Business Collaboration ROI has been hotly debated over the past 12 months. C-Level executives want to know if the benefits are real (meaning a quantifiable ROI on social networking tools for business collaboration) or if “social” is just the current buzzword of the day. McKinsey & Company, one of the most respected management consulting firms in America, decided to settle this debate by conducting a full investigation into the merits and business Collaboration ROI generated by Social Networking Tools in the workplace. McKinsey interviewed executives at 4,200 companies all over the world. The findings were released earlier this year and honestly, they were a bit shocking.
Social Networking Tools and Technologies Create Over $1 Trillion in Value
Overall, McKinsey estimated that social networking tools and technology had unlocked between $900 billion and $1.3 trillion in business collaboration ROI. To put it in perspective, you’d have to save one million dollar a day for one million days in a row (2,740 years) to equal one trillion in value creation. The benefits seem to be real indeed. Even if McKinsey’s estimate is off by 50%, that still leaves about $500 billion in value creation. As the tool costs are negligible (see Best Enterprise Social Software Vendors), all of this value creation is directly attributable as ROI on Social Networking.
Enterprise Social Networks Raise Worker Productivity 20%-25%
More specifically, McKinsey estimates two-thirds of the value created by social networking tools and technologies lies in improving communications and collaboration within and across enterprises. The ROI on Enterprise Social Networks comes in the form of more productive, more connected, and more informed workers. McKinsey believes knowledge workers are 20%-25% more productive once social networking tools and technologies are implemented within the organization. Another staggering finding from the McKinsey study was that the average knowledge worker spends 28 hours each week writing emails, searching for information, and collaborating internally. That’s 70% of their time! Imagine what workers could achieve if they had access to more efficient tools which allowed them to effortlessly communicate, collaborate, and immediately find information. How many extra hours could a company get out of workers each week? A 25% increase in productivity is starting to sound awfully conservative.
Business Collaboration ROI – The Evidence is Overwhelming
72% of companies are now using some form of social technology. And of those using social technologies, 90% report that they are realizing business benefits. Realizing the gains and achieving an ROI on Enterprise Social Networks will require significant transformations in management practices and organizational behavior. Social networks within the enterprise have the potential to be this decade’s biggest impact on how business gets done. Email is not going away, but our reliance on email for everything (communication, collaboration, file sharing, etc.) is sure to change rapidly over the next few years as Enterprise Social Networks continue to prove their value. Read the full McKinsey report: “The Social Economy: Unlocking Value and Productivity through Social Technologies”.