How ROI can be Calculated for Enterprise 2.0 Projects
Return on Investment (ROI) can be a daunting and overwhelming task, but given the advanced analytics it is defintely possible. So what is ROI? ROI is a ratio – costs versus expected income. But in the case of collaboration environments (Enterprise 2.0 projects), it is not always measurable in money. This post will discuss examples of how ROI can be calculated for Enterprise 2.0 projects through employee engagement, turnover and sales.
Ogranisations that have implemented Web 2.0 technologies attract a much younger workforce. This group of young employees that utilise enterprise social software platforms in the workplace are more often engaged than similar employees who do not use these tools. Through the use of social media, employee engagement increase because they find that they become part of something larger than themselves and their departments. As employee engagement increases, knowledge and work become more transparent and employees are able to get real-time information and feedback. So how do you measure employee engagement? Employee engagement can be measured by viewing an employee’s usage of the enterprise social software.
Employee turnover is another way of measuring ROI. Employees that utilise activity streams in the workplace are less likely to turn over than those that do not use activity streams. Acticity streams allow for enterprise collaboration, uniting people, data, and applications in real-time in a central, accessible, virtual interface. Through the use of activity streams, employees can find data that he or she never knew existed, collaborating around this information and accessing it in a variety of ways (e-mail, mobile application etc). In addiation to increasing employee engagement, social software platforms enable employees to get onboard more quickly, help them find the information they are looking for in order to be successful and and help them receive real-time feedback from co-workers. How can turnover be measured? Like employee engagement, turnover can be measured by viewing an employee’s usage of the enterprise social software. As well as this, turnover can be measured by obtaining data concerning the employee usage of the community as well as data that could have an impact on turnover rates such as tenure, salary, and market conditions.
Monitoring the level of sales within an organisation, is another way of measuring how ROI can be calculated through the use of social software platforms. As stated before, social media platforms provide employees with real-time information, thus providing them with key business insights enabling them to react faster to product availabilty, customer issues, current news on competitors, and other data that will help employees to be successful. So how do you measure sales? One way to measure the impact that social software platforms has on sales is to focus on the results of the sales team.
Employee engagement, turnover and sales are just three examples of ways in which ROI can be calculated for Enterprise 2.0 projects.
Here is a 6 minute video that I thought was quite useful in better understanding how ROI can be calculated for social media projects.