Wiki ROI - final thoughts

Just some final thoughts around the ROI case for Wikis and to pull together some conversations that have been happening off-blog.

Luis was kind enough to get in touch and shed some light on some of my assumptions. Yes, he is internally facing but evidently does have some contact with customers - but mainly uses IM, Facebook or Twitter to communicate rather than email! I personally find it interesting that Facebook starts to become a one-to-one business communication channel as opposed to something like LinkedIn!

Ross Mayfield from SocialText was kind enough to link and point out that he sees a 30% reduction in email volume (as opposed to my guestimate of 25%) amongst his customers when they adopt wikis instead of email.

Andrea over at Rewarding Dialogue commented that in order to fully understand the net value of Luis's exercise we need to understand how much time Luis is spending on alternative communication tools. I addressed this to a degree in my follow-on post on Wiki cost savings vs revenue growth and hope to talk further with Luis to get more details on this (watch this space!) but would like to add some thoughts here:

• Even if a large amount of time is spent on alternative forms of communication - Web 2.0 activity such as wiki edits and blog posts tend to be driven by the author's schedule. Email has a tendency to be driven by the sender's schedule (how many times have you seen someone answer a Blackberry email in a meeting, or worse, at dinner!) So moving the 'ownership' of the activity to the sender will have an increase in productivity anyway
• I mentioned that I found Luis's initial email volume (30-45 per day) somewhat low. Luis points out to me that this is because he has been an advocate of social computing over email for over 8 years! So he was already reaping the benefits of this working pattern compared to the rest of us who may get hundreds of emails per day, and this experiment has been taking it to an extreme.

Luis also pointed me to a post on the Wikinomics blog which uses this picture courtesy of Chris Rasmussen at US National Geospatial Intelligence Agency to sum up the efficiency argument in a devastatingly effective way.

However, there is another area of ROI which I think we will always struggle to quantify. How do you factor in those moments of serendipity, where three people via their posts to a wiki realise there is a new way of doing things, a new product, a new channel, a new business partner which could fundamentally change the future of an organisation? You can put KPIs in to measure these things (such as % of revenue from new products, % of projects initiated by ideas from outside the organisation, % of products sold direct vs referrals) but making the ROI case for initial investment is difficult because these tools do not guarantee success or new innovative ideas, rather they increase the chances of it happening.

The way I believe the ROI case should be made is on low, modest claims amongst a small focused group of people. Wikis are extremely cheap to deploy, especially on a trial basis. You need to identify this group carefully and get the behaviour/culture right (that's where people like me come in!) So wikis can be deployed on the 'reduce email' argument, but where they will really prove their worth is those moments where people come together and ideas form in a way that would not have been possible previously.

So the efficiency/cost saving ROI argument might be what gets wikis (and Web 2.0/Social Media) in the door on a pilot. What will make them scale within an Enterprise, however, will be the success stories about how they fostered innovation and revenue growth.

Social software - balance ease of use with compliance

Interesting conversation at Go Big Always which starts off looking at how the simplicity of Social Software "cuts through the crap" of silos, file servers etc. that build up within an organisation and goes on to discuss the problem of balancing simplicity with legal/HR requirements.

The answer, of course, is that this is not about the software but instead about behaviours. If the projects are led by business instead of IT (eg "I work this way and by doing so closed these deals which brought this much revenue into the organisation and wouldn't be able to without these tools") then the legal/HR team is much more likely to "find a way" than if it is led by IT out of general interest in making the organisation more productive.

Godless - a vampire novel by Oliver Mell

Off topic - but my brother has just finished Masters in creative writing and has published the first chapter of his first novel. It's a little macabre and maybe not to everyone's tast but if you like Vampire novels based in Stoke-on-Trent take a look!

Web 2.0 ROI - cost saving or revenue growth?

The intuitive view around the ROI of Web 2.0 tools such as blogs and wikis tends to be that using Web 2.0 on external sites grows revenue, your blog can gain you extra customers and brand loyalty. Using Web 2.0 internally saves cost by making your employees more efficient.

