Web 2.0 tools present a vast array of opportunities—for companies that know how to use them.
February 2009 • Michael Chui, Andy Miller, and Roger P. Roberts
Technologies known collectively as Web 2.0 have spread widely among consumers over the past five years. Social-networking Web sites, such as Facebook and MySpace, now attract more than 100 million visitors a month. As the popularity of Web 2.0 has grown, companies have noted the intense consumer engagement and creativity surrounding these technologies. Many organizations, keen to harness Web 2.0 internally, are experimenting with the tools or deploying them on a trial basis.
Over the past two years, McKinsey has studied more than 50 early adopters to garner insights into successful efforts to use Web 2.0 as a way of unlocking participation. We have surveyed, independently, a range of executives on Web 2.0 adoption. Our work suggests the challenges that lie ahead. To date, as many survey respondents are dissatisfied with their use of Web 2.0 technologies as are satisfied. Many of the dissenters cite impediments such as organizational structure, the inability of managers to understand the new levers of change, and a lack of understanding about how value is created using Web 2.0 tools. We have found that, unless a number of success factors are present, Web 2.0 efforts often fail to launch or to reach expected heights of usage. Executives who are suspicious or uncomfortable with perceived changes or risks often call off these efforts. Others fail because managers simply don’t know how to encourage the type of participation that will produce meaningful results.
Some historical perspective is useful. Web 2.0, the latest wave in corporate technology adoptions, could have a more far-reaching organizational impact than technologies adopted in the 1990s—such as enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (Exhibit 1). The latest Web tools have a strong bottom-up element and engage a broad base of workers. They also demand a mind-set different from that of earlier IT programs, which were instituted primarily by edicts from senior managers.
Web 2.0 covers a range of technologies. The most widely used are blogs, wikis, podcasts, information tagging, prediction markets, and social networks (Exhibit 2). New technologies constantly appear as the Internet continues to evolve. Of the companies we interviewed for our research, all were using at least one of these tools. What distinguishes them from previous technologies is the high degree of participation they require to be effective. Unlike ERP and CRM, where most users either simply process information in the form of reports or use the technology to execute transactions (such as issuing payments or entering customer orders), Web 2.0 technologies are interactive and require users to generate new information and content or to edit the work of other participants.
Earlier technologies often required expensive and lengthy technical implementations, as well as the realignment of formal business processes. With such memories still fresh, some executives naturally remain wary of Web 2.0. But the new tools are different. While they are inherently disruptive and often challenge an organization and its culture, they are not technically complex to implement. Rather, they are a relatively lightweight overlay to the existing infrastructure and do not necessarily require complex technology integration.
