Demonstrating Your Intranet ROI (Return on Investment)
Let’s be honest, the purchase of an intranet is no small investment. So when ready to pitch your intranet ideas to your corporate leaders, it’s essential that you’re able to demonstrate value added.
Of course, most business owners understand the implicit or even explicit value an intranet provides. These benefits, however are often intangible, soft benefits that are hard to measure. Because of this, there are very few businesses that actually measure the return on investment or ROI. But this is a mistake. Because when the budget axe comes slashing down, the corporate intranet with its ‘soft, hard-to-measure’ ROI is an easy target. Justifying any expense in hard times must come down to the bottom line, i.e. what value is it adding? Nothing demonstrates credible value like measured performance.
Where to Start
Yes it is difficult to measure ROI. But there are ways.
Why not start with the specific benefits? You can break these down into soft and hard benefits categorized by reducing costs and enhancing productivity.
Intranet Soft Benefits:
These benefits are the intangible benefits that everyone benefits from but don’t always get linked to new software like the intranet. It’s important that you give credit to the intranet as these can bring significant returns. Soft benefits can include things such as reducing the email culture within your organisation. Organisations may also experience an increase in their productivity as employees are collaborating more, sharing ideas, becoming more efficient, more engaged and enthusiastic about the organisation.
Other Soft benefits might include:
- Improved internal communication
- Streamlined and secure content management
- Enhanced employee collaboration (such as idea sharing, departmental cross working etc)
- Streamlined HR processes and internal operations
- Improved Employee retention and satisfaction
- Increased revenue through efficiency savings
- Enhanced organizational knowledge
Intranet hard Benefits:
Hard benefits are easier to measure- because they’re much more tangible. Every business will have savings that are specific to their business. For example, if you’re a business that publishes regular bulletins for thousands of employees every month, adopting an intranet may have saved you $X on printing and distributing the bulletin.
Other hard benefits may include:
- Reductions in hardware and software
- Reduced time to market
- Time saved on induction and training new employees
- Increased sales revenue (a hard benefit than can relate back to increased efficiency and time freed up for employees to concentrate on productivity rather than email, document storage etc.)
- Online expenses: saved x person-days per month.
- Finance savings: online workflow can reduce administrative processing time
- Reduction in travel and communication costs
Methods for Measuring ROI
Which brings us to the how. How do you measure ROI? Well, there are whole schools of thought dedicated to measuring, defining and detailing the business returns on investment. Having said that, we won’t get into too much detail here but here are a couple of methods that can get you started:
- Link your intranet ROI directly to your business KPIs
Start with looking at your existing KPIs and assess how a social intranet can impact them. Because these indicators are associated with business success, linking your intranet to these is sure to prove intranet success or failure.
- Measure user-satisfaction
Give users a scale of 1 to 10 and ask them to measure their user experience like their movie-going experience. Users will instantly engage and it’s a good way to show management that it has made an impact to employee satisfaction.
Can you think of other ways you can measure your ROI?
For further ideas on how to pitch your intranet ideas to your bosses, check out our guide to pitching to your CFO.