Sunday, May 31, 2009

Calculating ROI Of Enterprise 2.0 Is Calculating The Cost Of A Lost Opportunity

I get this asked a lot – How do I calculate ROI of Enterprise 2.0? Bruce Schneier says, “Security is not an investment that provides a return, like a new factory or a financial instrument. It's an expense that, hopefully, pays for itself in cost savings. Security is about loss prevention, not about earnings. The term just doesn't make sense in this context.”. Similarly thinking of Enterprise 2.0 as an “investment” looking for a return does not make any sense. At best it is the cost of a lost opportunity.

If you are a CIO looking for a detailed ROI metrics or a simple checklist for Enterprise 2.0 you are probably out of luck. However you could adopt a two-pronged approach. Convince the business that the organization needs Enterprise 2.0 by showing whatever resonates with them e.g. sharing files help reduce email quota, Wiki makes people productive by X percentage, giving them a copy of The Future of Management by Gary Hamel etc. Once you do get a green signal for Enterprise 2.0 deployment, please, don’t be prescriptive to frame the problem or the solution. Instead simply provide the tools at grassroots and let people run with these tools.

For any collaboration, productivity, and social networking tools there is content and there is context that significantly depends upon the individuals that use these tools. For example some people prefer to be human-centric against artifact-centric. Some start interacting and collaborating with other people before exchanging the artifacts and there are others that prefer collaboration that is primarily an artifact-driven. Most of the tools mandate that users make an upfront choice. Even worse the IT makes the decision for them when they decide to purchase a specific tool assuming how people might want to work. This is the reason I like Google Wave since it does not make any assumptions on how people may want to use it. In fact it allows people to weave across people and artifacts seamlessly.

When Google Wave was announced Google spent most of the time demonstrating what it does and spent very little time showing what problems it is designed to solve. They received quite a criticism for that. Many designers questioned Google whether they really know if people want to work this way. Some bloggers called it an act of breathtaking arrogance of blowing off potential competition and touting tech buzzwords. I believe they all are missing the point. Google Wave has broken the grid that the designers are very protective about and has empowered people to stretch their imagination to make mental connections about how this tool might meet their needs that no other tool has met so far.

Would you still ask what’s the ROI?

1 comment:

Prashanth said...

I have seen several people using current web 2.0 products the way Google Wave works. For example, it is possible to start a wiki page build a conversation in the page and turn the conversation into a document. That takes a highly disciplined team of people who all understand the team collaboration protocols very well.

The Google Wave team has recognized what people are doing today using various tools and is providing a frame work for such behavior.

When I look at Google Wave, I see 'MS Outlook' of the next generation. I see a generation of people opening Google Wave at work and doing most of their daily tasks such as communicating with other, discussing things, asking questions, creating artifacts all using Google Wave. It is just that the will do all these things far more efficiently and collaboratively. We do all these things today. We use Outlook to email, WORD to create documents, A Wiki to share the documents with others, messenger to chat with people, linked-in to build a network. All these thing can be replaced with Google Wave for a majority of organizations.