Social Technologies and Business: Trends, Market Forces

6 minute read
Craig Malloy avatar

McKinsey Global Institute published a very comprehensive study this past summer in which they claimed that the use of social technologies within businesses has the opportunity for US$ 900 billion - 1.3 trillion of value creation.And this isn't just social technologies as in your company has a Facebook page -- they are talking about transforming the way companies interact, collaborate and share data, information and knowledge with their customers, suppliers and employees.

This is truly transformational stuff.The basic math as reported by McKinsey goes something like this:

  • 1.5 billion social networking users globally
  • 70% of companies use social technologies
  • 90% report business benefits from them
  • 28 hrs/wk of knowledge worker time spent searching for information, collaborating and email
  • US$ 600-800 billion of value creation opportunity around improving communication and collaboration within businesses
  • 20-25% potential improvement possible in knowledge worker productivity

So I thought it would be interesting to explore some of the underlying trends, market forces and technologies that are allowing this astounding movement.

It’s Very Cloudy Today

What is popularly known as the “The Cloud” is really an amazing new network of data centers who rent their storage, compute, bandwidth, development tools and management.This has allowed companies, big and small, new and old to build new useful applications at an incredible pace for individuals and businesses alike.

You can summon a limousine to the exact spot where you are standing in just minutes, rent a vacation home in Bali or onboard your new office staff in Bangalore or Prague while you sleep. Nothing seems impossible anymore.

The Era of Big PC is Over?

The current crop of mobile devices, smart phones to tablets and “tweeners” provide unbelievable capabilities in the palm of everyone’s hand.After 30 years of dominance by the personal computer for home and business use, mobile is completely upending the global PC market whose shipments actually declined 8 percent last quarter. And this shift is happening at an unbelievably rapid rate.

Getting Social

The first two trends above have surely enabled and accelerated this one.Ever look around in an airport gate area waiting for your plane? Probably not, because you were glued to your phone looking at your Instagram and Twitter feeds.

But if you did, you would find that everybody else is doing the same thing.And the social experience that has changed the way you interact with your friends, family and old girlfriends on Facebook now informs the way you want to find information, share knowledge and connect with experts at work.You want that same instant gratification of searching and finding exactly what you need to know, when you need to know it.

Cloud, mobile, social is now starting to radically changing the way we do our jobs as well. And it’s very cool and likely very disruptive.

It is also fundamentally changing some very large and previously distinct, well-defined product categories and markets. Content Management,Enterprise Social Networking,Learning Management Systems and Cloud File Sharing have all existed for years (some longer than others) as separate markets whose incumbent companies developed useful but unique capabilities and value for the businesses they served.

Content Management Systems were created to create, store, manage and distribute text, images and other files. Enterprise Social applications were initially envisioned as “Enterprise micro-blogging” for status and update streams perhaps replacing email.

Business focused Learning Management Systems were designed solely on top-down on line training courses and Cloud File Sharing began as a way for people and business to cheaply and easily store their data in the Cloud in lieu of local backup drives.Not too long ago Sharepoint, Jive, Dropbox and Blackboard certainly would not have considered the others competitors nor on a fast track to be so. Now, I’m not so sure.

What do you call a cloud hosted content website with shared access, a mobile app, revision history and a way to add comments and notifications to each post? Is that a content management system, a cloud drive or a feature in a social enterprise network system?

Learning Opportunities

Or what about a hosted application that has all the content that a new employee needs to learn to do their job, but much of it has been created and is constantly updated by their peers and the entire community is available 24/7 to answer their questions?Is that a Learning Management System or something else?

Not so clear anymore, is it? These formerly distinct markets are now starting to converge, or at least heavily overlap where it will soon be hard to notice where one stops and the other begins.

Building a Knowledge Sharing Culture

But, if you think about it for a moment, this really makes sense.Because, after all, the point of all of these systems and product categories, no matter what you call them, is about building a knowledge sharing culture within your company. That’s the greatest benefit that they can provide.

It’s about the ability to rapidly access expertise and stored knowledge, ask questions and generate collectively derived answers, discuss topics in open communities, find and interact with others who have the information, and better yet, the wisdom you need to do your job and learn new skills.

These are the mission critical activities that every company needs.And this is what is driving toward this product category overlap. Why just share files and manage content and send out update and activity streams when you can share valuable knowledge instead?The benefits are potentially exponential when they are opened to customer and partner interactions as well as just internal communities.

The challenging aspect of this shift and why it will take some time is that it requires a change of old habits at work.The change is probably most profound at the company policy level as executives and managers wrestle with old notions of hierarchy, command and control, transparency of confidential information and perhaps risk of reputations as experts can spring up and make themselves known at any level or location in the company.

But the exciting thing is that your employees are ready for this change because they have already completely immersed themselves in this new cloud, mobile social world outside the office and are impatient for you to give them the same types of modern tools at work.And the payoff is so compelling that companies will eventually find ways to implement them or they will be left in dust by their competitors.The best companies and leaders, as usual, will embrace it first.

Cloud, mobile and social have already profoundly, and mostly for the better, changed our personal lives.But it is still just getting started and even more in its infancy at the office. I can’t wait to see what comes next!

Editor's Note: Interested in reading more of Craig's thoughts? Check out The Service Economy and the New Role of the Enterprise CMS

About the author

Craig Malloy

Craig Malloy, CEO of Bloomfire, an Austin startup that offers knowledge sharing applications for teams and organizations. Craig previously served as Founder/CEO of ViaVideo (acquired by Polycom), Founder/CEO LifeSize (acquired by Logitech), and is a former Navy officer.