The most-cited effect of Web 2.0 -- a collection of Web-based services that emphasize online collaboration and sharing among users -- is to transform the way that companies interact with their customers. The study, which consisted of in-depth interviews with corporate leaders as well as a global survey of senior executives, found that large companies are already using Web 2.0 tools and methods in a variety of ways. So far, companies have focused their Web 2.0 efforts mainly on the creation of online communities that can help with product marketing or product development. In second place is the establishment of blogs or wikis to initiate conversations and share knowledge inside or outside the company.
In the future, companies expect Web 2.0 methods and tools to be the single biggest factor changing the ways their company interacts with customers (according to 68 percent of executives), or on how employees interact with each other and the company (49 percent of survey respondents).
These results form part of Serious business: Web 2.0 goes corporate, a newly released Economist Intelligence Unit report sponsored by FAST. The report examines how Web 2.0 is being applied -- and will be applied in the near future -- by large corporations throughout the world. The report is based on a survey of 406 senior executives -- half from the C-suite -- at large companies throughout the world, as well as interviews with Citigroup, JWT, Global Crossing and other major corporations.
"We were surprised by the level of excitement among big firms concerning the commercial possibilities presented by Web 2.0," said Dan Armstrong, editor of the report. "Our survey respondents and interviewees saw Web 2.0 as an opportunity, not a threat, and were extremely creative in applying the idea of the collaborative network to their own products and processes."
"The Economist study confirms what we've heard from customers and partners -- that collaborative Web 2.0 technologies are becoming more important to organizations," said John M. Lervik, CEO of FAST. "We expect to see a rapid acceleration in the Web 2.0 adoption curve, as business leaders recognize the value of community-sourced information made accessible and actionable via search technology. Perhaps more interestingly, we expect to see Web 2.0 principles take off at the enterprise level, fundamentally changing how organisations innovate and execute."
Other key findings of the report include:
Customers are helping to develop and support products. Nearly 60 percent of the surveyed companies say that they are inviting customers to contribute content that explains, supports, promotes or enhances their products, or that they plan to do so within the coming two years. About half of companies say they are, or are planning to, treat customers as co-developers of products that are in a constant state of improvement.
Ease of acquiring and supporting customers provide the biggest financial benefits. Most companies cited marketing and sales as an area where Web 2.0 could help to increase revenues, primarily through customer acquisition and service. Web 2.0 technologies were seen as a way to reduce costs in the areas of customer support, advertising and public relations, and product/service innovation.
Early adopters are to be found in many countries and industries. Companies based in the US, Germany, China, India and the UK are among the early adopters of Web 2.0 tools and methods, according to the survey. The top early-adopter industries are entertainment and media, technology, travel and tourism and professional services.
The C-suite is more enthusiastic than lower-level executives. A full 85 percent of C-suite executives see the sharing and collaboration aspects of Web 2.0 as an opportunity to increase revenue and/or margins, versus 75 percent of middle management. The C-suite is also more inclined to view Web 2.0 as transformative, affecting all parts of the business (35 percent versus 28 percent) and having a significant impact on the company's business model (41 percent versus 22 percent).
CFOs are the most skeptical about the potential of Web 2.0. Compared to CEOs and the rest of the C-suite, CFOs lag in understanding and support of Web 2.0 initiatives. CFOs are less likely to view Web 2.0 as transformative, less likely to think that it will affect all parts of the business, and less likely say that it will change the company's business model. They are also less optimistic than their C-suite peers about Web 2.0's potential to increase revenue and margins.
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