How businesses are using Web . : A McKinsey Global SurveyMore than three-fourths of executives who responded to a McKinsey Related articles on survey say they plan to maintain or increase their investments in trends that encourage user collaboration, such as peer-“A reality check for online to-peer networking, social networks, and Web services. advertising,”2006 Number 3More than half say they are pleased with their past Internet investments, though some regret not boosting their own capabilities “Creation nets: Getting the most to exploit technology. More executives said they should have acted from open innovation,”faster than Number 2Retailers, who consider their companies cautious investors in the “From push to pull: The next frontier past, are stepping up their pace today. Similarly, many executives in of innovation,”emerging markets such as India and Latin America intend to move 2005 Number 3more quickly to capture the perceived benefits of these -François Martin
2How businesses are using Web . : A McKinsey Global SurveyBy and large, executives are satisfied with their previous investments in Internet technology, and most are investing in trends that promote automation and networking rising popularity of user-driven online plan to increase these investments. But services, including MySpace, Wikipedia, and companies aren’t necessarily relying on the YouTube, has drawn attention to a group best-known Web . trends, such as blogs; of technological developments known as Web instead, they place the greatest importance . . These technologies, which rely on user on technologies that enable automation and collaboration, include Web services, peer-to-peer , blogs, podcasts, and online social to a recent McKinsey survey show widespread but careful interest in this trend. Expressing satisfaction with their Internet investments so far, they say that Web . technologies are strategic and that they The McKinsey Quarterly conducted this survey in January and received responses from , executives worldwide, percent of whom hold C-level positions; all data are weighted by GDP of constituent countries to adjust for differences in response : McKinsey survey on Internet technologies
3Successful investments so farMore than half of the executives surveyed say Companies that acted quickly in the previous they are pleased with the results of their wave of investment are more satis ed than late investments in Internet technologies over the movers. Less than a fth of all those surveyed past ve years, and nearly three-quarters say say they are very satis ed with their returns. that their companies plan to maintain or Of those who rate themselves as very satis ed, increase investments in Web . technologies in percent are “early adopters” and per- coming years. (A mere percent say they cent “fast followers” (Exhibit ).are disappointed with previous investments.) Survey 2007Internet surveyExhibit 1 of 7Glance:Exhibit title: Different outlooksExhibit 11% of respondentsDifferent outlooksHow satis ed are you with your company’s nancial return on investment in Web . technologies over the past 5 years?Early adopterFast follower100%n =2Very satisfied46444642Somewhat satisfied24621,0092Neutral9417442Dissatisfied931182 Respondents whose companies were late followers or did not invest are not shown. Very satis ed = paid off beyond expectations and/or faster than expected; somewhat satis ed = paid off as expected and in reasonable amount of time; neutral = paid off as expected but took longer than had been hoped; dissatis ed = didn’t pay off as expected or the payoff has taken too long. Source: McKinsey Survey on Internet technologiesSource: McKinsey survey on Internet technologies
4Asked what might have been done differently to (Exhibit ). Among the percent who say they make the previous investments in Internet would have moved faster, many describe their technologies more effective, only percent say companies as fast followers or early adopters— they would not have acted differently. Forty- a strategy consistent with the view that speed two percent say they would have strengthened is of the essence in technology companies’ internal capabilities to make the most of the market opportunity at hand Survey 2007Internet surveyExhibit 2 of 7Glance:Exhibit title: Rethinking investmentsExhibit 21Rethinking % of respondents (n = 2,623)investmentsGiven hindsight, what might your company have done differently during the past 5 years to make more effective investments in Web . technologies?Invested at the right time but should have invested more in our company’s 42internal capabilitiesShould have invested sooner in technology that in the meantime had a significant 24impact on our industryWouldn’t do anything differently18Invested at the right time but overestimated 10the market potentialShould have waited for technology to be developed further (that is, be less expensive 7and/or better able to meet our needs)Other3 Respondents who answered “don’t know” are excluded; gures do not sum to %, because respondents could select multiple answers. Source: McKinsey Survey on Internet technologiesSource: McKinsey survey on Internet technologies
5What’s next?Among the execuFew executives say that their companies are tives familiar with the nine Web using more than two of these technologies. But . trends cited in the survey (see the nearly two-thirds of those whose companies sidebar, “What’s in Web . ”), more than three-are investing in them think they are important fourths say that their companies are already for maintaining the company’s market posi- investing in one or more of these trends. The mostion, either to provide a competitive edge or t frequently cited investment is Web services, beto match the competition and address customer ing used or considered by percent of the demand. More than one-third labeled them respondents familiar with the tools. Peer-to-peer ne“experimental.”tworking also is popular; percent say they are using or considering it (Exhibit ). Survey 2007Internet surveyExhibit 3 of 7Glance:Exhibit title: Popular betsExhibit 31Popular bets% of respondentsUsing or planning to useNot under considerationIs your company investing in any of the following Web technologies or tools?Web services806(n = 2,615)Collective intelligence4826(n = 1,987)Peer-to-peer networking 4728(n = 2,345)Social networking 3739(n = 2,173)2RSS3542(n =1,755)Podcasts3540(n = 2,325)Wikis3339(n =1,705)Blogs3243(n = 2,431)Mash-ups2154(n =1,046) Respondents whose investment plans are uncertain are not shown; respondents who answered “not familiar enough to say” or “don’t know” are excluded. Really Simple Syndication. Source: McKinsey Survey on Internet technologiesSource: McKinsey survey on Internet technologies
