Measuring ROI in Social Media

I had an opportunity to chat with Andrew Conry-Murray, Business Editor for InformationWeek & Network Computing. Andrew was working on an article that was published this morning entitled "Can Enterprise Social Networking Pay Off?". Give the article a read for context - but I wanted to take the discussion a bit further here as well.

To me, it's less a question of CAN enterprise social networks pay off - but rather HOW. As Andrew suggests, the metrics are a bit softer than we're used to. After all, quantifying productivity gains or the value of breaking down geographic and organizational silos is rather difficult.

So let's start breaking down some of the opportunities to measure ROI here...

Proficiency

We had several goals when we started down the path of creating an internal enterprise community. Among the most compelling - Creating proficiency with enterprise 2.0 tools and techniques across the global workforce.

We're at a turning point in the way companies operate... At least in my opinion. We're getting away from traditional hierarchical organizational models and embracing flatter, more matrixed structures.  Yesterdays command and control techniques are slowly being replaced by more distributed ownership models. The notion of protecting and isolating knowledge capital is being flipped upside-down - and free flow and open sharing of information is becoming the new norm.

From my POV, this is a fundamental shift in the way we work. Those who don't keep pace with the change will be at a competitive disadvantage in the years to come. So, getting your workforce to understand these new behaviors while helping them understand 2.0 tools and how they can be applied to better communicate and collaborate is a strategic imperative.

But, the question remains - How do you place a hard number on the transformation of your workforce? It's kind of like asking for ROI around drivers education. Tough to quantify specific value - but I'd sure hate to be on the road if everyone didn't go through it.

Here's another that falls somewhere within the proficiency bucket - The breakdown of divisional, organizational or geographic silos. If you follow EMC - you know the company has gone through dramatic transformation since 2000. We've acquired a whole slew of new companies (somewhere North of thirty) and entered new markets.  With each acquisition comes a new culture, new set of products, new market segments... How do you manage communication and collaboration across such a diverse organization? The answer is rather simple. Our EMC|ONE community has helped EMC learn about ourselves - helping new business units share ideas beyond the traditional confines of their team. It's exposed new lines of communications amongst ourselves - and we simply didn't have a means to do this just a short time ago.

Can these things be measured? To some extent yes. Our employees are more versed in a 2.0 world. They're more prepared and willing to engage with external audiences. We're positioned to better engage with those outside the confines of our firewall - building new relationships and introducing new ways to collaborate and innovate with our prospects, customers, partners, etc;. It's of tremendous value to an organization - but difficult to quantify an exact return.

Productivity

Productivity gains are likely a bit easier to quantify than proficiency. I've heard several anecdotal 'wins' (i.e. the process to name a product takes us half the time it used too...), but have yet to focus on compiling and converting to actual cost avoidance. But even under the topic of productivity, much of this is hard to assign value.

I often cite our sales team as example. In a sales role, you're always looking for information - and more often than not, very much reacting to the current climate. These poor soles spend considerable time with outbound email blasts looking for information - be it on a competitor, a competitors' product, etc;. They're spamming their network out of desperation and probably have a 50/50 chance of getting back the info they need. Take that behavior out of email... Put it in a community platform where it can be shared, updated, edited, tagged and indexed - forever. My behavior now transforms from desperate email spam to a finite search in a community where ALL of my peers are participating. We just managed to get the rep the information they need - quickly - and without disrupting their network with unnecessary email traffic.

Andrew  and I talked about a 'skills finder' or 'expertise locator'. As a company, we've been talking about this need for years... The easy ability to search across such a large employee base and find someone with domain specific knowledge. With community and robust profiling, a very common pain point is easily solved. Four years ago - if you needed someone in the US with experience in a specific vertical who was well versed in AJAX - as example, good luck. You might try a barrage of outbound emails - but you'd likely come up short. Now, search across the users on EMC|ONE. Chances are, you'll find who you're looking for. There was no mechanism to make this connection a short time ago - now it's easy and instantaneous. Connecting the right people in a corporation is key - assigning hard figures to the value is a bit more challenging.

Green - The Low Hanging Fruit

Sorry - but I have to go here. IMO, it PALES in comparison to the less tangible value above.... Almost to the point of not worth mentioning. But, it's there and is easy to measure. 

Create a Powerpoint. We all do it everyday. Let's say it's 10MB (I do like my slide transitions ;). I send it to my staff for review via email - they send it to their teams. A few update it - send it back with edits - so on and so forth. My 10MB file has now exploded to half a gig in disk... Multiply this across the enterprise and consider the physical disk and power needed to sustain.

Now take the same document and apply some 2.0 love. I don't email it - I put it in the community for collaboration. One copy - now tracked in a central place with versioning built in. There are measurable cost savings to be had here from a physical disk and energy point of view. Better yet, I now realize the power of community. Suddenly my document (once limited to the confines of email) is out their for contribution from *everyone*.

What Else?

The opportunities seem endless. At some point, we'll need to look at employee touchpoints in the 2.0 world. How often are your employees engaging outside - with who and where - and what's the impact to the brand? How are such discussions improving our business or enhancing the total customer experience?

Yes, I think about hard ROI. And it's tricky. But when in doubt, I fire up EMC|ONE at any minute of any day and see relevant business conversations taking place on a global scale. I see more than half of our global workforce sharing and collaborating in ways that they could not two years ago.

To me, that's invaluable.

What are you doing to measure ROI on social in the enterprise? Any comments, links to blogs, articles, etc; welcome.

Comments

[Dorianne Lefebvre]

Len,
Here's a link to a blog written by Professor Mary Lou Roberts -- she literally wrote the book(s) on Internet Marketing and she blogs regularly on social media trends. It makes sense for expanding corporations to seek user generated content from both internal as well as external sources.
http://diy-marketing.blogspot.com/2009/03/user-satisfaction-with-your-social.html

The possibilities for corporate social media collaboration are endless. Transparency provides a lot of opportunities!

Dori Lefebvre
Marketing Communications Consultant

[Dorianne Lefebvre]

(Another link)

http://diy-marketing.blogspot.com/2009/02/identifying-and-measuring-social-media.html

[Len Devanna]

@Dorianne, thanks for stopping by and for sharing the links.

I also came across this relevant post from @mashable writer Aaron Uhrmacher titled "How to Measure Social Media ROI for Business" http://bit.ly/10m5NM

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