ROI of tagging

Here’s another ROI case study of social software from IBM – in short social tagging saves the average user 12 seconds when searching for information.  As there are 286,000+ searches every week, this equates to 955 hours per week resulting in productivity savings of $4.6million per year.

This is similar to the ROI approach I examined earlier where you take the average time saving and extrapolate it across an organisation.  Does it really make sense to talk about 12 seconds worth of savings?  Do those 12 seconds really add up to enough time for an individual to do something else more useful for your company – or do they take an extra minute on their coffee break?

Social tagging’s benefit is not that it helps you find information more quickly, but that it helps you find things that otherwise you would be unable to find

From a company such as IBM’s perspective, the benefit is not that a sales rep can find a compelling reference 12 seconds faster, it’s that they can actually find that compelling reference at all!

The productivity gain is less about how quickly you find information but the quality of information you find, which leads to a more compelling sales proposal which means you win the deal that otherwise you would have lost.

Extrapolate that across the company and you may end up with much more than $4.6m

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3 Responses to ROI of tagging

  1. Dunno. Define “useful for your company” more precisely, please. Asserting that taking an extra minute on a coffee break is *categorically not* useful (as you do by implication here) is … wobbly.

    I understand your point, but why frame it as an either-or comparison? There is (some) value in that time savings — to dismiss it out of hand isn’t helpful either. A better question to answer might be: “How can we calculate the real, total ROI? Including things like time (cost) savings, and improvements in quality of work, etc.”

  2. Jon Mell says:

    Hi Mark – I agree that there is definitely some value in time savings (see the work I did around Luis Suarez’s project – http://jonmell.co.uk/wikis-as-alternatives-to-email-find-roi/). My problem is that this seems to get the vast majority of attention, especially in large enterprises. I’ve seen the big vendors for years now come up with sales pitches which state “we can save your employees an average of 39.2 hours per month” which don’t work because it’s not concrete enough and doesn’t emotionally connect.

    I think that when trying to sell E2.0 into enterprise we need to be offering something revolutionary, not just “you can do what you always did, but 12 seconds faster”. This misses out on the opportunity to find things out that you would never have had a chance to find, which I find more compelling and more valuable. You can also create a more emotive story around this which leads to more organisations adopting.

    Of course you also need to factor in traditional time saving arguments, my post and the language was borne out of yet another case study that completely ignored the other way of looking at it, which reduces the impact of a potentially great case study.

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