E L S U A ~ A KM Blog by Luis Suarez

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Commenting further on ROI and Social Computing – Part I

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.

I am not sure how long this article is going to be, but in the case where it may run out of proportion I will go ahead and split it up in two, so that it makes up for some easy reading. Thus without much further ado, let’s have a look into some of the really good and fascinating conversations that have been going on so far.

In the first "Making the business case for Social Computing", Jay Cross comes to put together some further thoughts along the same lines on how I feel myself around the subject of ROI:

"ROI = Industrial Age, tangibles only

Value exchanges = today, intangibles rule"

Contrary to what some other folks have been saying, I don’t think that either of us states that ROI is dead. On the contrary, it is very much alive and will probably remain like that for a while. What we are both saying, I think, is how justifying knowledge workers 2.0, and how they make use of social software, in the current knowledge economy with the traditional ROI 1.0 is not really representative enough of how they should be measured effectively, if at all. At least, in the current business environment as more and more businesses continue their adoption of social software, both inside and outside of the corporate firewall.

Stay tuned, because as I mentioned in previous weblog posts, very shortly I will be sharing my final thoughts on an approach on how ROI 2.0 could work …

One of the other comments mentioned on this first part of ROI for social computing was coming from Atul (Author from Thoughts on Knowledge Management, and the Future of Business …), who shared some interesting insights that I think would be worth while mentioning over here as well:

"[…] its about the Money! Let’s not think it’s not. Which means that we need to bring up some kind of return on the bucks the management is going to spend."

I am not really sure about that one any longer, to be honest. Yes, the money is important, we all know that, specially from a management perspective. But we are no longer in a situation where management is in control in how knowledge workers get to share their knowledge and connect with others. That top-down command and control culture is leaving its place, slowly but steadily, to those same knowledge workers who are actually much more heavily involved with the overall workflow, defining how they want to connect and collaborate with both peers, business partners and customers, and in most cases the last thing they are worried about to carry out their jobs effectively is the money. It just doesn’t happen.

They are more focused on reaching out, connecting with other knowledge workers, sharing their knowledge, collaborating and innovating than whatever has happened in the past and as such applying traditional ROI elements to this new equation, I doubt is going to have that same effect. Why? Well, because, amongst many other things, whether that disruption takes place behind the corporate firewall or not, these knowledge workers are very much used to how Web 2.0 operates. And money hasn’t been their main worry, don’t you think? That is why I feel that figuring out ROI for social software needs to take a new refreshing approach where the knowledge workers themselves are involved throughout the whole process, something that up until now hasn’t happened as much as you would have expected. That is that needs to change. No need to terminate with anything.

"The only thing that’s 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?)"

Atul’s quote above does certainly serve the purpose of what both Jay and myself have been mentioning that ROI for social computing may need to evolve quite a bit to cover not just those tangibles but also the intangibles, that is, the virtual water cooler that he is talking about. Because, after all, do you know any traditional ROI approach towards measuring social capital, i.e. your conversations and connections with other knowledge workers? Because that is the equation we need to resolve. And again, I don’t think that ROI 1.0 is up for the job … But more on that later.

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  1. I just put up a post that may be a component of ROI 2.0. The gist of it is that transaction cost, the incremental cost of getting the next relevant piece of information, is dropping rapidly as social computing tools (or informal learning) increase in use. If we can get more AND better information, using social computing as opposed to not using it, for the same cost, we can make better decisions.

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