I just read a fascinating (and lengthy!) report from McKinsey on tech-enabled business trends to watch and thought it was important enough to summarize for our community. Here are some highlights from this excellent report:
1. Crowd-sourcing moves into the mainstream
In the past few years, the ability to organize communities of Web participants to develop, market, and support products and services has moved from the margins of business practice to the mainstream. Wikipedia and a handful of open-source software developers were the pioneers. But in signs of the steady march forward, 70 percent of executives recently surveyed said that their companies regularly created value through Web communities.
Intuit hosts customer support communities for its financial and tax return products to lower customer service costs by 90 percent.
P&G created a social network of influential mothers (Vocalpoint) to drive word-of-mouth marketing. In markets where Vocalpoint influencers are active, product revenues have doubled.
Facebook has marshaled its community for product development, recruiting 300,000 users to translate its site into 70 language. The entire French Facebook site was translated in one day.
2. Making the network the organization
Companies are pushing substantially beyond crowdsourcing to build and manage flexible employee networks that extend across internal and external borders. The recession underscored the value of such flexibility in managing volatility.
At one global energy services company, geographic and business unit boundaries prevented managers from accessing the best talent across the organization to solve client problems. Help desks supported engineers, for example, but rarely provided creative solutions for the most difficult issues. Using social-network analysis, the company mapped information flows and knowledge resources among its worldwide staff. The analysis identified several bottlenecks but also pointed to a set of solutions. Using Web technologies to expand access to experts around the world, the company set up new innovation communities across siloed business units. These networks have helped speed up service delivery while improving quality by 48 percent.
Dow Chemical set up its own social network to help managers identify the talent they need to execute projects across different business units and functions. To broaden the pool of talent, Dow has even extended the network to include former employees, such as retirees.
Other companies are using networks to tap external talent pools. These networks include online labor markets (such as Amazon.com’s Mechanical Turk) and contest services (such as Innocentive and Zooppa) that help solve business problems.
3. Knowledge worker productivity
Knowledge workers typically are highly-paid employees, so increasing their productivity is critical. Collaboration technologies are emerging to do just that.
Video and web conferencing are expected to grow at a rate of 20 percent annually.
At one high-tech enterprise, the sales force became a crucible for testing collaboration tools. The savings on travel were four times the company’s technology investment. Customer contacts per salesperson rose by 45 percent, while 80 percent of the sales staff reported higher productivity and a better lifestyle.
The US intelligence community made wikis, documents, and blogs available to analysts across agencies (with appropriate security controls, of course).
Bechtel established a centralized, open-collaboration database of design and engineering information to support global projects. Engineers starting new ones found that the database, which contained up to 25 percent of the material they needed, lowered launch costs and sped up times to completion.
The next leap forward in the productivity of knowledge workers will come from interactive technologies combined with complementary investments in process innovations and training.
4. Growing the ‘Internet of Things’
With RFID technologies, products themselves are becoming elements of an information system, with the ability to capture, compute, communicate, and collaborate around information — something that has come to be known as the “Internet of Things.”
Embedded with sensors, actuators, and communications capabilities, such objects will soon be able to absorb and transmit information on a massive scale and, in some cases, to adapt and react to changes in the environment automatically. These “smart” assets can make processes more efficient, give products new capabilities, and spark novel business models.
Auto insurers in Europe and the United States are installing sensors in customer’s vehicles. The result is new pricing models that base charges for risk on driving behavior rather than on a driver’s demographic characteristics.
In medicine, sensors embedded in patients continuously report changes in health conditions to physicians, who can adjust treatments when necessary.
Sensors in manufacturing lines for products as diverse as computer chips and pulp and paper take detailed readings on process conditions and automatically make adjustments to reduce waste, downtime, and costly human interventions.
Read the article and the rest of the list here.