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Q U A N T A T I V E
Perspective (cont'd)

A Word on the ROI Question

In a controversial book titled, Does IT Matter?, journalist Nicholas G. Carr recently pointed out that information technology has a mixed track record in improving employee productivity. He argued that historically there have not been clear correlations between information technology investments and increased employee productivity. Some executives in large companies stretch this pessimism to include corporate intranets as well. As you look to enhance your intranet, expect to face some resistance.

Corporate intranets do improve an employee’s ability to access information needed to do the job. They enable the employee to connect with other employees more easily. For large companies, they also serve as a cost-effective communication tool, saving employee time and employer dollars. But whether that extra time is used to conduct more business, make better decisions or simply to leave work early is hard to tell. No amount of intranet analysis or market research is going to change that. That is why, when considering intranet investments, it is imperative to establish clear objectives and track the results as scientifically as possible. Do not upgrade your intranet just because you have the money to do so, or because a software vendor has sold you a new search, collaboration or portal package. Recognize that measuring intranet ROI will sometimes be difficult. The expected rate of return, the payout period, the investment’s expected productive life and the risk in not making the investment or deferring can be difficult to determine.

Nevertheless, today every Fortune 2000 company has an intranet, and one that they continue to invest in and enhance. The expected payback for these companies depends on the intranet’s purpose, its maturity stage, the company’s industry and the company culture. But the Fortune 2000 companies continue to invest because they realize their knowledge workers need the intranets just as much as they need email and telephones. You can’t place a numeric value on the telephone or the email; likewise, it is sometimes difficult to assign a monetary value to the intranet – which doesn’t mean you shouldn’t invest in it.

Add your Metrics

The dynamics of enterprise-wide technology implementations require metrics that are not one-size-fits-all. Matt Moore, in his presentation, "Showing the value of KM" provides some examples of how to identify key linkages within an organization for value creation. A helpful library of key performance indicators can be found here. Other examples of metrics from CLO media that help you to move beyond ROI include (see article under External Resources):

1. Job productivity (items in the job that were meant to improve after training)
2. Skill requirements measured against initial skills possessed
3. Efficiency rates (time or methods of completing a task)
4. Compliancy levels
5. Proficiency standards measured against eligibility and initial base knowledge
6. Learning-to-skills application measures
7. Demand on support needs such as a reduction in calls to the help desk
8. Number of employees trained in a specific skill set over time or need
9. Training costs per employee
10. Enrollment rates and attendance rates
11. Employee retention rates
12. Employee motivation and team cohesion

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External Resources

• Nick (Does IT Matter) Carr's blog
• Response to Does IT Matter
• Beyond ROI: Alternate Measures of Success

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