If you’ve been following the evolution of the enterprise collaboration space over the last 12 -- 18 months, you may have noticed two attitudes toward the ROI of collaboration technologies. The first views collaboration tools as an expense that needs to be justified in order for organizations to decide whether to adopt them or not. The second views collaboration tools as an expense that needs no justification, akin to email or shared drives -- the question for organizations is not whether, but what, when and how.
The way I see it, however, the proper approach to the ROI of collaboration technologies depends on at least three factors: industry, organizational footprint, and organizational culture.
But before we get to it, let me start by offering two core assumptions at the heart of my approach to enterprise collaboration:
- Collaboration as an activity is central to every business, no matter the industry.
- When I talk about collaboration technologies here, I don’t mean things like telephones, whiteboards, projectors, conference rooms and the like, but rather newer collaboration technologies that provide document collaboration, community management, blogging, microblogging, wikis, presence/location detection and so on.
Keeping these in mind, let’s dive in.
Industry has a profound effect on what the approach to the ROI of collaboration tools will be at an organization.
For example, at a pharmaceutical company, enabling collaboration across the entire drug development lifecycle and between the lifecycles of different drugs is critical to running a successful, profitable company. And given the complexity and stringent regulation of the development and approval process, (as well as the intensely specialist nature of the knowledge domain involved), the use of collaboration technologies is a given for pharmaceutical companies. The ROI of collaboration tools in this case can likely just be assumed, and so the real question for the organization will be what tools, implemented when, and in what way?
As a contrast, consider an organization that manufactures automobile parts. Collaboration is just as critical to their success as it is in the pharmaceutical industry, but the mechanics of that collaboration are very different. By and large, the collaboration at an automobile part factory occurs at the part level between a small number of line workers who are in close physical proximity with each other. These teams will be concerned with how a machine is running, the quality of the raw materials available to process, and so on -- all things that they can communicate directly by speaking to each other.
Now this isn’t to say that more complex forms of technology-enabled collaboration couldn’t add value in the context of manufacturing automobile parts; they very well might: for example, sharing information about the performance of machines and materials between shifts or giving floor managers a 360-degree view of the work being done across all teams. But an automobile parts manufacturer will likely need to justify their spend on collaboration technologies with a detailed business case rather than simply assuming their value to the organization.
Organizational footprint is another key consideration in an organization’s approach to justifying collaboration technologies. An organization with employees scattered across the country (or across the globe) will likely have an appreciation for the benefits of collaboration technologies without a detailed business case detailing the ROI -- as with the Pharmaceutical example above, they’ll primarily be concerned with asking what tools, implemented when, and in what way?
In contrast, an organization with a more centralized or smaller workforce (or both) will almost certainly want to see the return they can expect from adopting collaboration technologies.
At some organizations, having the latest and the greatest technologies available is taken for granted: new computers every three years, updated software, efficient printers, scanners and copiers. These kind of shops value the efficiency gains that come from having every employee’s PC boot up rapidly in the morning and allowing them to do their work with minimal delays due to slow processing, long print queues, etc.
Then there are the organizations most of us work at: tired laptops, slow printers, scanners, and copiers, outdated operating systems and software. These kind of shops seem unaware of the rampant inefficiencies created when hundreds (or thousands) of employees have to wait 15 minutes to boot up in the morning or restart their laptops every time they dock or undock, printing or scanning takes 10 times as long as it should, or creating documents is a chore fraught with delays and lost work.
Making a successful case for collaboration technologies at the latter organization will definitely require a detailed business case that shows significant ROI—and even then, the chances of getting a collaboration platform are slim when the core desktop infrastructure is so poor.
At the former kind of organization, as we saw with the Pharmaceutical example and the geographically dispersed organization, the concern will be less with ROI than with figuring out what tools, implemented when, and in what way?
Putting it all together
Given the ways we’ve seen these three factors impact the case that will need to be made for collaboration tools, it’s important to find out where your organization fits each category to help you determine what you’ll face as you try to get support and funding for collaboration tools.
The following matrix lays out how any given organization could be classified according to industry, organizational footprint, and organizational culture, indicating what the primary justification for collaboration technologies will be for each along with some general observations about each.
For a larger version of this matrix, go here.
All of this is not to say that the individual personalities of corporate executives don’t play a huge part in how you need to justify the ROI of collaboration tools. I’ve seen plenty of cases where an executive is hot on collaboration tools and will push for their adoption regardless of business case on the one hand, or where the organization so obviously needs collaboration tools, yet top execs still insist on building a detailed business case with big ROI to justify the spend.
And of course, even if you’re fortunate enough to be at an organization that takes the value of collaboration tools for granted, the time you take to build a solid business case with strong ROI will be well spent: doing so gives you the baseline metrics you’ll need to measure performance once you go live. And so a year or two down the road, when you’re asked, “What did we get for our money with those collaboration tools?”, you’ll have an answer.
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