Transforming
the business through social tools
The
effect of social technologies in customer-facing processes is already
significant. Our survey finds that while overall adoption of these tools has
plateaued, companies can do more to measure and then capture social’s benefits.
After
years of rapid and increasing adoption, the use of social technologies has
become a common business practice. Now the responses to McKinsey’s latest
survey on these technologies indicate that in certain functions (namely, sales
and marketing), companies are applying social tools extensively and becoming
more digital organizations overall. We asked executives
about their companies’ use of social tools in 18 specific business processes.
Among them, social technologies are the least integrated into the work flow for
operations processes, such as order to cash and demand planning. They are the
most integrated into public-relations, customer-relationship-management (CRM),
and marketing processes—where these technologies are a natural extension of
existing tools. As a result, executives say the use and integration of social
tools have had the most significant impact on the day-to-day work for many
customer-facing activities.
To achieve this impact and
increased productivity across the entire business, most companies must become
better at engaging more employees, customers, and external partners through
social tools, then capturing new benefits and measuring them in a systematic
way. At the companies seeing the greatest benefits from social interactions,
respondents are much likelier than others to say these tools are highly
integrated into all processes, not only their sales-and-marketing activities.
The journey is difficult: even companies reaping the greatest benefits still
struggle to measure the impact and potential value these tools can bring to
their business. But the steady climb in the use of social across
platforms—along with the growing shares of respondents reporting outsize
benefits from social interactions—indicates that significant gains can still be
made. What’s more, executives are much more optimistic than in past years that
their companies’ investments in social tools will grow. This result suggests
that many more organizations will be able to realize additional value from
technology use in the coming years.
Seeing social’s impact on processes and work
flow
While we have asked more
generally in previous surveys about the business uses of social technologies
(which groups of employees use social technologies in their work, for example,
and whether social interactions are internal, external, or both), the latest
survey asked about technology adoption in 18 specific processes, across
functions, for the first time. According to respondents, social tools are used
much more often in some processes and activities than others: namely, in
customer-engagement processes such as public relations, customer relationship
management, and the execution of marketing activities. The use of
social is much less common in operations processes, such as order to cash and
procurement, where there is particularly high potential for companies to
increase the value they are reaping from these technologies.
Where social tools are
used, respondents say processes have changed notably as a result—particularly
for developing customer insights and competitive intelligence, where 62 percent
of respondents say the use of social technologies has significantly changed the
work flow. Executives also report that in the processes where social tools are
used most often, tools tend to be integrated more deeply into day-to-day tasks—suggesting
that companies must adjust the way they work to get the full value from these
technologies. Among the processes we asked about, the largest shares of
respondents say technologies are very or extremely integrated into the work
flow for customer-facing activities: public-relations processes, the
development of marketing plans, and the execution of marketing activities. The
smallest shares report a high level of integration for order-to-cash and
demand-planning processes.
At
fully networked organizations—the companies seeing the greatest benefits from
internal and external use of social technologies —executives report
greater-than-average use of these tools in each process. They also say the
technologies are more embedded in their work. These executives, like all
others, report the greatest impact from using social tools in public-relations
processes. But relative to the global average, they also report an outsize
impact from using social in demand planning, CRM, and after-sales services
(Exhibit 3). For companies struggling to prioritize the highest-impact areas
and processes where they could use social, these results suggest some good
starting points where other organizations have achieved success, as well as
some undervalued areas where there is considerable potential for companies to
get ahead of competitors if they use social tools.
Overall
use of social tools plateaus, and their benefits are hard to measure
More
broadly, this year’s results confirm that company adoption of social
technologies is maturing. Executives continue to say their companies use highly
interactive technologies, such as online videoconferencing and social
networking, more often than less engaging tools, such as wikis and podcasts. The use of social
tools with customers or among employees is still more common than using tools
with external business partners, although executives report only incremental
changes in the internal or customer-related benefits their companies gain.
On
the other hand, the companies that do interact with business
partners, suppliers, and experts through social technologies are seeing growing
benefits. Just 41 percent of respondents say their companies interact with
these groups at all through social technologies. But of those that do, 66
percent say their companies have benefited from increased speed to access
knowledge, up from 53 percent last year
The
share of fully networked organizations seeing outsize benefits from social
interactions is also growing, albeit at a measured pace. Twenty-four percent of
organizations now qualify as fully networked, up from 20 percent in the past
two surveys. Their responses suggest that for all other companies (those that
are developing or are only internally or externally networked ), there’s much more
potential value to capture from social technologies—especially since most organizations
already have a foundation in place for technology use. Eighty-two percent of
respondents (the same percentage as last year) say their companies have adopted
at least one social tool in their business.
