How to demonstrate Return on Investment (RoI) for Enteprise 2.0

Tags: return_on_investment roi quantitative_rhetoric

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Session Description

The question "What is the RoI for Enterprise 2.0?" is a question as frequently asked as it is misunderstood. Matt will draw on real world case studies (both successes & failures) to assist you in your RoI creation process. In doing so, he will borrow from Aristotle, Lenin & Geoffrey A Moore.

Session Format

Single Speaker

Target Audience

Beginner

Principal Speaker

First Name

Matt

Last Name

Moore

Title

Director

Company

Innotecture

Professional Biography

Matt Moore has spent a decade working in knowledge management, learning & development & internal communications at organizations such as PwC, IBM, Oracle and the Australian Securities & Investment Commission. He is now a director of Innotecture, Chair of the NSW KM Forum & an occasional lecturer at University of Technology Sydney.

Company Background

Innotecture is obsessed* with helping people work together better. We use technology (but we don't build it), design thinking, facilitation techniques, social network analysis, narrative & observation to achieve this. Ask us how.

*And we don't use that word lightly.

Co-Speaker

First Name

Last Name

Title

Company

Professional Biography

Company Background

Additional Panelists

Posted on 11/22/2009 03:42 PM CST , Last Modified on 01/21/2010 11:35 AM CST

Comments (22)

Matt Moore - Nov 23, 2009

Some of the material is from this paper/presentation combo: http://innotecture.wordpress.com/tag/roi/ - but with the Enterprise 2.0 issue, I want to take it further & deeper...

David Williams - Nov 23, 2009

Matt

while the actkm 09 approach was great, (the 3D map impressed me) I think that you could modify it slightly to take a visual mind-mapping approach to determine benefits, measures and scores/levels and then flow on benefits from implementing Enterprise 2.0, almost providing a cascade or wave of changes that occur. You would also need to address the dis-benefits as well. This is the approach we worked up for a Govt dept earlier this year and aligns with the benefits realization approach as described in the UK's MSP methodology.

happy to discuss further

Dave Williams

Matt Moore - Nov 23, 2009

Dave - I think that you may be wanting to meld my suggested talks into one big "mash-up". The other talk is the mapping one: http://boston2010.e2conf.spigit.com/permalink/2009/11/22/mapping_enterprise_2_0

Mindmapping value drivers, benefits, KPIs, etc is all good. And if I have enough time then I would probably encourage people to do that. You may remember the value driver slide in the original deck from actKM 2008 which is a very crude example of the exercise you are describing!

Jon Ingham - Dec 15, 2009

ROI is clearly a key issue Matt and I don't think anyone else is planning to address it so specifically. From a brief scan through your presentation, I like your approach. I'd perhaps like to see more on pathos as well as logos (which is part of what I'd suggest would be an appropriate approach for enterprise 2.0 - always depending on the needs of the audience of course).

Matt Moore - Dec 15, 2009

Jon - Thanks for the comments. Happy to up the pathos quotient! The paper talks a lot of about analytical arguments because that's a major stumbling block for people but the overall thrust is that you need quant, qual & cred to make your case.

Patrick Lambe - Jan 7, 2010

I'd add a bit more on the cred/ethos side as well - what does it mean and what's involved in acquiring it? There will be a temptation to interpret this in synchronic marketing terms - ie how good a tale can you spin, rather than the classical sense of diachronic reputation/track record PLUS social connectivity (which means that ethos means you are familiar with your audience and they are familiar with you). And I'd like to see something on how the three connect/build a story together.

Patrick Lambe - Jan 7, 2010

Oh, and I'm only voting on condition you make a video podcast of this presentation at some point!

Matt Moore - Jan 7, 2010

Deal!

Matt Moore - Jan 7, 2010

That will be a really interesting challenge - definitely worth a go!

Olivier Amprimo - Jan 11, 2010

Hi Matt,

I've played the game of ROI a while ago myself, and I am never very comfortable with it but very happy you re-open the Pandora box!

ROI is the buzzword for justification in a world where people are in a hurry, cannot and don't want to know the details and want to benchmark options to make decisions. ROI is quantitative because of that.

ROI is a ratio with a clear definition in the management accounting world. The problem is that the terms is popular and is used far beyond its original, limited definition. Today, behind this popular term, there is a lot of methodological and scope versatility, particularly when it comes to qualitative thinguies like knowledge. My point is that the elements taken into consideration may vary, the way the elements are taken into consideration may vary so that the very benefit of traductability of ROI - because of a commonly accepted definition and methodology to build it - is gone and the door is open for manipulation.

