Making the Business Case for Social Computing

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The end of last week was pretty hectic, as you may have noticed, since I didn’t create any blog posts. Getting started with the new job is surely making things a bit busier than ever, specially with the transition and all, but already I am facing some interesting questions and discussions that I am hoping to be sharing over here as well as time goes by. The latest one of those has been on ROI (Or Return on Investment, for those not familiar with the term) for social computing or as the title of this blog post says: Making the Business Case for Social Computing.

I know that a lot has been written about this particular topic in the recent past. In fact, my feed reader has got tons of related blog posts to this specific subject and perhaps over the course of the next few weeks I shall be referencing them by sharing my two cents worth of comments on the subject. However, I thought I would start up today sharing something that has been in my mind for a long while now on how we can potentially make that business case for social networking.

Whenever someone asks me "What is the ROI for social software?" I am not sure about you, but I always think, and very much so, along these lines:

Oliver Widder’s Geek & Poke just nails it as far as I am concerned, and I am glad to see I am not the only one thinking along the same way. But last week I actually read one other blog post that I thought was just spot on.

It was coming from Jay Cross on a recent online seminar we both attended last week. And although Jay discusses further Making the Business Case for Informal Learning, if you try to substitute Informal Learning and, instead, use Social Computing, it would still be incredibly accurate on how strong I feel about trying to figure out the ROI of social software. But let’s see it with a couple of relevant and meaningful quotes so that you folks get to know what I mean:

"First of all, understand that you’re not buying informal learning. It’s already going on in your organization. In fact, three-quarters of the learning on and about how to do one’s job is informal.

[...] Second of all, a persuasive business case focuses on outcomes, not activities. The measure of success or failure is business metrics, not training metrics. The only meaningful way to assess any form of learning is performance. Are workers doing their jobs well? Is their work challenging? Are workers committed to becoming "all they can be?"

Or this other relevant quote:

"If whatever informal learning intervention you are proposing doesn’t have such an obvious payback that you can explain the value proposition on the back of a napkin, pick another project."

From there onwards Jay gets to put together a number of different examples that clearly detail how businesses should be looking at informal learning and, of course, social computing both inside and outside of the corporate firewall. You should have a closer look as well at the examples put together under "Eliminate Bureaucracy" and "Conversation", because they surely demonstrate the value of social computing, without even mentioning the term ROI just once.

Oh, and for those of you who have been saying that social software is all about conversations, then you should check this quote from that same article:

"Conversation is easily the most important learning technology ever invented. Conversations carry news, create meaning, foster cooperation, and spark innovation. Encouraging open, honest conversation through work space design, setting ground rules for conversing productively, and baking conversation into the corporate culture spread intellectual capital, improve cooperation, and strengthen personal relationships"

Yes, Jay is still talking on Informal Learning, but don’t tell me that if you exchange those words and apply that quote to social networking, it wouldn’t be just as accurate. I know. You bet it would!

And here is the heart of the meat, where Jay just puts together, with some lovely words, how I feel myself about trying to figure out the ROI for social software (And informal learning for that matter, too!):

"In brief, you measure the impact of informal learning the same way you measure the impact of any investment in the organization: by its outcomes. Are people able to do their jobs? Are they challenged? Are they working in top form?

Hold your breath a moment, for some of you will choke on this one: ROI and accounting are inappropriate measures of performance. ROI is a relic of the industrial era, when assets were tangible and repetition was the path to success in the factory. Today, the intangible assets you cannot see are far more valuable than those you can."

If social computing is supposed to revolutionalise the way we share our knowledge, connect with others, collaborate, communicate and innovate, then I think it is about time we move into the 21st century, progress further in that Knowledge economy and try to figure out how to get the most value out of it, because figuring out its ROI, in my opinion, is going to be a waste of time, energy and resources.

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Worth while sharing it along?

12 Comments »

  • [...] The moment you step beyond small scale implementations ROI is something you can’t avoid. The difficulty I have is the reasons most frequently given by the social computing mavens. They appear as attempts to sweep the topic aside. Take this from Luis Suarez: If social computing is supposed to revolutionalise the way we share our knowledge, connect with others, collaborate, communicate and innovate, then I think it is about time we move into the 21st century, progress further in that Knowledge economy and try to figure out how to get the most value out of it, because figuring out its ROI, in my opinion, is going to be a waste of time, energy and resources. [...]

