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The business case for intranet investment and measuring ROI

A tricky topic! Recently I presented a paper to Bright*Star’s Strategic Intranets Summit in Wellington.  This challenging topic caused me to reflect on the issues facing my current and past clients who either don't have an intranet and want one (the minority) or need to invest in significant improvements in their intranet (the majority).

The usual business case justifications for line-of-business systems (ERP, financials, CRM, transaction systems) are not so easy to apply when the main benefits of intranets are “soft” (better access to and sharing of information, workgroup collaboration, communication, etc.).  To extend my own experience, my research took me to international surveys, such as AIIM’s 2009 survey, which showed these challenges are not unique to Australasia!  With only half of intranets justified by a formal business case and only half of those with financial justification, it is clear that many intranets are just implemented.  In the current economic climate this is unlikely to continue. Senior management are demanding more solid justifications for investments – both financial and organisational.

Intranet site analytics and usability tests are useful to highlight the improvements needed and they provide input to the case for new investment.  But they do not in themselves justify the investments necessary.  For that you need to show strong connections between the to-be-delivered functionality and content, and the business improvements (and their tangible benefits).

Further research highlighted that three quarters of senior management surveyed view return on investment (ROI) as important but only 6% measured the business impacts after the implementations.  So to ensure that RoI is achieved as per business case, you need to identify the metrics you will use, baseline them before the project starts and measure them after the intranet (or the set of enhancements) has been implemented, deployed, bedded in and has become business as usual.

As you may imagine, this is easier to say than do.  But it is doable – providing you select suitable and measurable metrics that make sense to you and the approvers of your business case.  The paper I presented at the Summit provides some guidance and examples you may find useful.

Done well, the business case will gain good support and you will be justifiably confident that the intranet will deliver the business value expected.  Done poorly and the project may not be approved.  Red faces all around.

If this post has been useful to you, or if you want to know more, please let us know.  And if you need help with any of this, give us a call!

Posted by: Steve Lapwood, Senior Management Consultant | 04 October 2010

Tags: ROI, Intranets

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