Alrik's Blog

A blog about Enterprise 2.0 and it's facets.

It’s all about strategy June 11, 2010

Filed under: Social Software — alrikd @ 08:45
Tags: , , , ,

Many blogs and posts are related with the topic of the Return On Investment of Enterprise 2.0, Wikis and Enterprise Microblogging as well. 
Some of them conclude that it is not necessary to measure the impacts and costs of social software. Arguments are mainly:

  • Do you measure the ROI of EMail?
  • The users will adopt Social Software anyway, why should I measure the ROI?
  • The intangibles are too difficult to measure, you can’t get an exact result expressed neither in numbers or Dollars
  • The process of measuring ROI is also very expensive and not worth to perform due to the low investment
  • and so on.

I think this is a misrouted way. Many managers challenge their Social Software leaders with questions like “Which costs are related with the implementation?” and “Which advantages are rising up with those tools?” The question is not easy to answer, I agree. But to answer it like in the cartoon beneath isn’t the right way.
geek_and_poke_Enterprise_2_0_ROI

With the rising maturity of Social Software the ROI question will pop up more often in meetings and discussions. The main question question is not, which advantages or costs do occur. The first step should be an analyses of the shortcomings within the Enterprise and possible strategies to correct them. A tool without an underlying strategy is still a piece of quite useless code and hardware components.

Kaplan and Norton established a good way to analyze possible strategies and their value links within the enterprise. The so called Strategy Map is subdivided in four sections. For each subdivision, the company should be able to establish a strategy to decrease own weaknesses and increase own strengths. This is the start of my thoughts.

Strategy Map Kaplan/Norton

  • The financial perspective is seperated in the growth and the productivitiy strategy.
  • The customer perspective helps you to define major goals of your products or services and could be seen as your external excellence strategy (e.g. quality, price, brand, trustworthiness…)
  • In the internal process perspective you define your internal excellence (e.g. your innovation process or the operations management processes and customer management processes)
  • The last perspective is dedicated to the employees and named with Learning and Growth This part is crucial because it focusses on your most valueable resources, your employees. In knowledge intense iundustries there is an urgent need to motivate and align them with your strategy. The training and knowledge is important as well.

This map help you analyzing possible shortcomings and establishing strategies to eliminate them as well. 

The strategy is defined top-down, that is to say you define the financial goals which your company wanted to reach and connect necessary visions and mission in the subdivisions beneath. This value links will help you to find a fully integrated strategy with well defined goals. The value links are connectors of the separate perspectives. e.g. a well trained workforce is connected with excellent production processes, which increases the quality of the products and leads to a higher market share and improved cost structure.  

I think the statement is clear. No value without a strategy. A short Guide to a Return on Investment of Social Software:

  1. Think about your weaknesses within your Enterprise, identify them and write them down
  2. Define strategies which will tackle the weaknesses (e.g. weak communication, less innovations or decreasing process velocity)
  3. Establish measurable goals which you wanted to reach (e.g. increasing communication, transparency of decisions or 20% faster project duration), note: not all of them will be easy to measure but you can use interviews and surveys as well, but always keep it simple!
  4. After you know what you want to reach, the choice of the tool is not easy, but you can choose between classes of tools, like Wikis, Blogs, Microblogs and so on, use google and you will find all of them and plenty more for communities, communication, information sharing…
  5. the next steps are crucial, don’t drop the tools like candy to your employees with the words “Here’s a Wiki, use it or die”, communicate what goals you want to achieve with that Wiki and why. Communication is essential in the ROI creation process.
  6. monitor the activities within the software, is it accepted as you wanted and as quick as you thought, is it used how you wanted and if not, why?!
  7. Now it is time to see what benefits you have reached
  8. Measure your goals after 3-6-12 months, implementing Social Software is not mainly about cuttings costs or generating more revenue, it’s more about your employees, a vital innovation culture or cross-org collaboration.

Now it is up to you. Which strategies do you have implemented with Social Software and how do you measure it?