Thursday, July 31, 2008

Use of Web 2.0 Tools

Back in the spring Forrester released a report that predicted that enterprise spending on Web 2.0 technologies will grow to $4.6 billion by 2013. Since they estimate $764 million in 2008, that’s a high rate of growth! That alone is interesting, but what I thought was especially interesting was the fact that they find enterprises currently spending more on internal uses of Web 2.0 tools than on customer-facing uses. Forrester expects that trend to reverse by next year, with customer-facing uses taking precedence and growing faster over the next five years. You'll find more detail here.

McKinsey has just released a study that sheds more light on what’s going on. They also find companies using Web 2.0 tools more for internal purposes than for external. Web services leads the way because this collective set of tools makes it easier to exchange information and conduct transactions; the importance of both being obvious. Nevertheless, the lowest rate of usage is with partners and suppliers where both information sharing and ease of transactions are key to smoothly-functioning supply chains.

The McKinsey study also finds differences in satisfaction with results of using Web 2.0 tools, with only 21% extremely or very satisfied with their experiences with both internal and external uses. There are also substantial global differences in the use of tools (enterprises in the US are more likely to use social networks, for example). They note that the list of tools was expanded for this study; I wonder if that will be an annual occurrence! The entire report can be accessed on the McKinsey Quarterly site (free registration required).

One of the breakdowns by satisfaction level concerns the barriers to successful deployment of Web 2.0 tools. None of them are surprising--except maybe that 25% say there are no barriers. Only 15% of respondents say that the leadership of their companies doesn’t encourage the use of Web 2.0 technologies, but 49% of respondents who are not satisfied with their Web 2.0 results say that. Why does that not surprise me!

I see two major take-aways from these two important studies:

1. Internal use of Web 2.0 technologies provides important benefits to the enterprise. Improving business operations in a variety of ways is the obvious one. Making the enterprise comfortable with the technologies and the changes they require—in management and in dealing with customers—is less obvious but perhaps more important in the long run.

2. The leadership of top management is needed to facilitate the adoption of Web 2.0 tools in the enterprise. Without it, there will be less use of important new technologies and the uses that are implemented will have less satisfactory results.

Important lessons about marketing in the Web 2.0 world have been reinforced once again!

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