It's generally the case that Executives tend to invest in new technologies and processes because they hold out the promise of either increasing competitive advantage (for example, by enabling new services or improvements to existing ones) or reducing costs. While opinions differ among discussion participants as to whether Web 2.0 technologies (like InTouch) have yet demonstrated any economic impact, a consensus is emerging that the technologies are valuable internally (mostly by improving collaboration) and externally (by strengthening connections among suppliers, partners, and customers).
Although no longer so very new the ideas and technologies that have become known collectively as Web 2.0 appear to be moving up the agenda for many Chief Execs and Boards.
It's also clear that motives for this interest varies, as do expectations.
MckInsey conducted a global survey earlier this year, 'how businesses are using web 2.0'. The results are fascinating, and sometimes surprising.
http://www.mckinseyquarterly.com/article_page.aspx?ar=1913&pagenum=1
Successful Investments so far...
More than half of the executives surveyed say they are pleased with the results of their investments in Internet technologies over the past five years, and nearly three-quarters say that their companies plan to maintain or increase investments in Web 2.0 technologies in coming years. (A mere 13 percent say they are disappointed with previous investments.) Companies that acted quickly in the previous wave of investment are more satisfied than late movers. Less than a fifth of all those surveyed say they are very satisfied with their returns. Of those who rate themselves as very satisfied, 46 percent are “early adopters” and 44 percent “fast followers”.
Why web 2.0?
Executives say they are using Web 2.0 technologies to communicate with customers and business partners and to encourage collaboration inside the company. Seventy percent say they are using some combination of these technologies for communicating with their customers. For example, about one-fifth of them say they are using blogs to improve customer service or solicit customer feedback.
Respondents report that to communicate with business partners and, secondarily, to achieve tighter integration with suppliers, companies are using Web services, peer-to-peer networking, collective intelligence, RSS (Really Simple Syndication), and peer-to-peer networking.
Companies are using the same technologies to help manage knowledge internally. Just over half of respondents say they used one or more Web 2.0 technologies for that purpose. Just under half use these tools for designing and developing new products—for example, setting up systems to gather and share ideas.
Finally, among the executives surveyed, technologies for automation and collaboration appear to be gaining more traction than some of the technologies that have received more attention in the press. Blogs, podcasts, and mash-ups trail technology trends that allow people to contribute knowledge to a common effort or allow machines to exchange information more easily.
However, looking at companies that have invested in specific technologies, two distinct groups emerge. Some 43 percent of companies are even more focused on networking and collective intelligence technologies than the global average; these companies are likelier than others to be large, in high tech, and in Asia. And some 22 percent are much likelier to have invested in RSS, blogs, and podcasts than others; these companies are also likelier to be in industries such as media and telecommunications and located in North America. (might this mean that a Web 2.0 enabled Insight will be attractive to US buyers users?)
Some participants, especially those whose investments have focused on changes in their IT systems and who have invested less in Web 2.0, tend to view advantages as fleeting. “While we have been in the forefront of most technology upheavals over the past two decades, none of our investments have provided us with any significant competitive advantage for a significant duration. The technologies tend to get adopted by competing financial institutions with no meaningful time gap [and] tend to get commoditized very rapidly.”
Participants in the survey see these technologies as enabling a different way of doing business, both internally (for example, by aggregating knowledge from throughout the company) and externally (by tapping customers for product-development ideas). These respondents, such as this executive from a company using several technologies, tend to expect a more sustainable advantage. “Web 2.0 tools are helping to encourage interest in collaboration across the organization and helping us to explore new and different ways of collaborating. In time this may bring us some form of competitive advantage, but it would be hard to quantify anything at this stage.”
Clearly there is a great deal of divergent opinion in the value of web 2.0 to the business and it's contribution to a firm's sustained competitve advantage but it appears that this uncertainty is not preventing many firms explore what the impact of these tools might mean for them.
It's very interesting to me that those firms looking to encourage and foster a web 2.0/social media approach, including aspects of customer inclusion, employee participation, value co-creation, rich dialogue and interaction, open data and services - are the same firms looking at the long term, strategic, pay-off rather than the more traditional accounting ROI argument for IT investment..
Filed under: organisational change, web 2.0
