Developing a Business Case for Intranet Investment and Measuring ROI

1. Developing a Business-Case for Intranet Investment and Measuring ROI Strategic Intranets Summit 19 August 2010 Steve Lapwood steve.lapwood@intergen.co.nz

2. Is your intranet user-centric? How do you ensure your intranet strategy and development is linked to employee and organisational performance? Can you say that your intranet and knowledge management is based on good business practice? Is your intranet able to enhance collaboration? Organisations often struggle with these questions as they attempt to justify further intranet development and investmentto senior management and at the same time get employee buy-in. … learn more about the tools that will enable your intranet to truly enhance your organisation’s performance. Theme of the conference

3. Using practical examples, we examine how organisations justify investments to implement an intranet or refresh an existing one. Identifying the problem: Why do we needed to invest? What improvements/benefits will be derived from the investment? What makes a strong and believable business case? How do you quantify and measure ROI? Developing a Business Case for Intranet Investment and Measuring ROI

4. Do you need a business case for intranet? 5 years ago the answer would probably be “no” Now? Well, “yes” ….. But…. Question ???

5. 50% of SharePoint implementation had a business case half required financial justification Most have no management plan on features to be used 25% of organisations have no experience of ECM/DMs 22% provide guidance on content types and classification 15% have retention/disposal policies “… risking content chaos within SharePoint as well as outside of it” In a recent AIIM’s study:

6. What’s changed? Higher approval Recession Higher RoI Reduced Capex/Opex Tighter Credit Greater Justification Closer Scrutiny Delegation Limits Job (in) security

7. What makes a strong business case?

8. “Business Value” Source: Wikipedia

9. Market share, revenue, profitability (New) products & services Speed to market, adoption rate Profitability, loyalty/churn rate Reduced cost Process improvement, shared services, self service, leverage investments, upgrade/refresh Intangible benefits Satisfaction, market perception, referrals Perceived “business value” for Management

10. The Productivity Curve Improved future state Initial State BPI begins Performance Learning Curve Don’t quit here! Time Source: Karl Wiegers (2005)

11. Business Case or “Proposal”? Business case Proposal Executive summary Scope and Objectives Success factors Approach & Solution Plan, risks and deliverables Investments, RoI Implementation Plan Benefits metrics Executive summary Scope and Objectives Success factors Approach & Solution Plan and deliverables Benefits & Costs Selling Selling Control

12. Key stakeholders Sponsor Business “owners” Suppliers Customers “doubters” Executives Staff

13. How many business cases?

14. Persuasive descriptions of: What is proposed and why How it will be implemented Functions, Processes, Information, People When – phases, timelines How much – financial plus organisational investments How will it cope with agile business needs What are the benefits, how and when will they be realised Successful Business Cases

16. Business benefits (by outcome)

17. Quantified benefits value

18. Costs/ROI Financial scenarios

19. Outcomes, deliverables and benefits planned (with metrics)Source: Wikipedia

20. 76% of executives rate RoI as “somewhat” or “very” important BUT only 6% were actually measuring Priorities: Increase in competitive advantage Reduced cost of doing business Improved efficiency Improved customer service Increased revenue Importance of RoI Source: Prescience Digital Media 2009

21. Only 32% of projects are seen as successful by the business 24% are cancelled or never implemented Sponsors are now held accountable for benefits realisation For some it is career limiting/terminating Sponsors increasingly need to validate the benefits long after the deployment Project teams are now an integral part of the deployment and change management to achieve BAU How about benefits actually realised? Source: Standish CHAOS Report 2009

22. How do you quantify and measure RoI?

23. Place to find stuff Scope of Intranet/Extranet Information portal Content libraries Communications People Dashboards Ideas Best practice guides, how2 Discussions Feeds Place to do stuff Transact (through applications) Information capture Collaboration Forms Self service Workflow Content create, review, publish Virtual meetings Instant messaging

24. Tangible Benefits Top line Faster time to market Faster, more services Customer loyalty Reduced costs Travel costs Mailing costs Email traffic Search time, duplication Reduced errors, rework Staff replacement Faster applications development Maintenance and support Performance Transactions per staff Growth without growth

25. Intangible Benefits Improved knowledge base Integrated applications and information Hold admin level with growth Self-service reports Platform for applications Speed and cost of intranet applications Flexibility for changing business needs Improved service Faster order to delivery Increased loyalty, reduced churn Increase referrals Staff attraction and retention Staff education and development Greater empowerment Reduced escalation

26. ROI measures – quantitative RoI Framework Staff morale Quality of transactions Quality of information Level of compliance Effort to process requests Reputation in market, with peers Awards, certification Staff capability development Staff empowerment Senior management focus - strategy and leadership Customers lost, gained Customer satisfaction, referrals Days outstanding Staff turnover – cost and time Learning time - effectiveness Time to market New offerings Number of transactions Size of transactions Staff satisfaction levels Roi measures - qualitative

27. Global corporate insurance company - collaboration 1 new product per year, 10% take-up 442% over 5 years Global wealth management company – extranet portal Sharing analysis with high value clients – 12% loyalty £1M per year revenue increase Examples

28. UK engineering manufacturer – extranet portal Gained second service contract £50M over 10 years Regional Development Bank – extranet collaboration Reduced cycle time from 18 months to 9 months Improved quality of loans, increased approvals Examples

29. IBM W3 Examples 52% are more satisfied to be an IBM employee because of information obtained on W3 MSWeb 33% agree completely that MSWeb saves them time 27% agree completely that it has helped to improve their productivity Source: Prescience Digital Media 2009

30. US Facilities MGT CO Examples Has increased leads by more than 100%. $90 million dollars US in sales volume UK Telco Ideas Jar encourages staff to be submit ideas online Approx. 10% of ideas are implemented Saved £100m over 4 years Source: Prescience Digital Media 2009

31. Summary

32. Looked at why we need a business case Discussed what makes a strong business case Reviewed the tangible and intangible measures for RoI Summary  To achieve measurable benefits for the business