McKinsey Global Institute’s fifth annual survey on social technologies used by businesses revealed that more companies are improving the ways they use the technologies to enhance their operations and find new growth opportunities using social business.

The results of the 4,200 executives surveyed depended largely on their company’s efforts to maintain and improve its usage of social tools.

Of the responding companies, 72 percent report that they are using at least one type of social technology. Of the existing technologies, 50 percent use social networking, 41 percent use blogs, 38 percent use video sharing and 23 percent have microblogs. Specific industry use varied depending on the type of industry. 86 percent of telecommunications companies used at least one tool while only 62 percent of energy companies surveyed used a social technology tool.

Benefits and adoption of social technologies

Compared to the previous year’s survey, companies found little, if any, difference in the benefits of social technologies. Companies using technology for their employees’ benefit saw a small decrease in its effectiveness.

For example, three percent of reporting companies using social tools to increase the speed at which employees could access knowledge saw a decrease in its effectiveness.

Two percent found their social technologies less effective at reducing communication costs and one percent less effective as a means for employees to access internal experts than the year before.

Adoption rates of social technologies - McKinsey
Adoption rates of social technologies – McKinsey

Companies using social technology primarily for customer purposes, found a six percent increase in their marketing effectiveness from the previous year. These gains were overridden by three percent of the companies reporting a decrease in customer satisfaction and two percent reporting higher marketing costs.

The integration of social technologies in the business ecosystem and employees’ day-to-day work

Organizations reporting benefit gains when using technology to inform partners, suppliers and external-experts were the only companies that saw an across-the-board increase in its benefits:

  • 8% of the companies reported an increase in the speed of accessing knowledge.
  • 8% reported a reduction in communication costs.
  • 10% reported an increase in speed when accessing external experts.

While the majority of companies surveyed are in the developing stages of their social technology usage, the study also breaks its information down by internally networked, externally networked and fully networked companies.

Fully networked companies have the largest mean percentage in benefit improvements, followed by internally networked, externally networked and developing companies.

Of the reporting companies, 48 percent of the employees, 51 percent of customers and 64 percent of partners of fully networked companies used social technology tools that benefited the company. Of these companies, 80 percent report that social technologies are very integrated into their employees’ day-to-day work.

The reported benefits of using social technologies – McKinsey via MarketingCharts
The reported benefits of using social technologies – McKinsey via MarketingCharts

Answers to survey questions from corporations that reported market share gains show a correlation between the gains and the use of social technologies to scan external environments and match employees with specific tasks. These same companies report lower correlations between operating margins compared with their competitors and their use of social tools. Fully networked market leaders reported a decrease in the correlation between their leadership and their use of social tools from the previous year.

The future: blurring lines between customers, employees and vendors

Companies that promote the use of social technologies will see changes within the next three to five years if they continue exploring new options and using current tools effectively.

  • 35% of reporting companies are expecting the boundary lines between customers, employees and vendors to blur leading to increased satisfaction between all concerned.
  • 35% of the companies expect the development of self-organizing teams through the more effective communication brought about by the use of social technology tools.
  • 27% of reporting companies expect the elimination, or at least lessening, of an organizations formal hierarchy because it will be easier to make decisions as a group.

Regardless of where a company is in its use of social technologies, it must actively promote their use among its employees, customers and partners if it wants to see the available benefits. It is imperative that employees from executives on down realize the benefits for the company in order to understand, and decide, the best way to integrate existing and new technology into their company. And it’s clear that the main benefits of social technologies will go far beyond marketing tactics as they are used today but will be found in collaboration, productivity, intelligence and benefits for the overall business ecosystem.

You can check the full survey and analysis here

Source of additional graphic: MarketingCharts.