Making the Business Case for Social Computing – Part Deux

13 thoughts on “Making the Business Case for Social Computing – Part Deux”

  1. If we drastically (over)simplify things we might have a place to start the conversation about ROI. Here is my shot at it…

    We start off by looking at “progress”

    work(now) + delta = work(later)

    In certain instances of progress the delta is negative; a spam solution:
    email – spam = less time managing mail

    In other cases of progress the delta is positive; a new truck:
    hauling stuff + new truck = hauling more stuff

    (but -/+ are really just semantics…)

    So the question on return is: does the ‘delta’ cost more than the ‘work(later)’ pays.

    With trucks and spam its easy to envision / describe the parallel universe where the delta never existed. Thats not quite as easy with social software.

    Not impossible, but not quite as easy. I had an experience recently with a person who I only know via our internal social tools. We ended up collaborating on the content for a presentation to a VERY large customer.

    In the parallel universe where her and I did not have that conversation, would we have made the sale? Did we sell more because of it?

    We talk about innovation – what does the state of new product development look like in a parallel universe where social tools don’t exist?

    (I said I had a start to the conversation, not the answer 🙂 )

  2. Hi Luis,

    I agree with you that ROI is probably not the best way to measure, at least not the way we look at it today. This is because there are structural differences between knowledge and material things (http://atulrai1.blogspot.com/2007/09/structural-difference.html).

    Having said that, we need some mechanism for measuring, because end of the day, the CFO needs to decide, and this decision would be based on how much Money this would make, or how much cost it would save.

    The approach you have outlined sounds interesting … with the Delta coming in. Question is … its very difficult to figure out whether you sold more because of this (we dont know whether you would have made the sale without this!).

    Thanks, Atul.

  3. Bonjour Luis,

    Two major reason why KM failed was that Knowledge managers were managing documents and not people and because software editors were selling very expensive licences with no change management.

    As for the ROI specifically, I already had the opportunity to detail my approach some time ago here: http://www.headshift.com/archives/003290.cfm
    The main issue at this point is that social computing has a contextual impact:
    – you can do many thing with one product and one thing with many products. For instance, one company can enrich project coordination, CEO blogging, team coordination, internal communication, customer engagement with a blogging platform. Alternatively a mix of blogs, wikis and social bookmark correctly interfaced can produce a very nice knowledge sharing app.
    – depending how extensively you use it, and we know that its emergent (check steward mader’s presentation on “how to grow a wiki”), the “ROI” evolves over time.
    Consequence is that we simply have to be back to the fundamentals of management metrics: in situation. I see no need of inventing new ways.

  4. Thanks for this Luis. I could offer a range of other reasons why KM failed and they are tied to the command and control nature of those systems. But to the point about ROI – another thought: the *language* people apply matters. There is a genuine issue here that needs exploring because regardless of rights/wrongs, CFOs sign checks and will require some sort of validation. That world is one that is steeped in financial measures so for the time being, rather than fight it, I’d argue for augmenting it.

  5. Thanks a lot, folks, for dropping by and for each and every comment you have been sharing above. Lots of great insights in there. Too many to let them pass just like that as comments, so I have taken the liberty of creating a follow up blog post with them and have shared some further thoughts on them over here.

    Thanks again for the additional thoughts and keep the conversation going!

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