  • Jay Cross says:

    ROI = Industrial Age, tangibles only

    Value exchanges = today, intangibles rule

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  • Atul Rai says:

    Hi Luis,

    I really liked the cartoon strip. What I believe is that end of the day, its about the Money! Lets not think its not. Which means that we need to bring up some kind of return on the bucks the management is going to spend.

    THe only thing thats different is that today, we are coming to the understanding that water cooler conferences (or maybe those discussions over a few Beers …), are a very important way to share knowledge, and resolve issues, and a simplistic way of looking at Social Computing could be as an online water cooler (minus the Beer?).

    Cheers, Atul.

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  • [...] The moment you step beyond small scale implementations ROI is something you can’t avoid. The difficulty I have is the reasons most frequently given by the social computing mavens. They appear as attempts to sweep the topic aside. Take this from Luis Suarez: If social computing is supposed to revolutionalise the way we share our knowledge, connect with others, collaborate, communicate and innovate, then I think it is about time we move into the 21st century, progress further in that Knowledge economy and try to figure out how to get the most value out of it, because figuring out its ROI, in my opinion, is going to be a waste of time, energy and resources. [...]

  • [...] Over the last couple of days, I have been reading with interest the good number of different comments and blog posts related to the last couple of articles on ROI for Social Computing I created over here. During the course of yesterday and today I have been putting together some further thoughts and decided that instead of replying to those different articles, I would first go ahead and create a follow up weblog post (Or two) where I would be able to expand further those different conversations that people have been leaving as comments. Pretty much like I have done over at ITtoolbox earlier on today. Then as time goes by, I will go ahead and chime in as well on those different discussions as they are just too good to miss out. [...]

  • Luis Suarez says:

    Thanks every so much for the feedback comments, folks. Very very helpful and insightful. So much so that I have decided to create a follow up weblog post and share some additional commentary on your initial reactions. Check it out and see what you think. Let’s keep the conversation going :-)

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  • [...] Social Computing – Making the Business Case for Social Computing Making the Business Case for Social Computing – Part Deux Commenting further on ROI and Social Computing – Part I [...]

  • [...] Luis Suarez’s ELSUA blog: “Making the Business Case for Social Computing” (Part I and Deux); continuing with “Commenting further on ROI and Social Computing” (Part I and Part II) [...]

  • [...] What about blogs? Many address measurement issues. Jay Cross, The Big Picture on ROIHal Richman, Optimizing Learning Value for Capital Effects by Jeff Kelley Jay Cross, Making the Business Case for Informal LearningTony Karrer, ROI and Metrics in eLearningGeorge Siemens, ConnectivismWesley Frier, Beyond Seat Time John Ingham, The new frontier of human capital measurementDennis Howlett, ROI is so Business 1.0 NotAltul Rai, Measurement of Business ProcessesElsua, Making the Business Case for ROIStephen Downes, Can’t Count Friends or Count on ThemGreg Verdino, Key Takeaway from ForresterDave Lee, e e learning [...]

  • [...] Jay Cross, The Big Picture on ROI Hal Richman, Optimizing Learning Value for Capital Effects by Jeff Kelley Jay Cross, Making the Business Case for Informal Learning Tony Karrer, ROI and Metrics in eLearning George Siemens, Connectivism Wesley Frier, Beyond Seat Time John Ingham, The new frontier of human capital measurement Dennis Howlett, ROI is so Business 1.0 Not Altul Rai, Measurement of Business Processes Elsua, Making the Business Case for ROI Stephen Downes, Can’t Count Friends or Count on Them Greg Verdino, Key Takeaway from Forrester Dave Lee, e e learning  [...]

  • [...] Howlett, ROI is so Business 1.0 NotAltul Rai, Measurement of Business ProcessesElsua, Making the Business Case for ROIStephen Downes, Can’t Count Friends or Count on ThemGreg Verdino, Key Takeaway from [...]

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