting from social-technology takes substantial efforts to companies. Some technologies may be adapted to specific business processes and not to others. By adapting their organizational barriers, companies could take advantage of new business processes ensuing from social technologies. This requires businesses to study and define which technology would be best depending on its needs. Such an analysis may involve considerable time and costs to companies. This is particularly true for small and medium-sized enterprises, which are lacking of necessary resources for this kind of activities. In an economic context of dramatic crisis for many countries, we believe that it is Internet entrepreneurs’ duty to go into a reflection considering not only how businesses could use social technology better, but also how social technology can innovate in order to serve better small and medium businesses, the engine of growth.
Bughin J., Byers A.H. & Chui M. (2011), “How social technologies are extending the organization”, McKinsey Quarterly: The Online Journal of McKinsey & Company, URL: http://www.mckinseyquarterly.com/How_social_technologies_are_extending_the_organization_2888
Berger M.S., Rumo E.J. & Sperisen N. (2011), « Enquête sur l’utilisation des médias sociaux dans les PME suisses », Institut entrepreneuriat & PME, HEG Fribourg.
Nuttney A. (2010), “The Social Networking Market Opportunity”, Business Insights Ltd.
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Let’s put this simply !by the editor 1. The fifth annual survey of McKinsey & Company on social tools and technologies shows that the companies are increasingly using the social technologies for stakeholders relations purposes and they are mastering those technologies to enhance their operations and benefit from new business opportunities. 2. Since 2010, McKinsey is doing a categorization of organizations depending on the corporates’ use of social technology for integration and benefits purposes: - Developing, when it just started this path - Internally networked, which uses the social technology mainly for internal purposes - Externally networked, which uses social technologies mainly for interaction with stakeholders. - Fully networked are companies benefiting from social technologies for external and internal purposes. 3. Taking advantage of social web tools requires considerable efforts but the benefits can be substantial. 69% of the respondents increased marketing effectiveness towards customers using social technologies.