The rise of the networked enterprise
I’ve come across an interesting McKinsey article on the rise of the networked enterprise where web technologies are being deployed to improve corporate performance. The survey offers several interesting findings that support an organisations adoption of this technology for productivity improvement.
According to McKinsey, the networked enterprises which proactively collaborate with both internal & external stakeholders report significant performance improvements and operational efficiencies. Some of the findings assert that the take up of Enterprise 2.0 technologies continues to grow with up to 40% of companies surveyed maintaining some form of social networks. Of these organisations, almost half believe that most of their Employees are actively engaged with the technology. This number can only continue to rise in the future as the demarcation between personal and professional use of these applications continues to blur. What’s encouraging is that more organisations have indicated that planned expenditure on Enterprise 2.0 technologies will be higher than in prior years.
Some of the measurable benefits listed in the report are more tangible than others but all indicate a degree of improvement over previous years:
• Speed of access to knowledge and subject matter experts
• Reduction in communication, operational & travel costs
• Increased innovation, customer satisfaction and revenue
Overall these metrics present the view that Enterprise 2.0 technologies are both taking hold within organisations and are now offering real benefits year on year. For this trend to continue, emerging technologies and consequently new ways of doing business must continue to be adopted.
A key finding from this Survey is that integration with organisational day-to-day activities is critical to the successful uptake/implementation and benefits realisation of Enterprise 2.0. Those organisations using social technologies internally benefit from improved process agility, knowledge sharing and collaboration across the business. Obviously organisations that embrace their entire internal and external networks benefit from a high degree of collaboration and stronger relationships amongst staff, customers & partners through improved information flows.
To measure any improvements in reported performance metrics, McKinsey have presented three core indicators and their findings –
1. Market share gains – correlation with networked organisations
2. Higher operating margins – aligns with more granular decision making and organisational agility
3. Market leadership – supported by the internal use of Enterprise 2.0
From these metrics, McKinsey make the observation that as fully networked organisations (internally & externally connected) apply the lessons learnt from prior stakeholder interactions to future relationships, their competitive advantage will improve. This study supports what we have been saying for some time now; incorporate collaborative applications, drive their usage, attack organisational silos and embrace external stakeholders. Will be interesting to see next year’s statistics…