It’s virtually impossible to know upfront the return on investment of a social intranet. So the best way forward is to do things, to make change happen. Every company will be different based on their culture, goals and the workflows they target.
Business terms are the worst. They're complicated to understand, and they often try to do way too much. Return on investment or ROI is a main culprit of this. It's a great metric if it fits your business challenge. However, a lot of us are trying to fit the round peg that it is into a square hole.
In very direct business scenarios, where payback can be directly linked to investment costs, ROI is an amazing and very concrete way to see predictable improvements. We live in an incremental world. Many businesses are trying to find that 0.1% of extra income or efficiency.
Trying to find a quantitative ROI number for the success of an intranet can be madness. It’s a useful starting point and a valid measure at the start of a project, when you’re looking at the cost to acquire these capabilities or the savings to replace your legacy SharePoint platform, but it does little to identify the long-term benefits of the solution.
Introducing a new player.
This is where concepts like soft ROI come in. It's really simple, forgo the payback period, and focus on objectives. You know you want to increase dialog, facilitate knowledge sharing and reuse, locate experts more easily and so on. Who cares about the net present value (NPV), it made your company better. Your employees and coworkers got more done because it was simpler to accomplish. They’re more engaged because they understand what’s going on (and they got home a little bit earlier and played with their kid). If anyone is arguing about that, asking for a number, they aren't getting the point.
Businesses have entered a new era, and some terms and concepts have got to go. We can't keep thinking the same way people did in the 80's. It's not about being iconoclasts and throwing everything we learned out the window. It's about realizing where financial metrics are best applied. ROI still has its use, it's not going anywhere. The thing is, it doesn't work with intangible assets. It doesn't take into account the human factor. And that's okay. It wasn't supposed to when that metric was invented. It's about understanding that a worthwhile return on investment doesn't always come with a cash flow analysis.
Make your metrics.
The new and most elusive objective is productivity. It's a strange concept for a knowledge worker, but also perfect for this example, since it is difficult to put into numbers. However, it is at the center of most software implementations in the enterprise. Intranets and other collaboration tools ultimately all aspire to shorten and simplify the tasks of workers, freeing up time that can be redirected in a very useful way.
Having a powerful intranet makes work easier, but the end game of such a measure is on the quality of life of the employees. That's about as difficult to measure as productivity, but there are some signs to take notice of. Employee interviews and surveys can tell you pretty accurately how people are feeling about their work and the company they do it for. They can help identify the stories and anecdotes where workflows have been transformed.
Another simple way, if less precise, is to look how much participation there is in company activities. Are employees going above and beyond? Did they attend that optional activity? Those are all indicators of a healthy company, and it leads to productive employees. A simple monitoring of the company intranet also shows results. How is information being shared, what percentage of employees are participating and what type of interactions are occurring around them.
Again these aren't hard numbers, but they are indicators of success. These metrics are the future of companies as social technology takes hold in our business practices. It doesn't mean ROI is dead, it simply means it should focus on what it does best. And that collaboration should be given a fair chance.
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