PBWiki have posted an ROI calculator tool for wikis.  It’s not my preferred Enterprise 2.0 ROI method, I like to start small and use case studies, but for those who work in an organisation which demand the sorts of ROI cases that look at man hours saved per month it could be very useful!

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Was at the Web 2.0 Strategies forum today and took part in a social software ROI discussion. The discussion wandered quite easily onto the ROI of blogging or the ROI of wikis, and the features and functions of the tools. This has never really helped develop the ROI case for Web 2.0 or Enterprise 2.0 and didn’t in this case. It got more interesting when we turned our attention to a problem that Web 2.0 could solve (maybe using blogs or wikis).

For example, if a software company has a problem where support calls cost too much, a wiki may be a good tool to lower the cost of fielding support calls. Jive Software recently quoted an organisation where phone support cost the organisation $12 per incident, whereas wiki support cost $0.25. A wiki therefore supports the ROI case for the reducing the cost of providing support – there’s no ROI for the wiki in it’s own right. It’s just that organisations that adopt Enterprise 2.0 can improve the ROI’s on many different projects.

The conclusion I took away was that ROI only makes sense when applied to a specific business problem – then you piggy-back on the ROI of that business problem, rather than trying to make a generic ROI case for widespread wiki, blog, or social software adoption.

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I attended a webinar last night hosted by PBwiki titled “Growing in a down market with PBwiki“. All in all it was very interesting. Here are the main points:

The webinar went very smoothly. This is not to be underestimated, I’ve lost count of the number of webinars where there are problems with sound/video but this was great. Slides/screenshare and question submission was handled by GoToMeeting - and I was very happy to find out I could stream the audio via Ustream rather than have to pay for a 60 minute international call to the States. Video was snappy, and audio was crystal clear, made the experience much more enjoyable.

The case study was RMC Vanguard, a mortgage company in the States which is experiencing the slowdown of the US mortgage market. The benefits they obtained from the wiki were as follows:

• Time saving – wiki pages with frequently asked questions, links to important websites (with usernames and passwords where appropriate) were all included on the wiki
• Productivity – with four underwriters serving fifty loan officers, and a habit of loan officers to keep asking a question until they got the answer they wanted, having a place where underwriters could post information rather than having it asked of them constantly made both the loan officers and the underwriters vastly more productive, which resulted in more time spent with clients which ended up with increased sales
• Retention – there is a strong attrition rate in the loan officer role. Many role officers worked from home and struggled to remember the details to access internal systems once they returned to their home office, and felt isolated. How-to’s on the wiki increased their productivity when they first joined, which meant they earned more, which meant they were happier, which meant they didn’t leave
• Improved customer experience – in a down market you need to retain customers. By providing loan officers with a single point of reference where they could obtain information in a fast changing market meant that they could answer clients’ and potential clients’ questions on the phone there and then. This led to a significantly improved customer experience and increased customer retention, which is essential in a down market.

What was really interesting is that this successful wiki implementation hit nearly all of our principles of wiki adoption:

• Targeted – there were clear reasons for the wiki – internet passwords, How-To’s for working from home and market information. There were also clear audiences who would use it slightly differently, underwriters (generally content contributors) and loan officers (generally content seekers). The motivations of each were addressed differently – for the underwriters posting wiki content stopped them being asked the same questions several times a day. For the Loan Officers using the wiki as a first point of call allowed them to provide an improved customer experience and therefore sell more.
• Sponsorship – the wiki manager worked for the President of the company. Interestingly, he commented that during a ‘down’ period was actually a good time to introduce new technology, as people actually had some time to get used to it!
• Marketing/communcations – a lot of company communications were pushed out on the wiki. A catchphrase developed in the office when people asked “where is…?” with the response “it’s on the wiki!”
• Champions – there was a clear champion for the wiki who spent a great deal of time educating and working with users to ensure that the adoption was successful
• Support – a lot of support was provided. Effort went into ensuring that templates were available so that people were not presented with a blank page when creating new content. Effort was put into ensuring the wiki was searchable so that people could find what they needed quickly. The wiki champion spent time one-on-one with staff to ensure they knew how to use it
• Accessible – the wiki could be accessed by those who worked from home, which was key to driving adoption with the loan officers
• Enforcement – people started to say “it’s on the wiki” when asked a question rather than providing the answer
• Get rid of the old – the wiki champion slowly started to take away the old sources of information. After one week of information being posted into the wiki and one on one training showing the users how to find it, it was removed from its original source
• Measure – this is the one principle not followed. Any measurement was word of mouth and anecdotal. Given adoption was so high, however, I can see why this was not a priority.

When asked what the number one benefit that provided growth in a down market, the strong response was that it was the improved customer experience. RMC Vanguard won best customer experience award for mortgage providers in the US – and the wiki is seen to be key to this, and allowing them to cope with the downturn in the US mortgage market.

Many thanks to both PBwiki and RMC Vanguard - it was a great webinar!

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After my post on Wiki ROI which looked at Luis Suarez’s experiment of not replying to email but instead responding through social software tools such as wikis and instant messaging, several questions arose from friends and colleagues. At the same time, I made contact with Luis, and this morning we went into some detail on what it is like to stop using email in a corporate environment, and use Web 2.0 collaboration tools instead.

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Just some final thoughts around wiki ROI 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.

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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:

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