Ten Years of Enterprise 2.0: The Power Law of Enterprise 2.0 Revisited

Ten Years of Enterprise 2.0: The Power Law of Enterprise 2.0 Revisited

Jacques Bughin (McKinsey Global Institute, Belgium & McKinsey & Company, Belgium)
DOI: 10.4018/978-1-4666-9787-4.ch168
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1. Introduction

Social web-based technologies, including wikis, blogs, microblogs or video-sharing tools, often dubbed Enterprise 2.0, had once been perceived as powerful technologies for enhancing companies’ competitiveness (e.g. Tapscott & Williams, 2006; McAfee, 2006, 2009). The underlying logic is that those technologies would unlock the barriers of information among company employees, and their customers and suppliers, for their mutual advantage (Alberghini et al., 2013).

A large set of case studies had been put forward to confirm this claim. This includes the FMCG company, Procter & Gamble, which launched its ‘Connect and Develop’ open crowdsourcing platform and helped the company successfully secure a large stream, up to a third, of its marketed new product innovations. Another case is the chemical company BASF, whose major internal social network platform is used by more than a third of its global 100,000 workforce for faster information flows among employees in order to boost the company’s productivity1. Early high profile cases included Lockeed Martin, Siemens, Motorola, or Cisco (Payne, 2008).

A quick look at “Google trends” would however show that search query intensity about the term “Enterprise 2.0” had peaked in July 2008 in the US, and in May 2010 in Germany, while resurfacing between November 2009 to November 2010 as the term, “Social Enterprise 2.0”2. Since then, the hype about Enterprise 2.0 in the media and in the business press seems to have faded away. This decrease of interest correlates with the recognition that only a few companies have been largely embracing those technologies. This asymmetry in adoption and in reaping benefits was called “the Power Law of Enterprise 2.0” by this author, in an early work (Bughin, 20103).

But recently, the buzz about Enterprise 2.0 has been re-emerging, along with the recent announcements by major Internet companies such as Facebook deploying their own technology suites, or with the rapid spread of Jive as a social care solution across many industries4. It seems that companies are now learning how to use these technologies to maximum effect, and that diffusion has finally come to scale: even pundits of Enterprise 2.0 have noticed, see Hinchcliffe (2015). 5

Given the above, this chapter is concerned with a refreshment of the work by Bughin (2010), using data on Enterprise 2.0 from a recurring series of worldwide Enterprise 2.0 surveys since 2006 to 2014, or roughly a decade of data. After describing the data source (Section 2), we update the core stylized facts on Enterprise 2.0 and in particular, reconsider key findings regarding the time series dynamics of adoption and diffusion (Section 3) as well as the evolution of the Power Law of Enterprise 2.0 (Section 4) We conclude with some evidence on the return to Enterprise 2.0 (Section 5). Sections 6 and 7 are concerned with avenues for research and conclusions.

Three major findings stand out. First, the dynamics of Enterprise 2.0 adoption and diffusion both follow a typical S-curve, with strong imitation effect for each social technology. While Enterprise 2.0 has continued to spread, the dynamics have peaked around 2010, interestingly in line with the “Google trends” statistics mentioned here-above. Second, given this adoption, the power law has become less and less important, but has not fully disappeared: a few companies still are clearly reaping the most benefits out of using those technologies. Third, the impact of Enterprise 2.0 on added value is actually relatively visible, in the range of up to 6% increase of added value for some key social technologies such as social networks. This productivity upside matches the boost of productivity introduced by computer adoption in the Nineties (see Brynjolfsson, 2003) and by big data use within companies (see Tambe 2014, or again Bughin, 2016).

Key Terms in this Chapter

Bass Model of Adoption: Model developed by Frank Bass which consists of a differential equation that describes an S-curce process of how new products, or technologies get adopted in a population.

(Enterprise) Wikis: A web based technology, part of enterprise 2.9, which allows collaborative AU57: The URL http://en.wikipedia.org/wiki/Collaborative_software has been redirected to https://en.wikipedia.org/wiki/Collaborative_software. Please verify the URL. modification, extension, or deletion of its content and structure, with little explicit structure.

Productivity: Measures the efficiency of a company production AU60: The URL http://en.wikipedia.org/wiki/Production_(economics) has been redirected to https://en.wikipedia.org/wiki/Production_(economics). Please verify the URL. system—productivity is typically a function of inputs, their combination, and a drift linked to technical and technology progress.

(Enterprise) Blogs: A web based technology, part of enterprise 2.0, which includes a set of multiple comments regarding a specific set of topics, typically ordered in chronological order.

Enterprise 2.0: A set of web-based technologies whose main feature is their online viral use, and adopted by companies as a way to interact with employees, suppliers and customers.

(Enterprise) Prediction Markets: Are online market platforms created for the purpose of making predictions AU58: The URL http://en.wikipedia.org/wiki/Prediction has been redirected to https://en.wikipedia.org/wiki/Prediction. Please verify the URL. in the context of all elements that are linked to enterprise value chain.

(Enterprise) Social Networks: A web based technology, part of enterprise 2.0 which focuses on the use of online social networks AU56: The URL http://en.wikipedia.org/wiki/Social_network has been redirected to https://en.wikipedia.org/wiki/Social_network. Please verify the URL. among people who share business interests and/or activities.

(Enterprise) Podcast: A web- based technology, part of enterprise 2.0 which is a consists of an series of audio that can be streamed and download in the context of the enterprise.

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