Making the Business Case for Social Computing – Part Deux
Tags: ROI, Return on Investment, Jay Cross, Informal Learning, Social Media, Social Software, Social Networking, Social Computing, Web 2.0, Enterprise 2.0, Collaboration 2.0, Collaboration, Communities, Learning, Knowledge Management, KM, Knowledge Sharing, Learning and Knowledge, Personal Knowledge Management, PKM, KM, KM 1.0, KM 2.0, Remote Collaboration, Virtual Collaboration, Innovation, Knowledge Economy, Dennis Howlett, Irregular Enterprise, ROI 2.0, Business 1.0, Business 2.0, Tangibles, Intangibles
In yesterday’s blog post I mentioned how I was going to write a series of different articles around the subject of ROI and Social Computing, since there seems to be quite a buzz around it in various different places. As a follow up from that article I wrote previously, Dennis Howlett, over at Irregular Enterprise, has put together a very good, and thoughtful, post under ROI is so Business 1.0: not that I thought I would go ahead and spend a few minutes discussing some of the points Dennis makes.
In that particular article Dennis comes to point out how ROI justifies itself not just for Business 1.0, but also for Business 2.0, a.k.a. Enterprise 2.0, and comes to indicate how my conclusions may have been a bit too harsh on the topic. And he may be correct, although I still stand with that conclusion that ROI for Social Computing is a "waste of our time, energy and resources". And here is why:
"The assumption is that ROI is always about payback. While that is often true, you need a value figure with which to develop the calculation. Forrester has already tripped up over this one, concluding, as do many others, that the benefits (are these the same as value?) are ’soft’ and therefore difficult to measure. The fact something is difficult is not an excuse yet this is how ROI is positioned."
I am not sure what you would think, but Dennis has just mentioned in that particular quote one of the reasons why traditional Knowledge Management has failed to deliver throughout the course of the years. ROI has always been associated with multiple business models and disciplines that have always got to do with tangibles, i.e. what supposingly is easy to measure. But, at the same time, it has tried to prove the value of KM and during all of that time it hasn’t been able to deliver, more than anything else, because of those soft benefits, i.e. the intangibles.
Now, social computing has been associated quite a few times already with Knowledge Management (Or Knowledge Sharing, whatever term you would prefer) and as such trying to find out the ROI for social computing is like trying to repeat history and see if this time around it would prove KM’s value with a different term. So when I mentioned that trying to figure this out was going to be a waste of time, energy and efforts, I meant that we are just going to back to square one, back to trying to justify KM, something that if it has failed throughout the years, there is no reason it is going to work out this time around, because, if anything, we are still dealing with knowledge and knowledge sharing and trying to apply that to the traditional methods we have used for ROI is not going to take us anywhere.
"ROI = Industrial Age, tangibles only
Value exchanges = today, intangibles rule"
So what is the solution to the equation, you may be wondering? Well, certainly not the way Dennis finishes off his blog post, because no-one over here is trying to erect walls and not pull them down, nor consider CFOs as retarded for that matter:
"Instead of panning CFOs as looking at the ‘wrong’ stuff and generally pillorying them as retarded, social computing pundits might ask how the flat world of which many profess becomes a reality. The current tone is one of erecting walls and not pulling them down. It won’t win friends and it won’t persuade those who need to review ROI that alternative if more difficult measures have equal if not better utility."
If ROI wants to make a stand in the world of Enterprise 2.0, it needs to evolve. It needs to progress further into becoming ROI 2.0 (Yes, I know, you saw that coming, didn’t you?) and stop thinking that the only thing to measure the intangibles is following the same approach as with tangibles, because that is going to fail. It has for the last few years with traditional KM and I am sure it would fail again, again and again. We now have a precious opportunity to make things different; this time around with how social software is taking by storm the corporate world, getting everyone excited, once again, around the subject of knowledge sharing and collaboration (Not sure about you, but it was about time!). So let’s try not to repeat KM history again by making the same good old mistakes we have all along.
(So, ready to put together ROI 2.0? Well, I surely hope so, because that is what I will be covering in future blog posts. Will you be ready for it?)