Everyone talks about ROI. Almost all companies want and demand ROI, but when it comes down to measurement, most roll over. Talk is cheap, intranets are not.

 

A 2003 study of 240 intranet managers and consultants undertaken by Prescient Digital Media revealed that only 6% of organizations undertake ongoing, specific measurement of the ROI of their intranet. Occasional measurement is undertaken by only 26% of organizations and 51% either do no measurement, don’t know if they do, or only guess at the ROI. 18% are considering ROI measurements.

While few organizations are spending significant time accurately measuring ROI, it is important to 76% of the respondent companies.

One survey respondent summed up the average management attitude with respect to ROI of the intranet:

 

“Although ROI has not been established in our current intranet we do see the potential and the need to create a more efficient intranet to be able to reduce costs and engage employees in a more direct method,” said one ROI survey respondent.

 

I guarantee you nothing has changed since I undertook that study. However, where there’s a will, there’s a way.

 

Those that have measured ROI are finding significant value. Of those that measure or offer ‘rough estimates’ of their organization’s intranet, answers varied from $0 to $20M. The average annual ROI of respondent intranets fell just shy of $1 million ($979,775.58). The average company size had between 4,000 to 5,000 employee users. However, 40% of respondents had less than 1000 employees while 20% had more than 10,000 employees. So, despite the male ego’s predilection to the contrary, size doesn’t matter – and size doesn’t necessarily equal value.

 

But really *who cares*? Show me the money. If I read one more damn column by some so-called IT guru, pundit or columnist who talks about the importance of ROI and yet never offers any numbers then I’ll show you a pretender who likely has never measured ROI before.

 

I’ve identified more than 130 line item benefits that can be measured for dollar value ROI (see my white paper Finding ROI) so there really is no excuse – there’s plenty to be measured.

 

Measurable ROI from hard benefits including cost savings from:

 

·     less paper

·     less hardware

·     fewer headcount

·     increased sales

 

Soft benefits include:

 

·     increased employee productivity

·     better customer satisfaction

·     faster time to market

·     improved employee retention

 

IBM, Oracle and Cisco all measure the impact and benefits of their intranet. And all of them have measured the value to be greater than US$1 billion. In fact, IBM has realized benefits from e-learning via the intranet to alone be more than US$284 million.

 

 

(Figures compliments of Liam Cleaver, IBM,

 “From Intranet to the On Demand Workplace”)

 

As impressive as those numbers are you don’t have to be a large technology company to realize measured ROI benefits. One client of mine, a small investment firm of several hundred employees was able to identify numerous areas for cost savings/cost avoidance including:

 

  1. Software Distribution – software program downloads via intranet instead of relying on an IT professional to personally and individually install the software on – saving time and money.
  2. Newsletter – news and announcements disseminated online via the intranet home page rather than having to use printed materials – saving printing materials, distribution costs, and production time.
  3. Phone Directories – phone directory queries conducted online via the intranet home page rather than relying on printed phone directories – saving printing materials, distribution costs, and production time.
  4. HR Forms – all human resource related forms downloaded via the intranet – saving printing materials, distribution costs, and production time.
  5. HR Benefits Materials and Enrollment – benefits materials examined and online enrollment via intranet – saving printing materials, distribution costs, and production time.
  6. Expense Reporting – expense forms found, downloaded and submitted via intranet rather than traditional manual method – saving printing materials, distribution costs, and production time.
  7. Time Tracking – Rather than traditionally finding and manually completing time tracking forms, complete forms online via the intranet – saving printing materials, distribution costs, and production time.
  8. E-mail Usage – enforcing e-mail etiquette policies and in-turn eliminating the costly dissemination of unnecessary e-mail and attachments saving significant server space and costs.
  9. Content Management – savings derived from using CMS to publish versus the older, traditional means of hard-coding pages – saving production and technology time.
  10. Information Retrieval – using intranet as an information repository and retrieval system reducing the time otherwise expended by employees searching and retrieving business-critical information and data by more traditional means – saving employee time and improving employee productivity.
  11. IT Help Desk – savings derived from fewer calls to the Help Desk and more self-service help directly from intranet

 

All total this client measured savings from only 12 measurable benefits at a 2-year value of more than $1.5 million. Their investment in the intranet was less than $200,000. Therefore the 2-year ROI was more than 700%.

 

Many organizations will continue to show interest in ROI; most however won’t demand it. Just because it’s not demanded though doesn’t mean you shouldn’t find it. If you don’t find it, you’re not proving the value of the intranet or portal. If you’re not proving the value, you’re limiting its value and potential because you will fail to garner the necessary resources to build and increase its value.

 

Hey, if you can make the business case to build-up the intranet and portal then I guarantee it will do wonders for your career. Demand ROI. Demand it from staff and your consultants.

 

To measure and increase the value of your intranet, please dowload the free white paper, Finding ROI.