The Intranet Business Case (Intranet ROI)
The need for accountability and for clear measures of success is increasingly demanded for all corporate expenditures, including intranets. If you are responsible for an intranet, you need to know how build a business case and develop a return on investment (ROI) strategy.
Our intranet consultants can take you through the steps in adding value and measuring ROI for all your internal websites.
Intranets and corporate portals are expensive endeavors. Despite the expense, many organizations understand the implicit and/or explicit value. Intranets are widely valued for:
Streamlining business processes and driving operational efficiencies
Significantly reducing cost of internal business functions
Enhancing communications and collaboration between employees, managers, suppliers and partners
As with any critical business system, an intranet or portal must be delivering measurable performance and remain accountable to the investment. If the site’s value is not being measured, then it risks failing the needs and demands of employees and management.
When asked how executives determine whether an intranet or portal is delivering value, they typically point to reducing costs and improving productivity.
Of course, IT budgets are increasingly tied to company-wide business and strategic initiatives. The cost justification for any expenditure, including IT must have a clear bottom line that answers the question, “What’s the payback?”
In recent years, business challenges and subsequent solutions/applications have been the driving force behind intranet investments. They will continue to play this role in the future.
Executives will make investments in intranets and portals (see defining in the adjacent glossary) if such investments spur growth, cut the cost of operations, and/or help enhance the customer experience (retaining and building the customer base).
The challenging economic climate of the past few years means that more and more organizations will allocate dollars to IT systems and applications that can demonstrate a measured solution and ROI to a business problem or provide enhanced service and growth.
Of the respondents to the Prescient Digital Media ROI survey that undertake ‘rough estimates’ of their organization’s intranet, answers varied from $0 to $20M. The average annual ROI of respondent intranets fell just shy of $1 million ($979,775.58).
While less than 20% of organizations have measured specific benefits, a majority of organizations have at the very least made a ‘rough estimate’ or guess of the value of their ROI.
While only a handful of technology companies measured intranet ROI three years ago, there are encouraging signs of change. A recent study, conducted by Prescient Digital Media Ltd., finds that 6% of organizations undertake ongoing, specific measurement of the ROI of their intranet. Occasional measurement is undertaken by 26% of the respondent organizations.
While extensive ROI measurement has not yet become mandatory at a majority of organizations with intranets, ROI is a priority in 76% of the survey respondents. Rather than attempt to measure the intranet or portal’s entire value, those companies that are successfully gauging value are measuring specific benefits. This paper lists intranet benefits in 10 key categories – including hard costs, increased revenue, etc. – with two supporting categories: content management and procurement.
The precision, scope of work and execution required to build and maintain a successful intranet or portal is massive – from governance to content management, and from technology to business processes. At the heart of a successful intranet is the strength of the underlying plan. Failure to develop an integrated plan that accounts for an organization’s structure, stakeholder, and user requirements will almost certainly ensure failure and, with it, a loss of significant time, money and jobs.
Finally, while appraising the ROI of an intranet or portal is critical for most executives, there exists a great deal of untapped, intangible value that is perhaps even more critical than the measured dollars and cents. When properly deployed, intranets improve communication and collaboration and improve employee satisfaction, which in turn can improve productivity. All benefits are clearly important to any organization, but not always a measurable ROI.
“Three years ago a project had to cost $1million before a comprehensive ROI analysis was required. Last year, CIOview saw that number drop to $250K for Fortune 200 companies. Now ROI studies are common for IT investments of $125K or less. The continual lowering of the threshold for a required ROI analysis clearly is a function of the tough economic times." (Source: Scott McCready, How To Craft An Effective ROI Analysis, A CIOview White Paper, April 2003)
Virtually every line of business and department within an organization can benefit from the power, flexibility and bottom-line value of an intranet. Therefore, they are willing to make notable intranet investments. According to the META Group, more than 85% of Global 2000 companies have implemented or are developing intranets.
Learn How to Measure ROI in Your Organization
Finding ROI: Appraising the Value of Intranet Investments is Version 9.0 of the highly popular white paper on finding, delivering and quantifying the ROI of intranets, portal and content management systems. V5.0 builds on the success and contains much of the same content of the last release, but includes our study findings from our exhaustive study on intranet ROI (the first of its kind), new case studies, benchmarks and new sections on Human Resources and Knowledge Management benefits.
Intranet ROI Workshop ©2013
Prescient Digital Media is offering existing and prospective clients an educational and planning workshop in identifying and measuring the return on investment (ROI) of your corporate intranet. This half-day workshop investigates the value of intranets, different benefit segments, and how leading companies are measuring ROI at their organizations, as well as a hands-on ROI identification exercise that is specific to your organization. A follow-up session assists participants in producing a business case report for ROI initiatives.
Prior to commencement of the workshop, Prescient sends an advance questionnaire to be completed by participants in order to baseline and highlight the general details of your corporate intranet (strategic goals, metrics, number of users, average access speeds, etc.).
We examine your principal intranet site/portal, and other relative intranet sites, and rate and provide recommendations according to seven principal criteria:
Design (look and feel)
Usability (ease of use)
Tools & Innovation
Content Planning & Resources
The evaluation (or gap analysis) scores the strengths and weaknesses for each criterion on a scale of 1-10 (with 10 being ‘superb’). The individual scores are then compiled and the site is given an overall rating. Recommendations for addressing and shoring up gaps and weaknesses are highlighted, and are then used as a basis for identifying ROI opportunities for the intranet/portal.
Following the evaluation, we conduct a three hour workshop on ROI, which begins with an overview presentation on ROI and case studies, and includes a hands-on ROI identification exercise. Using the Intranet ROI Matrix © 2013 developed by Prescient, we work with core members of your team to help you pinpoint areas for measuring the ROI of your existing intranet and/or a future design or plan. Individual team members are asked to pinpoint data in 8-12 key areas required for building a business/ROI case, and are usually given 2-3 weeks to identify and return this data to a designated project manager.
Once the data has been collected, Prescient will work with the project manager and team to build conservative ROI objectives/estimates for inclusion into a concise and compelling business case. The report is intended to serve as the basis for a full business case suitable for submission to your executive team for securing additional funding for intranet development or maintenance.