Measuring return on investment on many
enterprise 2.0 initiatives can be difficult. However, it is also very useful for a
variety of reasons. The business case should ensure that the success
measures are in line with the enterprise’s overall business strategy. Consideration
of the costs and benefits are essential in order to make sure the initiative is
successful and delivers what is needed. It can also provide concrete
evidence of the value to support further investment. I have done many ROI analyses
over the years and am convinced they are more of an art than science. However,
I also always try to work with the organization’s finance people to both ensure
the effort is aligned with how similar efforts are done and to gain credibility
with senior decision makers. This is where the finance function can make a
significant contribution.
In order to help finance professionals make the
case for their organizations use of web 2.0, Chartered Institute of Management
Accountants in London has created guidelines for framing business
cases. These guidelines help management accountants through the decision
making process and identify the use of tried and tested techniques to help
organizations make the right decisions and measure their return on
investment.
The report is appropriately titled, Beyond
enthusiasm: making the business case for your organization’s use of Web
2.0. While they are certainly not
the same, I think the report will be useful for both Web 2.0 and enterprise 2.0
efforts. Louise Ross authored the report.
Here is a blog post she wrote about the effort, More than enthusiasm for web 2.0. Louise wrote that she did this report
to bring an accountant’s perspective to the issue. I certainly applaud this
view. She also did the report to “to share my desk research, and
collect together cases of web 2.0 implementations to give others an idea of
potential benefits and pitfalls. Management need to be reassured that
implementing web 2.0 doesn't have to be a blind leap of faith. Given evidence
about others' experiences, and guidance on how to deal with rather
unpredictable outcomes, it's perfectly possible to construct a business case
for web 2.0 as it is for any other investment.” These are more wise words.
The report begins with a quote, “technology can
serve as a bridge, never a destination.” I like it already. It contains twenty cases and looks at
successes and failures. It ends with a framework for constructing business
cases. Louise acknowledges that
while it can be difficult in finding benchmarks for a new technology such as
Web 2.0, that is no excuse to not determine the business case. She adds that
accountants are trained to deal with varying qualities of data and how to
present them to senior management. She concludes that making a Web 2.0 case for
Web 2.0 is not essentially different from other efforts, it does pose special
challenges in the areas of control, governance, and risk management. Louise also feels that the greatest
benefit from Web 2.0 is encouraging collaboration. To that end she requests comments
about the report on her blog. I did try to do this but it appears that you have
to be registered with the CIMA to make a comment. That is my only fault with the effort so far.
I look forward to reading the details with greater care but wanted to share this with you so you can do the same.
@Bill Thanks for pointing to this - I've downloaded the paper and once you accept the audience is accountants it makes a useful read. Through my own lens of being focused on how to define and realise benefits from programmes of change, I think Louise has touched on a lot of key points, I think the paper could be improved by addressing the usefulness of benefits maps to link the benefits with the necessary behaviour changes as well as technology enablers.
Shame that CIMA don't follow her advice and make it so hard to comment. I tried signing up to their site, but the process fell over at various places, and indeed some pages seem to suggest that you can only sign up to comment if you are a CIMA member!
Posted by: Julian Elve | November 16, 2009 at 03:51 AM
Julian - Thanks for your comment. I agree about the CIMA site as I tried to comment and found I could not either. Bill
Posted by: bill Ives | November 16, 2009 at 10:00 AM