The ROI of Enterprise 2.0

Created on Friday, 27 May 2011 14:59

Written by Jacob Morgan

In a previous article we looked at the two key changes we are seeing today which are moving us towards using emergent social and collaborative software within the workplace (commonly described as Enterprise 2.0), these two changes were culture and technology.  Today, we’re going to look at the financial benefits of using this type of software.  Let’s start out by looking at piece of research from McKinsey, one of the world’s leading management consulting and strategy firms.


This piece of research examined the benefits of web 2.0 technologies for internal, customer related, and partner/supplier related purposes.  While all three sections are interesting, we are going to focus specifically on the internal portion.  These responses came from organizations around the world which are in various industries and different in size.  We can see that out of the almost 1,600 respondents that 77% of them saw increases in speed of access to knowledge.  This could be converted to a dollar amount of we look at how much time was saved and what the wages of the employees are, but McKinsey did not disclose this information.  Reducing communication costs and increasing speed of access to internal experts were also some of the top benefits noticed follow closely by a decrease in travel costs (a clear financial number).

Deloitte also conducted some research of their own to see how enterprise collaboration improves business performance.  Here are two interesting visuals from their report.  

This illustration shows us how the number of monthly compliance hours decreased after an internal wiki was deployed, clearly something which can be tracked back to a financial number for Alcoa (the company who deployed the wiki).  We can see that as more content was created and populated in the wiki the more the number of compliance hours decreased (on average).

In this visual we can see that when OSI soft deployed their collaboration solution that they saw a dramatic 22% improvement in issue resolution time.  Again, something which can be tracked back to and measured in dollars and cents.  It’s also interesting to note that while improvement was seen towards the beginning of launch that it did take around 12 months to really notice this 22% improvement.

These examples and pieces of research show that there clearly is a financial return from these investments.  One of the important elements to note is that although the organizations which have deployed these collaboration solutions may be large, the user base which was responsible for using and deploying these solutions were actually much smaller (in the Deloitte report for example the user base never exceeded around 300 employees).  This means that these benefits are not exclusive  to large enterprises and that in fact smaller organizations and teams realize very similar benefits of enterprise collaboration.It’s also important to note that there is a bit of a black box effect with some of these investments because it’s hard to predict and oftentimes even measure what the return is. An interesting piece of food for thought, is being able to solve a problem just as good as being able to show a financial ROI?