Having a Hard Time Calculating the ROI for a New Intranet? You Are Not Alone.
APRIL 20, 2012:
Christian Twiste, Vice President, Interactive Services
Results Website Design And Development
It’s no secret, intranets and corporate portals are expensive endeavors and justifying the business expense to the executive team can be difficult. Let’s talk about a few ways to look at ROI for an investment that has value, but is typically hard to quantify to senior leadership.
Sorry, there is no ‘silver bullet’….
The principal challenge for measuring intranet ROI is that it is often easier to assess the ROI of specific tools/resources deployed on your intranet rather than measuring the ROI of the portal itself. In fact, most demonstrable ROI case studies highlight the ROI of tools/resources – such as automation of a previous paper-based task – rather than the ROI of the entire intranet.
Generally speaking, intranet ROI can be lumped into two main categories: cost savings/cost avoidance (CS/CA) and revenue growth.
1. Cost savings/cost avoidance (CS/CA)
Cost savings/cost avoidance is the easiest way to measure and quantify ROI for your intranet initiative. For example, there are tangible savings that result from the cost avoidance of printing or distributing documents. These costs can be tracked and quantified relatively easily for analysis. Additionally, there are intangible savings such as enhanced communication, collaboration, and decision-making, among other things that are much harder to quantify.
2. Revenue growth
This is the tough one. This is where I would suggest measuring specific benefits from automating a process or task that can be directly linked to revenue growth. For example, if you are financial institution, streamlining the loan application process for employees can easily be tracked month-to-month. If you are a hospital, it might be something as simple as providing tools and challenges for increasing patient satisfaction scores.
Should we really be tracking ROI of the intranet anyway?
Yes, you should. I think the important point is that you should shift the expectation of how executives measure it. Like email systems, most organizations ascribe an intangible value to the intranet. However, have you ever been asked to measure the ROI of your email system? Not likely. Most people and organizations inherently know and understand the value of communication and don’t require a detailed ROI breakdown. In many ways, intranets are like email systems – they assist us in accomplishing mission-critical work.
What has helped you make the business case for a new intranet?