ROI for Social Technologies? In a Word, Squishy

Ann All
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A few months ago, I wrote a post in which I cited a survey administered by Jive Software that found both executives and knowledge workers believe social software will become a necessary part of doing business - even though the return on investment for this kind of software is still pretty squishy. Improving customer loyalty and service levels and driving increased revenue or sales were among the top reasons for using social software mentioned by survey respondents.

 

I said I felt companies would need to move beyond those vague goals to create more specific potential use cases. However, I added, they shouldn't become so focused on attaining a hard ROI that they miss opportunities to use social to solve business problems.

 

I cited an article written by Chess Media Group principal Jacob Morgan, who had conducted five in-depth enterprise collaboration case studies with Booz Allen Hamilton. Morgan noted that while none of the participating organizations were able to offer a projected ROI, all agreed that enterprise collaboration technologies solved business problems, and that doing so was a good enough reason to make the investment. Among the results Morgan listed: communicating more effectively with employees, finding needed information more quickly and decreasing intranet costs.

 


Not making a financial business case for social software investments appears to be the rule rather than the exception, judging from the results of a new AIIM survey-based report titled "Social Business Systems: Success Factors for Enterprise 2.0 Applications." According to the survey, which was sponsored by a group of 20 companies that sell social software, just 12 percent of organizations must make a financial business case for social business investments, down from 20 percent in 2010's survey.

 

Nearly 50 percent said investment in social technologies was based on general business benefits. And 27 percent said social applications were considered part of the infrastructure, in much the same way as email or teleconferencing, up from 12 percent last year.

 

In my interview with AIIM President John Mancini about the survey, he told me social technologies were becoming "the digital dial tone for organizations." He said:

You wouldn't have to do an ROI analysis for your email system. These types of systems are going to be adopted in some way, shape or form by most organizations. They decide, "We need this capability. It should be a platform. It's going to be a core infrastructure." Then they figure out how much they want to spend. You don't go through the kind of elaborate analysis you do for other systems, including content management systems, which AIIM does a lot of.



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Nov 21, 2011 1:17 AM Janelle Janelle  says:

Thanks Ann for this post. I agree, in terms of continued social business software adoption the fact that many businesses aren't able to offer a projected ROI'is a problem. I think if you link the generic social platform with specific key business cases, structured around the way companies operate, creating products, improving products with consumer insight, identifying unmet market opportunities, process optimization that equal cost-savings, ROI starts to les squishy'as you say. This post, on how purpose-built social software designed around innovation creates measurable ROI is a great perspective: http://bit.ly/6YLzhw

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Nov 28, 2011 1:54 AM jmz jmz  says:

ROI is dependent on just one business case and like telephone and mail now social networking is a necessity but in moderation..It should be easy to determine saved time as one can measure internal mailtraffic compared to time spent on social network.

I would be surpriced if 15 minutes spent on social networks would save less than half an hour from e-mail traffic at one mailbox.

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