McKinsey's look into Web 2.0 in the enterprise

The collection of techniques and technologies known as Web 2.0 is really only just beginning to have an affect on the enterprise.

The collection of techniques and technologies known as Web 2.0 is really only just beginning to have an affect on the enterprise. We are in that phase of market development where in Web 1.0 enterprises just started to realize that the internet is the new brochureware. Enterprises are starting to say, “We want a conversation with our customers.” New employees coming into even some of the largest companies are saying that they want an experience like MySpace, Facebook and YouTube and those companies are listening. But how do they do that? And do they really know what Web 2.0 really is? Middle aged men and women run these enterprises and generally don’t quite get what is going on. (Actually, I am at least middle age as long as I live to be 100.) Their kids use MySpace, Facebook and Bebo, but the closest they may have gotten to Web 2.0 is look up something in Wikipedia or watch a video on YouTube. Yet they know something is happening, because they got burned the last time around not paying attention to what was happening on the internet.

McKinsey Quarterly, the archetypal analytical journal of the business establishment, has surveyed these executives and their attitudes toward Web 2.0. As the summary states:

“More than three-fourths [of surveyed executives] say they plan to maintain or increase their investments in technology trends that encourage user collaboration, such as peer-to peer networking, social networks, and Web services.”

“More than half say they are pleased with their past internet investments, though some regret not boosting their own capabilities to exploit technology. More executives said they should have acted faster than slower.”

Clearly these executives believe they should be embracing these trends. However, do they really understand the significance of these trends or what Web 2.0 really is? The authors, Jacques Bughin in Brussels and James Manyika in San Francisco, write:

“Respondents…show widespread but careful interest in this trend. Expressing satisfaction with their Internet investments so far, they say that Web 2.0 technologies are strategic and that they plan to increase their investments. But companies aren’t necessarily relying on the best-known Web 2.0 trends, such as blogs; instead, they place the greatest importance on technologies that enable automation and networking.”

McKinsey collected data specifically on: web services, collective intelligence, peer-to-peer networking, social networking, RSS, podcasts, wikis, blogs, and mash-ups. Of these, 80% of all respondents said they plan on implementing web services. A little under half were considering collective intelligence and peer-to-peer networking. More said that they were not considering the rest than said that they were considering. These are technology bets rather than the engagement, trust and social networking that is characterizing the successful Web 2.0 sites.

Looking at the social and engagement aspects of Web 2.0, really only a third are planning some form of RSS, wiki, blogs and podcasts to establish conversations with their customers. We are probably seeing a repeat of what happened in the first wave the internet where the early adopters leave the laggards behind because the laggards just didn’t get it. It’s not the technology that makes MySpace, Facebook, YouTube, and Wikipedia different. It’s the social, visual and participatory engagement.

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