Most European companies have achieved measurable business benefits from Web 2.0 technology but there is still along way to go before they realise the full benefits of these tools, according to research from McKinsey.
McKinsey’s report, called ‘Time to Raise the CIO’s Game: A Call to Action for European Companies’, found that two-thirds of European firms are already using Web 2.0 tools such as wikis, blogs and social networking sites.
While many companies are seeing benefits through improved internal collaboration and relationships with customers, partners and suppliers, only a small number of firms have begun to realise other benefits such as reducing time to market, reducing product development costs, and increasing the number of successful innovations.
Those using at least one Web 2.0 technology to improve employee interactions said that increasing speed of access to knowledge (70%) was the main benefit, followed by a reduction in communication costs (55%). Increasing speed of access to internal experts (45%), decreasing travel costs (39%), increasing employee satisfaction (35%) and reducing operation costs (34%) were also listed as benefits.
There are areas for improvement, according to McKinsey. Just 26% said that they had used Web 2.0 tools to reduce time to market, 25% said they had increased the number of successful innovations and only 10% said they had increased revenue.
Companies using the tools for customer-facing interaction reported an increase in marketing effectiveness (51%) and customer satisfaction (40%) as the main benefits, ahead of reducing marketing costs (39%), support costs (36%) and travel costs (30%).
Other benefits such as reducing time to market, increasing successful innovation and increasing revenue were further down the list.
“Collaboration technologies can help raise the productivity of knowledge workers,” the report said. “Most European companies reported that they had achieved measurable business benefits from the use of Web 2.0 technologies, but work remains before companies can realise the full benefit of these technologies.”
The report outlined six ways companies can realise more benefits from Web 2.0: role modelling and support from senior leadership; encouraging experimentation to find the best uses; integration with existing workflow or modes of communication; providing informal incentives to participants; careful targeting of participants; and balancing top-down management and self-management of risk.