So if you dig into philosophy there is potentially a lot to do with Phenomenology and Philosophy of Language (the justification bit) and definitely Ethics and Epistemology (for the validity and visibility of the making of ROI).

My 2 cents. Happy to discuss further!

Matt Moore - Jan 12, 2010

Olivier - As with several other commenters, I think we agree about a lot! I am interested in the ways in which ROI is actually used in organisations to justify decisions - rather than the way we are told that it is used. And I think the term "game" is well applied to a lot of ROI activities.These can be pretty serious games however.

I would agree that you could have a very philosophical discussion about this - but I doubt the Enterprise 2.0 conference is the place for that. I am using a dash of philosophy (in this case some old-skool Aristotle) but I'll mainly be focusing on the practicalities.

Olivier Amprimo - Jan 14, 2010

I understand your point Matt. Philosophy is rarely a topic to be discussed in a business environment, even if it helps sensemaking and provides useful frameworks for actions when correctly understood.

Depending on the time you have you might want to do this below the radar work to come up with practical ideas for your prez.

You get my cast! Good luck!

Olivier

ohhh between, Aristotle has never been old-skool. I'm sure you know that ... since your mention it ;-)

Sarah Davis - Jan 12, 2010

Matt - my vote is cast.....

Kirsten van den Hout - Jan 12, 2010

If there's room, any chance to add the little word 'social' ahead of ROI in a couple of your examples? We're in this business to make a difference, non?

:-)

Matt Moore - Jan 12, 2010

So the presentation will be digging deeper than mere $$$ (although even social enterprises need money for things) - altho $ will get a mention. One idea that's important to understand is how technology can align with "strategic intent". If you get that right, then the numbers are much easier to tackle.

kim sbarcea - Jan 12, 2010

Matt you have my vote...I'd like to see you challenge the very notion of ROI. Are we wasting too much valuable time fretting over ROI? Where might our efforts be better spent? But if you go ahead with ROI, it's a particular "management speak" one must adopt: how can the KM person be savvy, political and not go down in flames??

Matt Moore - Jan 12, 2010

Kim - Have you been peeking at my notes? I think we would agree that ROI is not really an end in itself. I want to explore what the savvy Enterprise 2.0 evangelist needs to know about ROI in order to use it to their advantage rather than be poleaxed by it.

Alister Webb - Jan 15, 2010

Matt, I like this proposal. One of the things I have found personally is that the success of an ROI pitch can depend very heavily on the personality/attitude of the person you're pitching to, or in a group scenario, an understanding of the kind of data the chief influencer or most senior person likes. Or their track record/history making other decisions. Or what they know and unerstand conceptually about Enterprise 2.0/social media. This might significantly alter the shape and form (and potential success) of an ROI argument. To me this is a vital step in the planning.

Good luck, you have my ballot!

Matt Moore - Jan 15, 2010

Alister - Absolutely!!! You never pitch in a vacuum & you need to understand what turns on the people you are pitching to (what you might call their "strategic intent"). And the tricky thing is - if there are several of them, it might be something different for each one...

Phil Lloyd - Jan 17, 2010

Hey Matt, good luck with this, you have my vote. I hope you are familiar with Jack Phillips' approach to measuring ROI, and have read Roger Kaufman's comments and approach.

Matt Moore - Jan 17, 2010

Er, ahem, of course I am! Would you care to remind me of these approaches? Possibly with some links...

Matt Moore - Jan 20, 2010

OK - Had a look at the ROI Handbook (thanks very much). In terms of specifics, it's great. Where I think it's a little naive (perhaps "overly rational" is better) is in understanding the role that ROI discussions actually play in organizations.

If I was going to be a little cheeky, I would note that the figures on the front page of the ROI Institute are all volume measures (# of people trained, etc) rather than value measures - http://www.roiinstitute.net/ - which seems a little odd given the method being espoused. What is the ROI of the ROI Institute?

As for Kaufmann's criticisms of Kirkpatrick's 4 levels (thank you again) - yip, largely agree - in fact, I'd suggest that this bit of research is even more interesting: http://www.journal.elnet.com.au/index.php/impact/article/view/15/21 - but I'm still debating with myself which comments are relevant to Enterprise 2.0 cases and which aren't.