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ROI for Social Technologies? In a Word, Squishy

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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.

The biggest benefit, mentioned by nearly 60 percent of respondents, was more knowledge sharing between staff. That's been consistently named as a valuable result by those using collaboration tools. about Enterprise 2.0 technologies.

In a post I wrote last summer, I , which I described as "a sort of intranet on steroids" with collaboration features including blogs, forums, profiles, wikis and social bookmarking. A Booz Allen Hamilton executive said Hello.bah.com helps employees easily determine whom they need to contact to get the information they need. It reduced what the exec called "do you know" emails, blanket messages sent out to try to determine which colleagues can help solve a problem. Folks are "one thousand times more likely to respond" if they get a specific email or call addressed to them rather than a blanket message, he said in a short video on the Enterprise Irregulars blog. Hello.bah.com is searchable, scalable and, perhaps most important, it organizes information contained in existing BAH systems from an employee perspective rather than an IT perspective.

His points are further reinforced by results of the AIIM survey. Among other benefits mentioned by at least 20 percent of AIIM respondents: faster responses to queries and questions, fewer multi-copy emails with attachments, better cohesion and team-building, and better innovation from ideas and comments.

The squishiness of these benefits doesn't appear to be slowing plans for social technology investments. The AIIM survey found a net 15 to 20 percent of respondents plan to spend more in the next 12 months across all areas. The three biggest areas targeted for investment are social business infrastructure, social add-ons for Microsoft SharePoint and consulting services and training.

As Mancini told me in our interview:

Some organizations, because of culture or hierarchy or whatever, these social technologies won't work for them. But I think that group gets smaller every year. You have to figure out ways for people to work more collaboratively and productively together. People tend to be your most expensive asset, and if you're not putting these tools in their hands, you're ultimately shortchanging the company.

For folks looking for some metrics to measure the effectiveness of social technologies, I offered some from Deloitte Canada's Duncan Stewart in a post from earlier this year. Among them: Measure the speed of knowledge flows by providing social tools to some, but not all, project teams. That way you can see if groups using the tools complete their projects faster than those relying on traditional communications tools like email.

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