I have always had a slight suspiscion around the cost saving argument. If you look at the logic behind my recent post on Luis Suarez's effort to stop using email, although you can point to the amount of time saved and translate that into cash savings, it is not that simple. Even if an individual stops using email and moves to more productive methods of communication they will have to spend some of that time communicating with the new tools. So a potential 25% saving isn't really a 25% saving, let's say it's more like 10%. Now let's say you have 5 people in a team who achieve this 10% improvement. How are you going to save money by getting rid of half a person? These ROI cases were made in the original Knowledge Management and Web Portal sales (fewer clicks to get to the app you need = cost savings) and fundamentally failed.

Let's look at it a different way. Dell, one of SocialText's customers uses a Wiki in their call centre, and have managed to reduce the number of clicks from 20 to 4, decreasing the average call time by 10-20%. Does this mean they can therefore save 10-20% of call centre payroll? Potentially, but more likely the call centre can handle 10-20% more calls without increasing cost, allowing Dell to sell more servers without risking customer satisfaction and increase net margin. This is an innovative way to drive revenue growth, not a defensive measure to cut costs.

As another example, one of the largest technology companies in the world uses instant messaging prolifically internally, especially at quarter end where quick conversations are required between a large number of people in a geographically distributed workforce to check whether a deal is in the books. In fact, the acceptable downtime for instant messaging is less than email! This is not done so that they can reduce the number of people manning the process, it is done so they can increase the number of deals successfully booked and revenue isn't missed by an administrative failure.

If Web 2.0 business justifications were based on innovation and revenue growth they might just have a better chance of being accepted.

Wikis as alternatives to email - find the ROI

There's a really interesting article on CIO.com with Ross Mayfield, the co-founder of Socialtext. In it, he talks about how wikis can end 'Reply-All' email threads.

Luis Suarez of IBM has taken it a step further, and on 15th February gave up on work related email. The idea would be that he would refuse to respond or initiate email communication and would instead communicate via social networking tools such as those provided internally by IBM. If you read a little closer, he doesn't completely give up on email, and recognises that for certain private conversations where sensitive information is exchanged, email is still a must. I see nothing wrong with this exception - no-one ever said email was fundamentally bad, just that it wasn't always used for the right purpose. Also, I am guessing that Luis is internally facing, or that this applies to internal email only. I can't really see a brand sales rep at IBM stopping using email to communicate with customers (although am happy to be proved wrong!)

Another interesting point is that he claims to receive, on a busy day, 30-45 emails. I personally think this is somewhat on the low side, I was always suspicious of people who claimed to go away for 5 days and come back to 2,000 unread emails (average of 400 per day), but I have certainly gone through periods of my life where 100 (on a busy day) was not unusual.

However, the results are still interesting, even if we take the case study as a low-volume email user who communicates mainly internally. It appears as if people took the hint and stopped sending Luis email. The results were most dramatic at the beginning, where the volume dropped from 35/day (175 per week) to 45 in the first week. The drop off has continued, but at a slower pace as shown here:

So we have a drop from 175-45 (75%) at the start and then a further 45-35 (22%) in the subsequent weeks. This has a significant impact for those who are looking for an ROI for internal Web 2.0 projects:

Time saved = 140 * 5 mins per email = 700 mins / 5 day week = 11h:40m.
In a 40 hour working week lets say thats 25% to keep things easy (estimates that 25% of employees time is spent on email is not unfounded)
Take a 30-man company with a £1,000,000 payroll, that's a saving of £250,000 (ok, so I know it doesn't quite work like that, but the point is that signifcant savings are available and this technology is effective even for small organisations)

Not only that, but give each individual an extra 10 hours in their week and that's more time sellers can sell, more time consultants can charge and more time R&D can innovate. You'll gain much more than £250,000 on your top line than you'll squeeze off the bottom line! Luis claims to be productive from the moment he starts work, rather than the inevitable drop in productivity as we all catch-up with emails that have come in overnight or after a day away from the office.

I'll be posting more on Wiki ROI in the upcoming days...

Blogroll!

I have finally got round to adding a blogroll. Enjoy!

Secret of Apple and Google applicaitons

Love this cartoon from StuffThatHappens. What's crazy is the comments it generated!

