Tweak Your Biz » Global » Trillions Of Ways Social Technologies Can Help Business Save $$$$$

Trillions Of Ways Social Technologies Can Help Business Save $$$$$



I have just spent a number of days going through a remarkable 184 page document produced by McKinsey Global Institute (MGI). The title of the report is The Social Economy: Unlocking Value and Productivity Through Social Technologies.  This report shows what a tremendous advantage Social Technology is to the world of business. Here I am going to highlight some of these benefits to save you having to read 184 pages…

Advantages to business of social technologies

Product Development

  • Co-Create Products
  • Derive Customer Insights

Operations and Distribution

  • Leverage social to forecast and monitor
  • Use social to distribute business processes

Sales and Marketing

  • Derive customer insights
  • Use social technologies for marketing, communication and interaction
  • Generate and foster sales leads
  • Social commerce

Customer service

  • Provide customer care via social platforms

Enterprise wide levers, social as organisational technology

  • Use social technology to improve intra-or-inter organisational collaboration and communication
  • Use social technology to match talent to tasks

Reading that list you would wonder how the hell companies are dithering, the whole business cycle can now be effectively carried out via social technologies across all sectors of enterprise, both inside and outside the organisations.

The following are examples of social collaboration for business.

Cost reduction

  • Working from home
  • Social platform-based resource center for business critical documents and knowledge sharing
  • Sharing document with clients in the development stage of a project, saving turnaround time

These are three ways in which business can now adapt to the new technology that is the online social space. Like many I work from a home base and no longer have the costs associated with an office. All documents and knowledge sharing can be easily achieved online, which increases the speed in which my work colleagues can access the data. Bringing the clients into the development process early also leads to more efficiencies.

Eliminate emails

This is still seen as revolutionary as email is not that old and is part of the online space. This is one of the disruptive elements to social platforms, IBM’s Luis Suarez believes that the time wasted in dealing with unwanted and unnecessary emails is costing business millions of dollars.

He advocated for an internal IBM social platform and this has led to an huge efficiency increase, plus the internal benefit to IBM is that people are dealing with people through their online profiles, communities and friendships have developed within the company across international times lines that would never have occurred previously and Luis’ daily emails have dropped by over 90%.

Forecasting Market Demands

Intel are now using the wisdom of crowds to predict demand for their products. By capturing individual and collective assessments for up coming demand, they can now predict with 20% more accuracy the future demand. This allows for efficiencies in cash flows, inventory planning and production.

In the same role; wisdom of crowds is now being used to predict movements on the stock exchange, by analysis of Twitter comments. Gathering together the sentiment expressed in Twitter comments and adding them to the existing model used to predict the Dow Jones Industrial Average (DJIA) has improved the models accuracy from 46.7 % to 86.7%. These sentiments reflected in the DJIA 3 to 4 days later.

Now that seems like a lot of WONGA

You might have seen the Wonga.com adverts on Sky, spitting image type puppets of older ladies and gents in an office, extolling the virtues of borrowing short term money from Wonga. I personally wondered how these companies managed to survive in what is known as the biggest default area in money lending.

Wonga have disrupted this model by leveraging big data and using social platforms. It has reduced it’s default from over 50% to single digit default by developing an algorithm which takes 30 key points of information from the applicant. Based on that 30 point check Wonga have found that they can access 6,000 to 8,000 more online data points about the applicant from the online space, this is called data mining.

Designing a vehicle for the US Military

Local Motors where asked to produce a new military vehicle by the US Defense Department, in 1/5 the normal time frame of 5 years.  By offering a $10K prize fund Local Motors enlisted the help of it’s already active online community and produced the vehicle in 5 months. The fully built and functioning model was unveiled by US President Obama. He praised the efforts and rightly said that crowd-sourcing could save billions in development costs.

Conclusion

Businesses large and small can benefit from the disruptive influence of social technology. This report leaves you in no doubt about that. The savings to business across the four sectors MGI have covered in this report is put at between $900 Billion and $1.3 Trillion per year if the Social Business Model (SBM) is adopted. It is the ROI of online and as the Burberry CEO Angela Ahrendts said some time ago, if you don’t have an SBM you will not have a business in five years.

This post is only skimming the report, there are also examples of how social is saving lives, helping people stay safe in Hurricanes. I will cover that in more detail at a later date. Can CEO’s and the C-Suite in general continue to ignore the Social Platforms and the Social Business Model? On the evidence of this report I don’t believe so, come join the most disruptive technology in the worlds history, sure mistakes will be made, but isn’t that part of the fun?

