Burton Group’s Craig Roth has written a very interesting post on The Role of Communication, Collaboration, and Content Technology Investments during Tight Economic Conditions. One passage in particular grabbed my attention:
“While [3C technologies] can be deployed to improve vertical business processes (such as order-to-cash or communicating design specifications updates to partners), they are also used to bolster horizontal business processes. These horizontal business processes are some of the most common and fundamental to businesses, such as collaboration, expertise location, notification, searching, and documentation. These horizontal processes do not have ROI of their own, but rather act as multipliers when they are applied to initiatives to improve specific instances of business processes.”
That is absolute truth in my experience. Why then has no one ever figured out a way to apply such a multiplier as part of an ROI calculation? Probably because it is difficult to assign a value to activities such as collaboration, search, etc. Data on pre- and post-3C technology deployment activity would have to be collected for the specific horizontal process in question. For example, average search time for a subject matter expert would need to be measured both before an expertise location tool was deployed and after it had been launched. Then the multiplier effect of the new technology could be calculated and applied to a specific vertical business process ROI calculation.
This scenario immediately suggests a couple of things:
1. Communication, Collaboration, and Content technologies should be deployed in support of key vertical business processes and not for their own sake. Too often, organizations deploy 3C technologies because of a perceived need to improve functionality, but one that is not explicitly tied to a core business process. The right question to ask is “how will using this [specific Communication/Collaboration/Content] technology improve the performance of our [specific key, cross-functional] process?”
2. Calculating a believable, currency-based ROI in a 3C technology is difficult if not impossible. Measuring a process time reduction value for the technology and applying that value as a multiplier to a core business process redesign ROI is both viable and believable.
Perhaps what is needed is a research study that would allow us to develop a numerical sense of the value of those multiplier activities. Are you willing and able to contribute data so we can reach a consensus on the multiplier value of collaboration, search, expertise location, and other knowledge/information management technologies? Are you aware of any similar efforts that have been documented? Please let me know. Discovering accepted multiplier effects for specific 3C technologies would be a great aid for many professionals attempting to justify related investments in their organizations.