6Executives from some industries and regions were more likely than the average company to that were slow to invest during the past ve invest cautiously in the past, now overwhelm- Survey 2007years are poised to move more aggressively now. ingly say they will step up investment in Web Internet surveyFor example, retail executives, whose companies . technologies in the coming years (Exhibit ).Exhibit 4 of 7Glance:Exhibit title: Interest is high in IndiaExhibit 4% of respondentsInterest is high What are your company’s plans for investing in Web technologies over the in Indianext3 years?Investment in these types of technologies will increaseBy industryBy regionRetail77India80High tech74Asia-Pacific69Telecommunications70Europe65Financial services63China64Pharmaceuticals53North America64Latin America62 Source: McKinsey Survey on Internet technologiesWhat’s in Web Blogs (short for Web logs) are online journals or diaries hosted on a Web RSS (Really Simple Syndication) allows people to subscribe to online site and often distributed to other sites or readers using RSS (see below).distributions of news, blogs, podcasts, or other information. Collective intelligence refers to any system that attempts to tap the Social networking refers to systems that allow members of a specific expertise of a group rather than an individual to make decisions. site to learn about other members’ skills, talents, knowledge, or Technologies that contribute to collective intelligence include collabora- preferences. Commercial examples include Facebook and LinkedIn. Some tive publishing and common databases for sharing use these systems internally to help identify -ups are aggregations of content from different online sources Web services are software systems that make it easier for different to create a new service. An example would be a program that pulls systems to communicate with one another automatically in order apartment listings from one site and displays them on a Google map to to pass information or conduct transactions. For example, a retailer and show where the apartments are might use Web services to communicate over the Internet and automatically update each other’s inventory -to-peer networking (sometimes called P2P) is a technique for efficiently sharing files (music, videos, or text) either over the Internet Wikis, such as Wikipedia, are systems for collaborative publishing. They or within a closed set of users. Unlike the traditional method of allow many authors to contribute to an online document or a file on one machine—which can become a bottleneck if many people try to access it at once—P2P distributes files across many machines, often those of the users themselves. Some systems retrieve files by gathering and assembling pieces of them from many machines. Podcasts are audio or video recordings—a multimedia form of a blog or other content. They are often distributed through an aggregator, such as : McKinsey survey on Internet technologies
7survey varies across regions, with China being a Similarly, while executives from China and fast adopter. The use of and plans for Web . Latin America typically say that their technologies in general are well balanced companies are late followers or had invested globally (Exhibit ), although some locations cautiously, they now plan to invest at the same (such as India) stand out for their enthusiasm. rate or even faster than companies in Europe and North America. The level of investment in each of the Web . technologies cited in this Survey 2007Internet surveyExhibit 5 of 7Glance:Exhibit title: A choice of technologiesExhibit 5A choice % of respondents using or planning to use Web technologiesLowMediumHighof technologiesOtherLatinNorthdevelopingAsia-PacificChinaEuropeIndiaAmericaAmericamarketsBlogs25202629233219Collective32373533313035intelligenceMash-ups76810586Peer-to-peer 43503839433739networks1RSS19202018172520Social22363029282729networksWikis19102326172012 Really Simple Syndication. Source: McKinsey Survey on Internet technologiesSource: McKinsey survey on Internet technologies
8Why Web say they are using Web . Respondents report that to communicate with technologies to communicate with customers business partners and, secondarily, to achieve and business partners and to encourage tighter integration with suppliers, companies collaboration inside the company (Exhibit ). are using Web services, peer-to-peer networking, Seventy percent say they are using some collective intelligence, RSS (Really Simple combination of these technologies for Syndication), and peer-to-peer networking. communicating with their customers. For example, about one- fth of them say they are Companies are using the same technologies to using blogs to improve customer service or help manage knowledge internally. Just over solicit customer of respondents say they used one or more Web . technologies for that purpose. Just under half use these tools for designing and developing new products—for example, setting up systems to gather and share 2007Internet surveyExhibit 6 of 7Glance:Exhibit title: How they use themExhibit 6% of respondents who report using Web technologiesHow they use themRespondents report using some combination of technologies to . . .New customers, Customer-to-business 1new markets4719feedbackInterface with 70customers34Customer servicesPurchasing17Better interface Interface with 51integration, better suppliers, partnerscommunication83Knowledge51managementManage collaboration 75internallyProduct design, 49development Sum of responses for entering new markets and acquiring new customers in existing markets. Source: McKinsey Survey on Internet technologiesSource: McKinsey survey on Internet technologies
9Finally, among the executives surveyed, podcasts, and mash-ups trail technology trends technologies for automation and collaboration that allow people to contribute knowledge to a appear to be gaining more traction than some common effort or allow machines to exchange Survey 2007of the technologies that have received more information more surveyattention in the press (Exhibit ). Blogs, Exhibit 7 of 7Glance:Exhibit title: Business relevance drives usageExhibit 7Business relevance % of respondentsdrives usageIs your company investing Identify the 3 technologies or in any of the following Web that are most important to technologies or tools?your business.(n = 2,847)(n = 2,433)Web services6378Peer-to-peer networks2834Collective intelligence2130Social networks1919Podcasts1717Blogs16171RSS1412Wikis1310Mash-up43 Really Simple Syndication. Source: McKinsey Survey on Internet technologiesQ The contributors to the development and analysis of this survey include Jacques Bughin, a director in McKinsey’s Brussels of ce, and James Manyika, a director in the San Francisco of ce. Copyright McKinsey & Company. All rights : McKinsey survey on Internet technologies