Talking to Colin Mooney

I had the pleasure of spending an hour or so talking with Colin Mooney this week. Colin has the enviable job of "Wiki Champion" for a large bank. It was great to share experiences around the cultural adoption of Wikis and other Web 2.0 tools in the workplace. What was clear was that we both observed similar things:

• Wiki's work best when trialled in a small, focused, pilot with a clear goal as to what the wiki is trying to improve. In Colin's case, it was organising workshops
• It might be difficult to measure the ROI of a wiki, but it is possible, and once word of the success of the pilot gets round the problem will be controlling the spread of it due to over-demand, not trying to justify it in the first place!
• The younger generations "get it" quickr than others

What was also clear is that there is a growing "required reading" list of blogs that both of us follow independently - Stewart Mader, Luis Suarez and Richard Dennison. It's exciting to see that someone else is also doing this for real in the workplace and we're not alone!

Innovation as a differentiator

One of the trends I've been noticing over the last 6 months or so is the focus of IT solutions being seen as a way of squeezing cost out of a business has faded. Instead, there is much more of a focus on how to drive innovation to grow the top line and differentiate an organisation in the marketplace. Obviously, we see Web 2.0 tools and corporate Facebook-style social networking as a great way to drive innovation.

It's always good to see others reflecting this idea. I've just started reading The Only Sustainable Edge by John Hagel and John Seely Brown. They write "applications promised to standardize business processes ... and deliver substaintial operating savings along the way". However "savings no longer suffice: the savings are lost in competition and captured by customers."
From the academic to the conversational, I tend to follow Ed Brill's blog quite closely. He was asked recently what career advice he would give college (university) students. His answer was to contribute to innovation. Why? Because " in so many industries, innovation is now the competitive differentiator". Whereas organisations may have previously thought more about who the idea came from rather than what the idea is (Not Invented Here syndrome), social networking tools allow an idea to be developed via the wisdom of crowds by all sorts of people within an organisation, not just those at the top of the pecking order, or even those outside your company.

As Bill Joy (co-founder of Sun Microsystems) said "there are always more smart people outside your company than within it". Further, there are always more smart people within the company who are not on the board than those who are. Companies that encourage and nurture ideas wherever they come from, by using a social network irrespective of who belongs to it, will find a truly sustainable edge for the future.

Corporate facebook

I was with a customer last week discussing the options available in building a corporate intranet that would encourage the social elements of on-line collaboration (posting photos from the company Christmas party, recruiting the company 5-aside football team, even photos from employees' holidays). Sharepoint had been tried and had failed and the conclusion was to just use Facebook. Now, whilst creating a group on Facebook for employees only is interesting, and I would more than advocate doing so as a pilot or experiment, I'm not entirely convinced that Facebook should become "the Intranet". I found a great article on CMS Watch, by Tony Byrne, "Is Facebook in the Enterprise an Oxymoron?"

He makes a great point around using Facebook to market your company outside your organisation, that "people join Facebook because they don't want to hear from your company". The same could be true of using Facebook internally, even in the meeting with the customer just recently we already started talking about the potential need to have two Facebook identities, one personal and one work related. Using Facebook as the official intranet actually starts to get very confusing indeed.

Instead, organisations should identify exactly what the problem is in their organisation that needs solving, then identify the elements of social-networking sites that could provide a solution and look to implement those inside the firewall. There's no point trying to take advantage of Facebook's ability to connect people if everyone knows everyone within the company. There's also no point in deploying the ability to share information with your colleagues if the problem is that the workforce is geographically distrubuted and large enough that people don't actually know who they should be collaborating with.

My attitude is best summed up by Byrne's conclusion - company culture needs to start with "how can we help our employees be more effective?" If the best way to make them effective is to give them tools which can be abused, then so be it. The benefits of mobile phones and internal internet access far outweigh the risks that employees will misuse them. The same is true of Web 2.0/Enterprise 2.0/whatever you want to call it collaboration tools. Specifically, Byrne says, the attitude needs to be "how can we support them [our employees] in the way they really want to work (as opposed to the way we think they want to work)?" This captures the influx of Generation Y employees who would struggle to communicated without instant messaging or access to Facebook as well as our focus on the fact that tools need to provide value to employees if you want to have any hope of widespread adoption. You need to focus on exactly what the problem is, put the tools that solve these problems in the hands of the workforce, and watch. The useful ones will be used, and the low value ones will fall by the wayside.