I’ve just returned from the Enterprise 2.0 conference. (I took the long way home through Waterloo).
It was fun, I got to meet some of the twitterati, and show off Open Texts’ very cool new products.
Much of the conversation there, however was about the ROI of the various initiatives around Enterprise 2.0 – and there was not a lot of satisfaction found in the conversation. So I’m sharing my thoughts on the subject.
First lets define some terms. Enterprise 2.0 generally refers to two major initiatives – one is to use social media to create and improve relationships and communication with the marketplace. The other is to faciliate knowledge worker efficiency within the organization.
I’m talking about the second case – what Open Text likes to call the Social Workplace (vs. the Social Marketplace).
So – ROI. How do you measure the ROI of knowledge worker efficiency. There are basically 2 ways to do this.
One is to try to measure the value in general. This is very hard to measure unless you equate social media to email, the phone, the intranet – they’re modern tools of work, and we don’t measure the ROI, its just how business is done. This really only works in one of 2 situations. Either you have a visionary senior leadership who just feel its strategic and important, and they want to do it regardless of a fuzzy ROI. The other is if you have a small grass-roots effort that can show demonstrable results, and those results can be assumed to grow with further adoption across the organization.
The real thinking behind this is that you acknowledge that you aren’t sure what will happen when you enable a collaborative culture within your organization, but your pretty sure some good stuff will happen in the realm of efficiency, innovation, and solving as yet unpredicted problems because people within the organization will have a much better chance of connecting the dots.
The second way to measure ROI is to recognize that Social Media and collaboration tools are enabling technologies that can solve certain business problems. You don’t measure the ROI of the technology, you measure the ROI of sovling a specific problem. So – if you don’t have the organizational culture or backing to take the leap of faith that method one requires, you need to identify a business problem – teams are spread across the globe, email trails are out of control, information silos are causing lots of redundant work – probably you can come up with your own list.
The ROI in this case is the ROI of solving that specific problem. What’s your business problem? What is the cost of that problem? How will you know if its solved?
That’s your ROI.