For many companies, the use
of metrics could facilitate higher returns from social tools. In practice, few
of them—even those that are fully networked—are effectively measuring the
benefits from social. Just 32 percent of all respondents say their companies
use quantitative measures to assess the impact of their social-technology use.
Fully networked organizations do better (52 percent at these companies report
using quantitative measures), but there’s still room for many of them to
improve.
What’s
more, majorities of respondents say there are no metrics in place to measure
the benefits their companies see from internal use, use with customers, or use
with partners and suppliers, which was also true in last year’s survey. Social tools could
provide companies with data on processes and practices they’ve never measured
before (the level of communication among individual employees, for example).
But many organizations must still learn how to use such measures. Our
experience suggests they can also use existing, targeted metrics for areas such
as customer satisfaction, up-sell conversion, and employee engagement to
measure the success of social tools by comparing changes in these metrics
against control-group areas where no social tools have been used.
Optimism ahead for social
While the overall usage of
and benefits from social tools have been roughly consistent over the past two
years, executives believe the future of social looks brighter than even before.
Seventy-two percent expect that in the next three years, their organizations’
investments in social tools will increase—up from 58 percent who said so last
year . This change suggests that the depth of adoption within enterprises might
increase even further in the future.
The use of technologies on
mobile devices is another bright spot, as it continues its steady rise: 72
percent of executives now say their companies’ employees use at least one
social tool on mobile, up from 67 percent last year and 65 percent in 2012. Overall,
the use of social tools on smartphones is more common than use on tablets. And
for certain employees, mobile use is especially (and increasingly) prevalent.
While more executives than ever report that employees across all functions are
using social tools on mobile, respondents still cite employees in marketing,
sales, and IT most often as mobile users. These employees are more likely to
use social tools on mobile than on nonmobile devices; they also work on the
business processes where social tools are most integrated into daily work.
In the coming years, nearly
all executives believe that social technologies could effect some key changes
in structural and management processes. Their visions of social’s potential
diverge, though, depending on the benefits their companies currently see. At
internally networked organizations, executives believe the use of social could
democratize decision making. Fifty-one percent cite data-driven decisions as a
likely change at organizations without constraints (compared with 33 percent of
the total average), and 24 percent cite the use of internal markets and voting
mechanisms to allocate resources (compared with 16 percent). At fully networked
organizations, executives most often predict the organization’s formal hierarchy
would become flatter or disappear altogether.
Looking ahead
·
Begin
with a targeted approach, then broaden impact.
While the overall
adoption of social tools remains widespread, the results indicate that most
companies use them intensely in only a few functional processes. Yet the
successful use of social in sales-and-marketing processes suggests how much
more potential value is at stake in other parts of the business. To get the
most value out of social technologies, companies should focus on specific cases
where these tools could be implemented in a targeted way. A company already
using social tools could broaden the technologies’ impact by adopting them in
areas such as operations, where they are used less often now.
·
Focus
on metrics.
As companies adopt
(and adapt) these relatively new technologies in their business, they also face
the challenge of measuring data they’ve never seen or worked with before. To
use social tools more effectively and understand where and how they can add
future value, companies must mind how to measure the impact from tools already
in use. One approach is comparing existing metrics from areas of the business
where social is used against control-group areas without social tools. But the
best methodology depends on the process and what benefits companies ultimately
want to see.
·
Change
the way people work.
Executives are optimistic about the potential
business value from social tools—a common attitude toward new technologies.
There’s an initial growth phase that drives adoption and excitement around the
technology, but then companies need time to figure out how to use it to drive
real productivity improvements. To reach the next S-curve of value from social
tools, companies must think more holistically about the organizational and
cultural changes to make. Social tools have the potential to change
organizations, but only if those tools are implemented in a way that changes
how individual employees work day to day.
·
SURVEY
CONTRIBUTORS Jacques Bughin; Michael Chui; and Martin Harrysson
http://www.mckinsey.com/Insights/High_Tech_Telecoms_Internet/Transforming_the_business_through_social_tools?cid=other-eml-alt-mip-mck-oth-1501
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