I read an excellent article earlier in the week on the Chief Learning Officer site on the inability of the traditional definition of ROI to adequately assess the importance and value to the organization of its employee's networks and the value that is derived from these internal and external network interactions, and by extension the technologies and processes that support these interactions.
The essential point of the article was that these network benefits are intangible in nature, do not 'fit' the classic ROI model (that was developed to understand how tangible activities like buying a new factory, or upgrading an assembly line) of measurement. It really is a riff on the 'what is the ROI of e-mail' argument that is often used when folks are attempting to justify time and expenditure on new tools and processes designed to increase workforce collaboration.
Flickr - Darren Hester
Can the organization really accurately estimate the ROI of 'increased network activity'? Does it even make sense to try?
Unlike the new industrial machine, that is built to precise specifications for productivity, output, and operating costs, it is just about impossible to predict how new technologies and processes for collaboration will be embraced inside the organization. You may be able to apply typical benchmarks on participation rates and utilization statistics, but I have to believe its just about impossible to intelligently make an argument to senior management that a specific 'return' is likely to be generated, at least prior to the introduction of these tools.
In many ways organizations that embrace these projects, and the new ways of communicating, collaborating, and working that they introduce have to take somewhat of a leap of faith that there will be sufficient 'return' on the investment (which for all but the largest organizations is chiefly employee's time, the technologies that are most frequently utilized tend to be low cost, sometimes even free). It is very easy for management to constantly drive the focus back to the traditional 'ROI' measure, and it gives many leaders a convenient 'out' from having to address and show true skill and even courage.
But just like communication and collaboration advances like voice mail, fax, e-mail, and personal and network computing all moved from experiments to critical business infrastructure mostly without any idea of traditional ROI, so it will be for social networking and collaboration technologies. The smart and leading organizations have already embraced this concept, and I do not think it long before these technologies also become essential components of the modern organization.
Steve
