McKinsey & Co has a long tradition of taking the pulse around digital social tools, often dubbed Enterprise 2.0. While enterprise 2.0 technologies have become in business, the most recent results from the latest McKinsey Global Survey1 provide three new insights:
- The new generation of social tools are better at enabling employees to collaborate in improved and innovative ways2.
Respondents say improved internal communication is the feature of social tools that has most benefited their businesses. They also expect that, in the coming years, enabling better communication will be one of the ways these tools could bring about fundamental changes at their organisations.
- Social tools benefits are enhanced by, as well as enhance, digital transformation.
From asking executives about their companies’ use of social tools, digital technologies, and big data in 18 different business processes, we gathered that using social begets better use of these other digital technologies. When organisations digitise a process’s work flow (which happens most often with customer-facing processes), respondents say that using social tools in that same process has enabled their companies’ overall digital efforts. What’s more, some executives report greater benefits – decreased costs and increased productivity, for exampleif they digitise and use social tools in a given process. Several benefits are greater still if the company uses data collected from social interactions among employees and with customers.
- Digitisation combined with social tools lead to much more agile companies.
We also asked executives as to how the conjunction of new social tools and their digital programmes will help creating more agile organisations. The answer is a definite yes.
From those new insights, we conclude that the new generation of social tools are clear building blocks of better information flows within companies as well as between companies and their ecosystem of customers and suppliers. As a major facilitator of digital transformation programmes, they represent a clever investment to make, at the time where major digital disruption looms and is putting major pressure on traditional companies.
A new generation of social tools
Executives report that the business use of social tools is nearly universal. Ninety-three per cent of respondents say their companies use at least one social technology, continuing an upward trend (82 per cent said so in the previous two surveys)3. In addition, already 74 per cent say social tools are at least somewhat integrated into employees’ work.
Yet, although social technologies are more and more commonplace, the results suggest that not all tools are created equal. We find that those that can enable collaboration among employees are the most valued with 80 per cent of executives say their companies use these tools for internal purposes. When asked about the most beneficial features of the social tools their companies use, respondents most often cite real-time interactions, the ability to collaborate with specific groups, and cross-platform availability. What’s more, respondents believe the same three features will most improve how people work at their organisations in the future.
Enter a new generation of team-collaboration technologies. These tools are cloud based, designed for real-time interactions, allow users to search conversations, provide a distinctive user experience, and integrate with other enterprise applications (such as file sharing and social media), among several other features.4 Because they create searchable content as a by-product of collaboration, the new-generation tools could even begin to replace email as the default channel of written communication.5
“Because they create searchable content as a by-product of collaboration, the new-generation tools could even begin to replace email as the default channel of written communication.”
Alas, to date, few companies are putting these tools to work. But at the ones that are, executives report above-average benefits from social technologies. They are much likelier than average to say that social tools are extremely integrated into employees’ daily work and that at least half of their business activities have been digitised. And while most companies tend to use social tools in external-facing processes, such as marketing activities and public relations, adopters of new-generation technologies report broader use of social across the organisation. They are much likelier than average to use social in internal processes, such as R&D and IT management.
How new social technologies support the success of digitisation
Improved collaboration is not the only way social tools can benefit companies: social tools play a key role in digitising the business.
At the process level, digitisation remains not pervasive, confirming other McKinsey research on the stage of corporate digitisation being at best at 40 per cent of its potential.6 In this survey, companies confirm that they have been focusing both their social and their digital efforts on external, customer-facing processes, such as public relations, marketing, or customer relationship management. By contrast, much smaller shares report that internal processes use social tools or have incorporated digital activities into the work flow: nine per cent of executives say their procurement processes include digital activities, compared with 37 per cent who say so for CRM.
Responses vary by industry, with executives at high-tech firms reporting the greatest progress in digitising most processes. But even these companies have more to do. Those in high tech, like all other respondents, are more likely to be digitising their customer-facing processes than internal ones.
The good news is that social tools can help digitise all processes. For every process where their companies are digitising and using social tools, respondents overwhelmingly agree that social technologies have enabled their use of digital overall. This is true even for the back-office processes where few respondents now say their companies are using social tools. In fact, social’s effect on digitisation is greatest for the internal processes where social tools and digital activities are least common. We found that the strongest correlation between social’s enablement of digital and the adoption of digital activities is in order-to-cash, demand-planning, R&D, supply-chain-management, and procurement processes
Other results support the notion that, when a company looks to technology to improve its processes, the benefits are greater when social and digital tools are used together. When a process has been digitised, respondents also report a greater benefit from the use of social tools. For example, when marketing plans are digitised, executives credit social tools with a 27 per cent increase in converting customers – compared with an average increase of 20 per cent.
The effect is more powerful, too, when companies use data from social interactions along with the social tools themselves. At companies where marketing-plan development is digital and data from social interactions with customers are used, respondents report a 31 per cent increase in customer conversion from using social tools. On average, executives report only a 20 per cent increase in conversion.
How new social tools are reshaping more agile organisations
Beyond the specific benefits that social can bring to companies, these tool have large implications for the organisation as a whole. Asked which changes to structural and management processes they believe social technologies will bring to their organisations in the next three years, two-thirds of executive expect communication will improve, but almost half believe their organisations will become much more fluid – that is, that work will be project based and will not necessarily happen within teams or functions.
Finally, the greater the number of processes involving social tools, the more each of the 11 changes we asked about will happen. The same is true at fully networked companies – companies having strong external connections with suppliers and customers – which are reaping the greatest level of benefits from using social. Two thirds of companies using next generation team collaboration tools are previewing work being performed as more project based; 72 per cent anticipate that social technologies will enable teams to self-organise.
- How social tools can reshape the organization, McKinsey Quarterly.
- The online survey garnered responses from 2,427 respondents representing the full range of regions, industries, company sizes, functional specialties, and tenures. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.
- Transforming the business through social tools, McKinsey.com; Organising for change through social technologies: McKinsey Global Survey results, McKinsey. com.
- Another feature of these tools: automated bots that participate in conversations (for example, they can take lunch orders or provide new employees with onboarding information).
- For the full McKinsey Global Institute report, see The social economy: Unlocking value and productivity through social technologies July 2012, on McKinsey. com.
- Digital Europe and Digital America, McKinsey Global Institute.