McKinsey report shows that using Web 2.0 creates competitive advantage – part i

by Justin Souter on January 17, 2011


I’ve recently been debilitated by a heavy cold, and took the opportunity to catch up on some reading.

If you’ve read some of my other posts, you will have picked up that I believe Web 2.0 can have a big impact on organisations, and will redefine how most of us communicate.

I regularly read articles from the McKinsey Quarterly, “the business journal of McKinsey & Company”. McKinsey & Company is a global management consulting firm.

This is an attempt to convey the key points about McKinsey’s latest Web 2.0 paper in a concise manner, and makes extensive use of quotations. The original post got a bit out of hand, so I decided to split it into sections – top right (of this post) should be a box which automagically listed the published bits of this series.

The Report

ita_rine10[1] The document is called “The rise of the networked enterprise: Web 2.0 finds its payday”, which:

  • Describes how organisations are using Web 2.0 tools and techniques to support their businesses
  • Puts numbers on the various benefits that Web 2.0 can bring
  • Uses statistical analysis to show the link between successful companies and their use of these tools (i.e. they’re suggesting that using Web 2.0 tools makes companies more successful)
  • Proposes the concept of ‘the networked organisation’, viz:

“These survey results indicate that a different type of company may be emerging—one that makes intensive use of interactive technologies. This networked organization is characterized both by the internal integration of Web tools among employees, as well as use of the technologies to strengthen company ties with external stakeholders—customers and business partners.

As such, companies reporting business benefits also report high levels of Web 2.0 integration into employee workflows.”

The document itself is embedded in the fourth post in this series.

The Networked Organisation

In terms of more detail about how the ‘networked organisation’ relates to business performance:

“Three types of organizations, however, seem to have learned how to realize a much higher level of business benefits from their use of Web 2.0:

  • Internally networked organizations. Some companies are achieving benefits from using Web 2.0 primarily within their own corporate walls.
  • Externally networked organizations. Other companies (5 percent of those deploying Web 2.0) achieved substantial benefits from interactions that spread beyond corporate borders by using Web 2.0 technologies to interact with customers and business partners, according to survey results.
  • Fully networked enterprises. Finally, some companies use Web 2.0 in revolutionary ways. This elite group of organizations—3 percent of those in our survey—derives very high levels of benefits from Web 2.0’s widespread use, involving employees, customers, and business partners […]”

[Fyi the bullet points in this quote have been selectively edited for readability]

Next posts

The remaining posts in the series:

  1. This one
  2. Quotes re how McKinsey’s statistical analysis shows businesses being successful because of Web 2.0
  3. Detailed survey information, in the form of two graphs
  4. Supplementary information

UPDATE 19/01/11 – why did I say “in a concise manner” when it clearly isn’t! ;$

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