De-Mystifying ROI Calculation for SharePoint
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De-Mystifying ROI Calculation for SharePoint

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ROI is a "fancy" acronym for Return on Investment. While ROI implies success, it usually involves mysterious mathematical formulas that many people can't see or understand. So how does an everyday ...

ROI is a "fancy" acronym for Return on Investment. While ROI implies success, it usually involves mysterious mathematical formulas that many people can't see or understand. So how does an everyday SharePoint business owner tackle the ROI puzzle? Do you just "flip the switch" on your implementation and move on? Or are you so busy with post-launch support that you don't have time to circle back and quantify your results?


This session will help you demonstrate the business value for your SharePoint implementation. We'll examine common ROI calculation methodologies while providing strategies for identifying your ROI niche and quantifying the business value of your SharePoint implementation.

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    De-Mystifying ROI Calculation for SharePoint De-Mystifying ROI Calculation for SharePoint Presentation Transcript

    • De-Mystifying ROI Calculation for SharePointSarah Haase, The SharePoint Librarian@sarahhaasehttp://sarahlhaase.wordpress.com/
    • Collaboration & Search EngineerTechnical writerCMS/KM implementation & supportInformation architectLibrarianUser adoption enthusiastCode-free SharePoint solution builderAuthor
    • • Reduce email • Focus on • Leverage all Community development Information architecture dependency structured knowledge data assets • Provide just-Process optimization in-time • Incorporate • Build tools information taxonomies people want for efficient to use • Build retrieval automated • Folksonomies workflow • Focus on lists, (tagging for processes not libraries the masses)
    • Businesses shouldn’t be run via spreadsheets stored on shared drives.
    • Left to their own devices, well-intentioned people will live in information chaos.
    • Your SharePoint solution isn’t complete until you’ve measured its effectiveness.
    • ROI is meaningless without context.
    • Agenda• What is ROI?• What does good ROI look like?• Units of measure & common methodologies• Building your valuation roadmap
    • What is ROI?
    • ROI is…• A cool acronym• A method of quantifying benefits reaped• A way to “feel good” about an investment• A way to offset opportunity costs• A method for validating good decisions• An afterthought
    • TYPICAL measurements Number of sites Successful upgrade Business adoption and site collections Percentage of “business critical” Space consumption Business reliance docs stored in SharePoint
    • BETTER measurements Shortened Quantifiable Quantifiable business drop in user drop in processes confusion “hunting” time Use in place of Successful Actual dollar expensive replacement of savings alternatives legacy systems
    • The hard part is…people don’t understand how to make the leap in their organization
    • Quantitative ROI Qualitative ROI Money Emotional -Increased revenue -Improved employee morale -Eliminated tools -Elimination of unpopular tasks -Increased productivity -Reduced user confusion -Lowered overhead per sale -Happier customers Time Evolution of work -Streamlined business processes -Ability to focus on higher-value tasks -Just-in-time (JIT) information -More automation, fewer mistakes -Less rework -Simplify the “hairball” -Faster time-to-market -Reduce employee turnover
    • For most for-profit companies, cash is king.In some cases, SharePoint may (in and of itself)be a revenue stream. But for many of us,SharePoint represents “soft money”—akamoney that we can avoid spending on a varietyof other tools. Or money we can save bylowering our overhead costs and decreasingour time-to-market.
    • Tool elimination example Expenditure $800,000 • “Proof of concept” $700,000 – Speed to Market $600,000 – Low / No Cost $500,000 – Leveraged existing platform $400,000 – Minimal infrastructure cost $300,000 – Leverage existing resources $200,000 – Quick to deploy & modify $100,000 $0 New Sharepoint Application
    • TIME savings
    • Base formula Time to # of Hourly Process complete iterations $$$ rate cost 1 iteration
    • Base formula Time to # of Hourly Process complete iterations $$$ rate cost 1 iteration 15 minutes $650 4 hours x 52 times/year x $50/hour = $10,400
    • “Before” process cost Cost savings“After” (ROI)process cost
    • Evolution of work& Emotional ROI
    • Key “emotional” factors• Push content to the right people at the right time• Eliminate the “soul crushing” work• Don’t make them have 45 windows open at once• Make your employees & customers happy• Personal measure of “What’s in it for me?”• Ability to focus on higher value-add tasks• Don’t take it away!
    • User stories SurveysSharePoint usage metrics Interviews Serious anecdotes
    • - Sue HanleyA Practical Framework for SharePoint Metrics http://www.susanhanley.com/white-papers.htm
    • Step 1: Find what is needed• Ask questions: – What do we value? – How do we work? (aka how formal are we?) – What matters to management? – What does “good” look like? – How do we talk about our successes & failures?• Find examples of success and backtrack
    • Step 2: Plant your stake Define Pick a focus checkpoints on area your route Build a Define your timeline & plan role for delivery Determine Garner support training needs
    • Step 3: Take baseline measurements
    • Step 4: Define success criterion From the general To the specific Reduce duplicate storage of content Eliminate 15GB in duplicated storage within 6 months Reduce time it takes to complete a business process Reduce weekly overhead of XXX process by 15% Generate value Generate $250,000 in BPR savings within 1 year
    • Step 5: Calculate your ROI• Be consistent• Answer the “What’s in it for me?” question• Phrase your success in real $$$• Unite quantitative & qualitative metrics for a richer experience• Add up all the ROI for every project• Think about your delivery mechanism
    • Step 6: Spread the word• Money talks• Build your elevator speech• Partner, don’t conquer• Don’t forget the higher-ups
    • Sarah Haase,The SharePoint Librarian@sarahhaasehttp://sarahlhaase.wordpress.com/sarah@splibrarian.onmicrosoft.com