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ROI of Collaboration Comes from Hindsight not Foresight

Posted by on April 25, 2012

I just came back from a Yammer event in San Francisco where several of their customers (7-11, Deloitte, Westfield, and others) shared their experiences and insights from using the product.  The question of ROI and measurement came up as it always does.  The customer panel said something which I have been saying for quite some time and something that every company I have worked with and spoken to has said.  None of the companies are able to predict the ROI of collaboration but every company is happy with the results .  ROI for collaboration only makes sense in hindsight not in foresight.  Why is this the case?

It’s not a cop out response or an attempt to circumvent the fact that business value and ROI are both very important.  But the fact remains the same that you can’t predict and put a dollar amount on human behavior nor can you predict and put a dollar amount on what the value of a conversation or relationship is going to be.  If I asked you if you would want to have a conversation with Jack Welch and Gary Hamel you would most likely say yes, but there is no way you would be able to predict the value or ROI of what that would bring.  Technology simply acts as a facilitator between people and information to help the organization executive on its goals and business strategy.  The value and ROI does not come from the technology itself but in its use.

Typical forms of ROI and business value for organizations has included the following:

  • saved costs by no longer funding legacy intranet systems
  • improved productivity of employees
  • improve communication across boundaries within the organization
  • implementation of employee ideas which result in either revenue generating or cost cutting products/strategies
  • decreased turnover rate of employees
  • enterprise ground level data that provides insight into the organization for executives
  • ability to motivate and encourage employees
  • open communication between senior level leaders and all employees
  • decreased on-boarding time for new employees
  • improved product life cycles
  • and many others

The key thing to remember for all of this is purpose.  Sure, oftentimes organizations see that when they deploy these new collaborative tools and strategies that the benefits extend beyond what they originally thought but from the get-go there needs to be some sort of justification or reason for going down this road.  There needs to be some problem which needs to be solved or a potential opportunity which needs to be unearthed.  Only then can an organization tie back metrics to the organization’s ability to execute on a strategy or achieve its goals.  Keep in mind that in 2006 Frost & Sullivan conducted a report which saw that collaboration had a 36% impact on overall business performance for organizations.  The data is there and the case studies are there.

Make no mistake, the benefits, the ROI, and the business value of enterprise collaboration are all very real but impossible to predict and measure until the tools and strategies are deployed.

  • This makes absolute sense.  There is a definite need out there for these tools, but the costs are so hard to justify.  I personally can’t wait until we have something better to use than the default Sharepoint…

    • Thanks James.  There are actually a lot of tools out there aside from SP which organizations are using today.  I think the challenge is that SP is by far the largest and  safest player as we all know that MSFT isn’t going to go anywhere!