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Social Intranets

Intranet ROI: As Important Yet Elusive As Ever

Whether your company is just considering setting up an intranet, or you already have one up and running, a discussion you cannot escape is one about Intranet ROI or return on investment.

Intranets, especially the current intranets with social features, invariably require significant investments. These include the cost of the software itself, but also human resources costs in setting it up and maintaining it.

Of course, management is always keen to know, “What’s the value of this intranet investment on our company?”

Even though they may inherently know the value of an effective intranet, they may still want to know definitely if the investment will pay off. But how do you show them?

Putting a Dollar Value on Intranet Benefits

The only way to prove the ROI of an intranet is to assign the dollar values of the intranet’s benefits. This is admittedly a difficult, tedious, and time-consuming process. However, if you’re tasked with convincing management to invest in an intranet, or to maintain it, then you have no choice but to do it.

Realize that measuring the dollar value of an intranet is not an exact science. What you have in the end will be approximations at best. However, this is the best way to measure an intranet’s value. According to Toby Ward, the most convincing numbers are hard savings. So strive to come up with at least that kind of data. Fortunately, this data are quite visible and probably easiest to measure. Think of savings made when documents are no longer printed and distributed in hard copy, for example.

If you want to embark on putting hard numbers on the benefits of an intranet, I suggest you begin by downloading Ward’s white paper.

On the other hand, if you think measuring the specific benefits of an intranet is just not feasible for you right now, take heart. A study by Prescient Digital Media found that only 6% of organizations surveyed measure the ROI of their intranets consistently. 51% either don’t measure at all or only guess at the ROI.

If this is you, you can still demonstrate the benefits of your intranet, although probably not in terms of dollars and cents.

Showing Organization-Specific Intranet Benefits

Here’s a different approach to determine your intranet’s benefits.

Step 1: Identify mission-critical blocks

Look around you, listen to water cooler discussion, engage in a whining session at the pantry. Do whatever it takes to find out what staff feel are keeping them from:

  • being more productive
  • making informed decisions
  • responding to customers effectively
  • getting the best solutions to their problems
  • being more engaged and happy at work

Be as specific as possible. Examples of these blocks are:

  • Whenever a policies and procedures document is updated, we have to make 500 hard copies and distribute them to our offices. It takes time to get the most updated documents out to all employees.
  • It’s almost impossible to find what document you need in the current shared file drive. Multiple copies of the same document are stored there, including old versions which are no longer applicable. As a result, staff have to email their team leaders to find others that are otherwise already available in documents.
  • Every time an employee leaves, years of knowledge and experience leave with them. New hires have to discover things on their own, or ask around hoping someone has the answer.
  • To process a form request, the paper form needs to be fill out and then physically routed to several people for their approval. Forms often get buried under other pieces of paper. Some of gotten lost. Staff who have submitted forms need to make calls to track where their form is to see how far along the approval process it is. It takes an average of 5 business days from form submission to final approval.

You get the idea.

Step 2: Show how the intranet overcomes these blockages

After you’ve made a list of these productivity, collaboration, and communication blocks, show how each can be overcome or minimized by the intranet.

For example:

With our intranet, we no longer need to use paper forms. All our old paper forms have been turned into electronic forms. Staff members fill these out on the intranet, and then route them virtually to each approving supervisor. Supervisors get an email notification that a form needs their approval. They make approvals or disapprovals on the intranet. If they need to add a comment, they do so easily on the intranet as well. Staff members can see at a glance who has approved/disapproved their forms, or who hasn’t reviewed them yet. Now it takes an average of 2 business days from form submission to final approval.

The more of these before-and-after scenarios you can describe for management, the more easily they will appreciate the value of the intranet.

Are you one of the few companies that regularly measure the benefits of your intranet? Or are you like the majority who don’t? How do you currently gauge the ROI of your intranet?