Thanks to McKinsey Global Institute and to the 8 writers accredited to the document, Michael Chui,James Manyika, Jacques Bughin, Richard Dobbs, Charles Roxburgh, Hugo Sarrazin, Geoffrey Sands, and Magdalena Westergren for an incredibly insightful report.

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Image: “Portrait of young man driving car / Shutterstock.com



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The Author:

Co-Founder at the Ahain Group. The first blogger to name the MDEC Model. A social business enthusiast and looking to learn something new every day. Which is not difficult to find online. Keen golfer and Munster Rugby supporter. http://www.ahaingroup.com

Add Your Comment

  • http://www.bloggertone.com Niall Devitt

    Nice one John, we tend to only see social with a sales and marketing perspective, but as this report highlights – these tools can be used across the business. For me, there are huge opportunities for nearly all businesses around customer insights and product development. This is surely the most logical place to start?

  • John Twohig

    Thanks Niall, I feel the business world is beginning to grasp the opportunity that the Social Business Model presents on the innovation and efficiency side of enterprise. As the older management, in my age group 40+, relise that Social is a great B2B and B2C tool they will embrace it. It is the job of the Ahain Group and other digital organisations to keep shouting from the roof tops. This report from MGI is one of many that are coming to the same conclusion and these reports have to put in front of the right people.

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Very interesting read there John.
    I’m glad you mentioned the other benefits of social technologies, besides just in business. I read an article this morning on Finland utilising crowd sourcing, using a new Open Ministry platform to create new laws. Imagine that in Ireland!! Transparency and collaboration? We need more of that, and if social technologies help it spread, then it will permeate throughout.

    And 90% less emails definitely sounds attractive, esp for those getting hundreds of internal messages a day!
    Greta analysis of the report – thanks for sharing

  • John Twohig

    OMG can you imagine the wisdom of crowds being used to design fair and open government, in Ireland, not a hope. I was going to put a 7 letter word in front of hope starting with F and ending in G but thought that might be rude. Yes, Social has the potential to save lives, help literary and numerousy and help keeping people safe.

    We have the power to turn life on its head. Democracy could take on a whole new meaning, but we wouldn’t allow ourselves that luxury as we couldn’t be arsed to demand change. See our existing political woes. Hey Hoe, we can always dream, thanks as always for your considered comment, Elaine.

    PS hope that Train is moving fast.

  • Christina Giliberti

    Hi John,

    Doesn’t that get your brain whizzing and the creative wheels in motion!

    Social has countless benefits and all with people at the very centre (like the perfect customer service model).

    I derive from your report that the uses are productive, analytical, far-reaching, time-saving and innovative. All truly positive outcomes.

    Social has many strings and businesses can really gain a great deal from understanding that social business is about using platforms with a clear objective, utilising their strengths. As your examples show; opportunities await.

  • http://www.ahaingroup.com/ Sian Phillips

    Welcome to Tweak Your Biz Dylan. Scary to think 2014 is coming along so quickly but scarier still is the speed of new technology trends which we have to keep up with. I look forward to your next post

  • http://www.callboxinc.com/ Amber King

    This simply shows how technology will greatly impact how we do business. We should embrace what technology is offering us.

  • http://www.softship.com/ Ava Cristi

    Many companies do make their own apps nowadays, no matter what kind of industry they belong. This is because mobile apps are not limited to games and productivity tools anymore, but they provide a much simpler access to things they need for consultation such as direct tech support, account management and balance checks.

  • Sumita Das Dutta

    Thanks Niall for liking the post.In this web oriented age people fear to provide a hell lot of information and feels that it is intended to spy on them and flood their inbox with promotional messages. Organizations need to be smart to work around this.

  • http://www.ahaingroup.com/ Sian Phillips

    Welcome to Tweak Your Biz Sumita and an excellent first post. Not being in the website design side of things I’d never thought of it but what you’ve said makes complete sense. I look forward to your next post.

  • Autumn

    Sounds silly, but I rarely consider the impact of color. Interesting thought of avoiding the color red on call to actions. Great tip!

  • http://www.smallbusiness-steps.com/ Wazir Khan

    The timing of your post couldn’t have been better for me. Currently I am working on strategies to monetize my website and the points you made have given me a good starting point.

  • Sumita Das Dutta

    Hi Wazir, Its great that my post have been helpful to you. Good luck with your site.

  • Sumita Das Dutta

    Thanks for liking the post. Yes you can avoid the color red in future, on calls to action.

  • Sumita Das Dutta

    Thanks for the appreciation Sian and will try to give my best shot in the next article as well.

  • Jenny Brennan

    Thanks for including me Niall :-)

  • http://www.ahaingroup.com/ Niall Devitt

    You’re welcome Jenny!

  • http://www.ahaingroup.com/ Niall Devitt

    No problem Sian and well done.