Tag Archives: ROI

Enterprise 2.0 ROI

Enterprise 2.0 ROI? Wrong question. I am hearing ROI debated here at Enterprise 2.0, and it’s not particularly useful. Shouldn’t all software be subjected to this rigor? Well, no actually.

At dinner last night with the Enterprise Irregulars, Andrew McAfee said he asked fellow Harvard professor Robert Kaplan, an innovative researcher on linking cost and performance, and recently elected to the Accounting Hall of Fame [yes, there is one!], can we measure ROI with these new social tools. Kaplan said it cannot be done.

Why?

  • The productivity and improvements are micro-tasks. It’s akin to doing operations research studies with a stop watch on the benefits to using email. Did anyone get fired because Microsoft Office was released? I highly doubt it. Wikis shift work from email and documents to wiki pages and a more facile method of collaboration. Measure it? Spend your time in more fruitful endeavors.
  • Management consultants who are actually trained to do these types of studies generally avoid micro operations improvements because they walk in the Land of Serious Business Cases. They have to; their fees are so high. They know that if you cannot measure productivity with a yard stick, then forget it.
  • If you’re spending $4,000 on a wiki, how much time should you spend on an intense ROI analysis? You are much better served experimenting with these tools, finding out how others are making them work, giving them to the pioneers in your organization, and learning.
  • When software companies give you ROI analyses, leave the room. As fast as you can. This is true for any type of software. The fixation on ROI during the economic downturn — which was because salesforces were shrinking and they desperately needed something to justify themselves — was largely patent BS. I have not seen an Enterprise 2.0 ROI study, but I will be as excited to see one as to stick needles in my eyes. Beware.

Of course we want to derive benefits and understand them. ROI studies are not the way.