Rakesh V
Director, Prosares Solutions (http://www.prosares.com) - Sharepoint | Business Intelligence | ASP.Net
Enterprise 2.0 - Strategic Investment or Tangible ROI ?
A frequently asked question by clients looking to invest in Enterprise 2.0 (Web 2.0 within an enterprise) technologies (e.g. Sharepoint). The only study I could locate on the internet was a survey-based study carried out by Frost & Sullivan (http://newscenter.verizon.com/kit/collaboration/MAW_WP.pdf). While it emphasises the importance of collaboration, it does not help quantify the benefits.
The argument that "Searching for ROI on Enterprise 2.0 reflects a "Enterprise 1.0" mindset" sounds too rhetorical and does not fly with CFOs.
What is your view - would you care to quantify the benefits or simply make a "strategic investment" and, in the former case, how would you quantify the benefits?
Good Answers (5)
People, ideas and innovation are driving value far more in the Knowledge Economy than efficiency.
Enterprise 2.0 significantly reduces the costs of communications and enables executives to monetize collaboration by sharply reducing transaction costs between employees
We are all familiar with the customer service transaction cost model:
Solving a problem over the phone, costs about $10 per call.
Solving it with the Web slashes the cost to $1.00
Step back and think about this model applied to your highly paid key contributors on your management team. They get paid a lot more than $10.00 per problem solved.
Their day to day work, tracking down files, dealing with versioning, contributing ideas, getting feedback and buy-in, involves countless expensive transactions. Firms that adopt Entperprise 2.0 collaboration early will reduce costs, enhance performance and capture competitive advantage.
Take the case of Cisco's acquisitions of Scientific Atlanta and WebEx. John Chambers compares them all the time, using these numbers:
• Cisco has been a well-oiled M&A shop with a reputation for doing deals very efficiently. It closed Scientific Atlanta in 45 days in 2005, using "traditional methods" (desktop applications).
• In early 2007, the team used the Cisco Wiki to do WebEx, and they did the deal in 8 days. Chambers attributes the performance jump to Web 2.0 collaboration tools, the Cisco Wiki.
On a project like a merger, tens of thousands, or hundreds of thousands, of transactions are involved. In conventional email and desktop app model thousands of documents are emailed around hours are lost when people update the wrong version; delays result when numbers from someone are delayed because she's on a plane. When these old tools are supplemented with secure wikis, blogs, search, tagging and RSS technologies to manage the same transaction, tremendous efficiencies are realized.
Links:
Agree that the argument that searching for ROI is missing the point is a cop out. Definitely interested in this - and we are going to be surveying on many facets of Enterprise 2.0 for our forthcoming Market IQ on Enterprise 2.0 - so at this time, no good answers for you.
Will definitely be watching other respondents here - and I am happy to network and speak (online or off) with anyone who has pursued Enterprise 2.0, or plans to.
Measures like faster time to market, faster bug fixing, more rapid sales proposal turnaround, more productive partnerships (speed, volume, integration), and similar would be good things to measure, rather than a roll-up to a single ROI.
Robert J
Program Manager | Sr. IT Specialist | IT Architect
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Well first of all, I would need to look at my solutions that I'm offering. And I'd need to understand the precise definition of "Enterprise 2.0" from the customers viewpoint.
Many have no idea what E2.0 is, or what it can do for them. You need to know how it can be applied to their processes in the first place and then you can make that jump into ROI and Strategic Investment arguments. If you don't understand how you can solve their needs - you've already lost the game.
So - assuming we have some of that data to work with I'd assemble a few business case arguments showing how to enable or improve their processes and the potential returns for them both strategic an economic. Are you resolving a problem they have? Will your resolution have benefits directly or indirectly that can be recouped or enable other direct returns for them?
But before I can do that I need to know what they do - and a little about how they do it. Often you can do a bit of digging on the internet and find out enough about the company and the current solutions their using to answer these questions - and when in doubt - call them up and ask them to tell you, "Hey what are your headaches?". Don't make it a sales pitch - make it a genuine discussion on what are the issues they're trying to resolve, do they know what Enterprise 2.0 is? Often you'll find their definition may be considerably different than your own.
Without that information - you're shooting in the dark hoping to pitch something they need or want. Know your customer, and you will always be able to answer this question.
Christian S
International CRM & e-Marketing Expert - Techno-Marketing Specialist
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Dear Rakesh,
You may want to review the many answers received so far to one of my recent LinkedIn question: "Enterprise 2.0 … Show me the ROI".
Please also feel free to read a recent blog post I wrote on this very topic and visit my blog at www.saastream.com for further insight on this and related topics.
Christian Smagg
Csmagg@gmail.com
www.saastream.com
Links:
Doug C
Chief Compliance Officer at Beacon Capital Partners
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Strategic investment.
There are so few studies with an ROI on enterprise 2.0 because it is nearly impossible to measure and calculate an ROI. Any method of calculating ROI is going to vary wildly depending on the industry and the information architecture of the company.
Enterprise 2.0 should be thought of as part of the information and communication strategy of the organization. Does the CFO ask for an ROI on email or phone systems?
