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Measuring ROI points out apps needed

Measuring ROI points out apps needed

There's so much going on in the world of intranets that I rarely have time to write about research reports. However, a report from the Meta Group that recently crossed my desk is worth discussing.

The report sheds light on the interesting challenge of measuring return on investment (ROI) for intranets. Indeed, having specific measurable goals for an intranet is one of the best ways to not only get a greater level of support from management, but also to demonstrate the intranet is helping improve communication and lower overhead costs.

Typical measures of ROI can take the form of simple resource or financial measurements, such as a 20 per cent reduction in printed memos, a reduction in the need to hire more internal support people, or a 50 per cent lower cost of disseminating information to all employees.

The Meta Group's study was built around an extensive survey of 41 US-based companies, detailing how they built and used their intranets.

Of that total, 32 companies indicated they primarily used their intranet for publishing documents - such as the company newsletter, events calendar, and similar material. The return on investment for publishing information, however, was rather low at 18 per cent.

By comparison, database access applications, which were only in use at 7 per cent of the surveyed businesses, offer a remarkable 68 per cent return on investment. Inventory-management applications were calculated to have a 52 per cent ROI, though were exceptionally unusual: only two companies of those surveyed had it.

One conclusion of the study is most companies tend to approach intranet implementation as a technology issue rather than a business issue. This tends to increase implementation costs, as new and incompatible technologies for security, application design, and directory management are built and deployed, rather than reusing existing solutions.

After document publishing, the next most common uses of corporate intranets are for collaboration via groupware, typically Lotus Notes or Microsoft Exchange. These solutions offer a ROI of 40 per cent.

The survey also reinforced that significant intranet applications can be developed for less than $US100,000, and that successful application deployment can be targeted at a departmental, divisional, or (ideally) enterprise-wide level.

Concluding the report, Meta Group officials said the results of the study show companies that carefully select applications for intranet deployment, and have the cooperation of product managers, will benefit the most from intranet technology.

Of course, their conclusion is pretty obvious in my view: the worst way in the world to get started with an intranet project is to do so without any buy-in from higher-level management. It's impossible to really make any intranet a success without it being viewed as an opportunity by everyone involved.

In terms of application deployment, a careful usage analysis before launch will always result in greater success after the application is running. There's nothing more frustrating than implementing a solution just to find it doesn't scale well, is incompatible with some subset of the hardware in the organisation, or is a nightmare to configure.


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