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Stephanie Donahue

Microsoft SharePoint - Proving a Return on Investment

microsoft sharepoint proving roi

Every day I speak to clients about how we can solve their communication and content challenges with Microsoft SharePoint. However, no matter how obvious it is that SharePoint can solve their issues, we still run into scenarios where we hear, “We think your team is great and we love your ideas, but we just don’t have the budget this year.” What do you do when you don’t have a budget? You prove the return on investment of Microsoft SharePoint.

No Budget

The challenging thing -- okay one of the challenging things -- about SharePoint is that it too often starts out in the IT budget because it’s considered company-wide software that everyone uses. In addition to not being allocated as part of everyone’s budget, SharePoint also has the issue of being tough to measure in terms of return on investment (ROI). Those of us who have been around SharePoint long enough know the value of what SharePoint can do, but we struggle to communicate how that translates into real money saved. Being frustrated with the no budget answer, I’ve been racking my brain on what the answer is to showing SharePoint’s true ROI. So, I decided to run through a series of recent scenarios I’ve heard about from clients, friends, and even personal experiences. What has been obvious is that it all comes back to communication. Problems stem from communication issues, and conveniently, SharePoint (and Yammer) fix those communication issues.

The ROI Challenge

You can’t estimate SharePoint ROI, or any content management system, in terms of dollars gained during a more efficient process. People are not a manufacturing plant where stats are kept on how much content or value is derived from a single action from a single person. However, what you can measure is the cost of mistakes. People are human and while some mistakes can be contributed to inexperience or a lapse in judgment, it’s more often related to a lack of communication. In some cases, communication can even overcome inexperience and bad judgment.

Think back through the last time your organization lost money on a deal, a new partnership, or a new product. How would effective communication have changed the situation?

Communication Issues Plague Organizations

Scenario 1: A client has a proposal sent out with unclear terms of engagement with a vendor. This client is now ‘on the hook’ for far more work than they should’ve been. Not to mention the initial projected time-frames for the work are now completely irrelevant. Had this proposal been put through a formal review process where the entire team knew about it (rather than it ‘hiding’ in email and file shares), the ambiguity could’ve been caught. Not simply because of a formal approval process being in place, but because of the visibility of the document to someone who may not be directly involved.

The cost: Extra time negotiating what can be accomplished in the contract, lower profit margin on the work, if there is a profit at all, and potential loss of client due to the possibility of expectations not being met.

Scenario 2: A survey was sent out to all users and the number one complaint was a lack of company-wide communication. Employees did not feel properly informed. This same client doesn’t have the budget for SharePoint this year. So they continue to use a home grown intranet application where a developer must provide announcement updates. This slows the time to share those updates and will likely prevent many from being shared in the first place.

The cost: Unlimited and depends on the organization

What is the cost of the lack of rapid communication across the organization?

  • What is the turnover cost of an employee who doesn’t feel engaged or informed and leaves the organization?
  • What is the cost of waiting on an email response only to find out after the person you’ve been waiting on for 3 days is the wrong person?
  • What is the cost of not properly communicating new safety procedures to field engineers on remote sites? Have you dealt with law suits this year?
  • What about health care benefits to those sitting at headquarters? How much time does HR spend explaining things that could be available in a forum or Q&A section?
  • What about new compliance policies to content managers? Have you been through a painful audit recently?

The visibility provided by the social communication channels provided in SharePoint (and also in Yammer) can transform the way an organization works. The speed at which information is communicated is directly tied to an organizations ability to adjust to rapid changes in the market, to the amount of income that can be generated with the same number of people, and most importantly tied to defining an efficient and effective corporate culture that spans many remote locations.

The next time you are faced with the ‘no budget for SharePoint’ problem, it may be time to start discussing the cost of poor communication. From there you should be able to start defining what your return on investment looks like.

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