ROI for E2.0 – Money Talks

By Bert Sandie posted 09-07-2010 00:19


Recently there have been a number of blogs and articles written on the Return on Investment (ROI) for Enterprise 2.0 (E2.0) solutions as these systems have gained popularity and a foothold in companies. In this day and age, executives and key stakeholders will care about three attributes which are cost, time and quality.  However, with the ongoing financial uncertainties in the global economy many executive will narrow their focus to cost.

With “cost in mind” then developing an E2.0 proposal, running a piloting, and rolling out a solution needs to focus on the real investment and savings for your company. The cost and savings of E2.0 for each company will be different as each has it’s our own specific business challenges, opportunities, and culture. The good news is that there are enough Fortune 500 companies that have embraced and deployed an E2.0 solution in the past 18 months for the start of the emergence of real data available to understand best practices and the real value of their deployments.

One of the best practices from these top companies is to focus on one or two very specific business cases that have benefited from the use of an E2.0 solution. Many of these case studies are focusing on areas that include:

  • Fostering Innovation – driving new ideas in areas such as products, processes, techniques, workflows, etc.
  • Sharing Information – sharing of best practices, tools, processes, etc.; with the added benefits of reducing duplication and similar mistakes
  • Facilitating Learning – enabling employees to grow their capabilities to meet the needs of the business
  • Connecting with Experts – ability to find, communicate and collaborate with internal subject matter experts

To help illustrate the benefit, the business case is captured as a case study which is shared with executives to show the real benefits.  Provided below is a real example of how a blended solution of face-to-face activities and an E2.0 solution lead to real cost savings in a deployed solution.

At a workshop attended by 50 employees from ten major company locations one of the presentations focused on an internally created tool. The tool was being used in a single physical location by three product teams; and cost $50K to initially develop/deploy. The tool was saving each product team $25K a year, so the net savings at this point was worthwhile for it to be continued to be supported.

What happened next is what makes the power of collaboration and E2.0 solutions extremely valuable when properly harnessed…the tool was shared globally across the organization. Two years after the initial sharing of the tool, it is now used by over 25 product teams each year. The net savings for the company is now in excess of $500 K each year. As shown by this single case study “money talks” as executives and business stakeholders easily understood the value of this work and how it was initiated and supported through E2.0.

Let’s go back a step, so how was this tool shared and what was the collaboration involved?  The collaboration involved subject matter experts from across the original ten locations (who attended the workshop) who helped refine the requirements, design, code and deployment of the tool. This was accomplished through the use of a wiki, shared code repository, and an online community. Here is how each of these E2.0 tools provided value:

  • Wiki – provided a central repository for ideas, brainstorming, requirements and design which was accessible by employees across multiple physical locations
  • Shared Code Repository – provided a central location for the code to be viewed, edited and worked on collaboratively by experts across the company
  • Community/Forums – allowed the tool to be shared with any team within the company who wanted to use it; provided the ability to download the tool, view the user documentation, view articles on best practices on usage, etc.  Furthermore, the membership in the community helped connect employees via their internal social networking profiles.

Hopefully, this one business case captured as a case study demonstrates the real savings that can happen inside a company. In addition, if we think bigger picture for a moment, the cost savings of $500K for one scenario may be sufficient to cover the investment of an E2.0 solution across an organization. Our learning is that the best practice is to capture these stories (case studies) as they occur so that the value of the investment can be shown on an ongoing basis.

If you happen to be in the very early stages of evaluating and defining and E2.0 strategy then it is recommended that you find a business initiative that could benefit from a deployed solution and build out a case study showing the potential cost benefits.

Please feel free to share your experiences with E2.0 cost savings in the comments section.

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