I have made a 60 second summary below, and a more in-depth version follows.
60 second summary
1. Companies are applying social tools extensively and becoming more digital. Specific functions, namely sales and marketing, are the greatest users.
2. Executives found that social technologies were least integrated into the work flow for ‘operations processes’.
3. PR, CRM and marketing were most integrated with social tools and had the most significant impact on the day-to-day work for many customer-facing activities.
4. To achieve impact and increased productivity across the entire business, 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.
5. At companies seeing the greatest benefits from social interactions, respondents are much more likely than others to say these tools are highly integrated into all processes.
6. Measuring the impact and potential value these tools can bring to their business is still a challenge – even for companies reaping the greatest benefits.
7. However, executives are more optimistic than ever before that their companies’ investments in social tools will grow.
Social’s impact on processes and work flow
Executives say that social tools are used much more often in some processes and activities than others. Perhaps unsurprisingly, this includes customer-facing processes such as public relations, customer relationship management, and the implementation 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 deriving from these technologies.
The attached chart shows where social technologies and tools are most used.
In those areas where social tools are used, processes have changed noticeably – 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.
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.
At fully networked organizations (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.
Overall use of social tools plateaus and benefits are hard to measure
Company adoption of social technologies is maturing, by using highly interactive technologies, such as online videoconferencing and social networking, more often than less engaging tools, such as wikis and podcasts.
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.
However, the companies that do interact with business partners, suppliers, and experts through social technologies are seeing growing benefits. Just 41 per cent 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 attached chart shows the top five measureable benefits of social-technology adoption, from use with partners, suppliers, or external experts.
For many companies, the use of metrics could facilitate higher returns from social tools. But in practice, few of them are effectively measuring the benefits from social.
Furthermore, a majority 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.
Social tools could provide companies with data on processes and practices they’ve never measured before, such as the level of communication among individual employees. McKinsey suggests they can 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
There has been a rise in the use of technologies on mobile devices with 72 percent of executives saying 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.
Almost all executives believe that social technologies could produce some key changes in structural and management processes, in coming years.
At internally networked organizations, executives believe the use of social could make decision making more democratic. Executives most often predict the organisation’s formal hierarchy would also become flatter or disappear altogether.
McKinsey makes the following recommendations:
> Begin with a targeted approach, then broaden impact: 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: 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: Social tools have the potential to change organisations, but only if those tools are implemented in a way that changes how individual employees work day-to-day.
For the full report click: Transforming the business through social tools
Also see my blog post on: McKinsey consultants tap the power of ‘hidden influencers’