May 2016
Not all social technologies bring equal benefits. In a new survey, respondents say the most valuable tools make it easier for employees to collaborate—and could even transform the way organizations work.
While social technologies have become ubiquitous in business, not all tools—or the benefits companies see from their use—are created equal. Indeed, results from the latest McKinsey Global Survey on social tools suggest that a new generation of tools is enabling employees to collaborate in improved and innovative ways.1 Respondents say improved internal communication is the feature of social tools that has most benefited their businesses. They also expect that, in the coming years, enabling better communication will be one of the ways these tools could bring about fundamental changes at their organizations.
The results also suggest that social tools play a critical role in how technology overall can encourage organizational change. We asked executives about their companies’ use of social tools, digital technologies, and big data in 18 different business processes; the clear consensus is that using social begets better use of these other technologies. When organizations digitize a process’s work flow (which happens most often with customer-facing processes), respondents say that using social tools in that same process has enabled their companies’ overall digital efforts. What’s more, some executives report greater benefits—decreased costs and increased productivity, for example—if they digitize and use social tools in a given process. Several benefits are greater still if the company uses data collected from social interactions among employees and with customers.
A new generation of social tools
Executives report that the business use of social tools is nearly universal. Ninety-three percent of respondents say their companies use at least one social technology, continuing an upward trend (82 percent said so in the previous two surveys).2 And most respondents say employees at their companies use at least one tool on mobile devices. In addition, 74 percent say social tools are at least somewhat integrated into employees’ work—up from 67 percent in the past two years.
Although social technologies are more and more commonplace, the results suggest that not all tools are created equal. Specifically, those that can enable collaboration among employees are the most valued—increasingly important, since 80 percent of executives, up from 69 percent in 2014, say their companies use these tools for internal purposes.
When asked about the most beneficial features of the social tools their companies use, respondents most often cite real-time interactions, the ability to collaborate with specific groups, and cross-platform availability (Exhibit 1). What’s more, respondents believe the same three features will most improve how people work at their organizations in the future.
Enter a new generation of team-collaboration technologies. These tools are cloud based, designed for real-time interactions, allow users to search conversations, provide a distinctive user experience, and integrate with other enterprise applications (such as file sharing and social media), among several other features.3 Because they create searchable content as a by-product of collaboration, the new-generation tools could even begin to replace email as the default channel of written communication.4
Few companies are putting these tools to work. But at the ones that are, executives report above-average benefits from social technologies. They are much likelier than average to say that social tools are extremely integrated into employees’ daily work and that at least half of their business activities have been digitized (Exhibit 2). And while most companies tend to use social tools in external-facing processes, such as marketing activities and public relations, adopters of new-generation technologies report broader use of social across the organization. They are much likelier than average to use social in internal processes, such as R&D and IT management.
How social technologies move digitization forward
Improved collaboration is not the only way social tools can benefit companies. As more and more companies are using digital technologies and activities in individual business processes, the results suggest that social tools play a key role in digitizing the business.
At the process level, most executives say their companies have focused both their social and their digital efforts on external, customer-facing processes, such as public relations, marketing, and customer relationship management, or CRM (Exhibit 3). By contrast, much smaller shares report that internal processes use social tools or have incorporated digital activities into the work flow: 9 percent of executives say their procurement processes include digital activities, compared with 37 percent who say so for CRM. Responses vary by industry, with executives at high-tech firms reporting the greatest progress in digitizing most processes. But even these companies have more to do. Those in high tech, like all other respondents, are more likely to be digitizing customer-facing processes than internal ones.
To digitize all processes, both internal and external, the results suggest that social tools can help. For every process where their companies are digitizing and using social tools, respondents agree that social technologies have enabled their use of digital overall. This is true even for the back-office processes where few respondents now say their companies are using social tools. In fact, social’s effect on digitization is greatest for the internal processes where social tools and digital activities are least common. Executives report the strongest correlation between social’s enablement of digital and the adoption of digital activities in their order-to-cash, demand-planning, R&D, supply-chain-management, and procurement processes (Exhibit 4).
Other results support the notion that, when a company looks to technology to improve its processes, the benefits are greater when social and digital tools are used together. When a process has been digitized, respondents also report a greater benefit from the use of social tools. For example, when marketing plans are digitized, executives credit social tools with a 27 percent increase in converting customers—compared with an average increase of 20 percent.
Digital globalization: The new era of global flows Read the report The effect is more powerful, too, when companies use data from social interactions along with the social tools themselves. At companies where marketing-plan development is digital and data from social interactions with customers are used, respondents report a 31 percent increase in customer conversion from using social tools. On average, executives report only a 20 percent increase in conversion.
How social tools can reshape the organization
Beyond the specific benefits that social can bring to companies, these tools—and their relationship with digital and data-driven activities—have broader implications for the organization as a whole. We asked executives which changes to structural and management processes they believe social technologies will bring to their organizations in the next three years. Not only do two-thirds expect communication will improve, but almost half believe their organizations will become much more fluid—that is, that work will be project based and will not necessarily happen within teams or functions (Exhibit 5).
At some companies, respondents are even likelier than others to expect their organizations will evolve. The greater the number of processes involving social tools, the more likely executives are to expect that each of the 11 changes we asked about will happen. The same is true at fully networked companies, which are reaping the greatest level of benefits from using social. It’s true, too, of companies using next-generation team-collaboration tools. Executives at these companies are more likely to expect that in the next three years, work can become more project based; 66 percent say so, compared with 48 percent of all respondents (Exhibit 6). More dramatically, 72 percent at companies using next-generation tools expect social technologies will enable teams to self-organize, compared with 40 percent overall.
Take advantage of technologies. Many executives report significant benefits from using a new generation of team-collaboration tools that could replace email as the default channel for workplace communication. Historically, the social technologies we have tested in previous surveys have been used most often with customers and in external processes. But the latest results suggest that social tools (specifically, newer team-collaboration tools) promise new levels of internal benefits and—eventually, through better employee communication—could bring about more profound changes in the organization. While collaboration-based tools are still somewhat novel, many companies have a lot to gain by testing (and using) these tools as part of broader efforts to harness technology more effectively in the business and improve the ways their employees work.
Use social to drive both organizational change and digitization. As past surveys have shown and the latest results confirm, organization and technology are closely connected. Social tools influence the flow of information across a company, which enables changes in how people work and, eventually, new forms of organizations. As organizations face growing demands to become more agile, social technologies will enable companies to experiment further with new corporate structures and processes that are more project based, self-organizing, and less hierarchical. Social tools can also complement the use of other technologies; according to respondents, companies see even more benefits from social when they digitize business processes and use data-driven insights at the same time. Thus, the best companies will combine all three types of technologies—digital, social, and big data and analytics—to create competitive advantage.
Focus on next-generation features. For the companies creating social tools, the results suggest a few issues to consider for future products. First, they should focus on developing the same features that the newest tools offer, such as searchability, a well-designed user experience, and easy integration with business applications. Second, their tools should make it easier for employees to access the most relevant information as soon as they need it—increasingly important as the amount of information that’s shared through social continues to grow. Finally, the tools should make it easier for organizations to measure the impact that social technologies are having on their businesses.
About the author(s) The contributors to the development and analysis of this survey include Jacques Bughin, a director of the McKinsey Global Institute (MGI) and a director in McKinsey’s Brussels office; Michael Chui, a principal at MGI based in the San Francisco office; and Martin Harrysson, a principal in the Silicon Valley office.
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