Alrik's Blog

A blog about Enterprise 2.0 and it's facets.

Social Software ROI model June 11, 2010

Filed under: Social Software — alrikd @ 08:41
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Once upon a time… I had begun my diploma thesis with the title “Return on Investment of Social Software – Enterprise Microblogging within enterprises”.
It focuses on three topics

  1. First of all the classical methods of profitability analysis should be analyzed and investigated for the usage of Social Software
  2. Second new methods should be found, this was quiet hard
  3. last but not least, a case study should be developed for the proof of concept

But one after the other.
New questions appear within companies.

  • How do I secure the future viability / competitiveness my company?
  • How can I quickly and accurately respond to ever-shorter market cycles?
  • How do I improve my ability to innovate and secure / improve my position?
  • How can I improve the productivity of my staff through collaboration and communication?
  • What can current trends, such as “Enterprise 2.0” or “Social Software” do for my company and what it means when I’m idle in these areas?

The model is inspired by three main approaches of profitability analysis. The first approach is the so called Total Economic Impact or TEI model.
TEI model Forrester

  • Costs will be accessed via the Total Cost of ownership framework
  • benefits are mainly measured with qualitative and quantitative Interviews and surveys
  • Flexibility is the most nebulous dimension in the framework, it is used to describe future perspectives, which can be reached with this investment.
  • Risks are considered for all three dimensions mentioned before.

The next apporach is the Maslow’s Hierarchy of Enterprise 2.0 ROI from Carpenter.
Maslow’s Hierarchy of Enterprise 2.0 ROI
This pyramid lit Enterprise 2.0 and Social Software with less framework related thoughts and is mainly based on the measureability of benefits and their impact to the company.

The last thoughts are first mentioned by Rischler and Bächle (the source is only available in German). In their Enterprise 2.0 study they identified 3 main categories of benefit and risk categories, organisation, individual and technology.

The new conceptual approach is combining those three theories and should be understood as a guidance to identify and determine benefits, risks and costs within the enterprise with Social Software related projects.
ROI model fr Social Software
This model is not the final approach for ROI determination of Social Software, but still a already further. What do you think about this dimensions and the hierarchy of the benefits?!


Return on Investment of Enterprise Microblogging

Hello Community,

this blog is created with the intention to create a lively and peppery discussion about the Return on Investment of Enterprise Microblogging.
Quantifiable indicators are still rare for communication processes and CIO’s and other IT-professionals are still asking the same questions about new IT-investments.

“Is there any additional value for my IT environment” ; “What is the benefit for my users”; “Which complexity do I have to cover” and so on. But the main question for managers is always some kind of Revenue, Total Cost of Ownership or even the Return on Investment of the new technique. But presently there isn’t a really suasive concept.
Some people tried to decrypt the code of the revenue of an active community and widespread communication between users.

  1. One of the first attempts was written by Alan Warms, Joseph Cothrel and Tom Underberg. Return On Participation, the principle how communities create an value added for both the sponsor and the participant.
    Return on Participation
  2. A Swedish research group tried to access the topic from another path, the tried to define and measure the non-material assets of a company and possible interactions between them to grow the company value. Thus Return On Communication is an important input for our discussion and should be read attentively.
    Return On Communication
  3. Last but not least, a research group of some IBM facilities wrote a paper about Return On Contribution where they made the first steps to a metric for the benefits of Social Software.
    Return On Contribution

So what are the next steps to an efficient Social Software benefit measurement?!

  1. Discussion
  2. Contribution
  3. Sharing out
  4. Creating… of something new and well defined!!

Now it is up to you folks…

The outcome is also a small support for my pending diploma thesis at Communardo and their leading Enterprise Microblogging solution Communote. Hopefully i started a well formed, efficient and exciting discussion about Social Media… Once again.