de-mystifying roi calculation for sharepoint
DESCRIPTION
ROI is a "fancy" acronym for Return on Investment. While ROI implies success, it usually involves mysterious mathematical formulas that many people can't see or understand. So how does an everyday SharePoint business owner tackle the ROI puzzle? Do you just "flip the switch" on your implementation and move on? Or are you so busy with post-launch support that you don't have time to circle back and quantify your results? This session will help you demonstrate the business value for your SharePoint implementation. We'll examine common ROI calculation methodologies while providing strategies for identifying your ROI niche and quantifying the business value of your SharePoint implementation.TRANSCRIPT
Sarah Haase, The SharePoint Librarian@sarahhaasehttp://sarahlhaase.wordpress.com/
De-Mystifying ROI Calculation for SharePoint
Collaboration & Search EngineerTechnical writerCMS/KM implementation & supportInformation architectLibrarianUser adoption enthusiastCode-free SharePoint solution builderAuthor
Proc
ess
optim
izati
on
• Reduce email dependency
• Provide just-in-time information
• Build automated workflow processes
Info
rmati
on a
rchi
tect
ure
• Focus on structured data
• Incorporate taxonomies for efficient retrieval
• Focus on lists, not libraries
Com
mun
ity d
evel
opm
ent • Leverage all
knowledge assets
• Build tools people want to use
• Folksonomies (tagging for the masses)
Businesses shouldn’t be run via spreadsheets stored on shared drives.
Left to their own devices, well-intentioned people will live in information chaos.
Your SharePoint solution isn’t complete until you’ve measured its effectiveness.
ROI is meaningless without context.
Agenda
• What is ROI?• What does good ROI look like?• Units of measure & common methodologies• Building your valuation roadmap
What is ROI?
ROI is…
• A cool acronym• A method of quantifying benefits reaped• A way to “feel good” about an investment• A way to offset opportunity costs• A method for validating good decisions• An afterthought
TYPICAL measurements
Successful upgrade Business adoption Number of sites and site collections
Business relianceSpace consumption
Percentage of “business critical”
docs stored in SharePoint
Shortened business
processes
Quantifiable drop in user
confusion
Quantifiable drop in
“hunting” time
Successful replacement of legacy systems
Use in place of expensive
alternatives
Actual dollar savings
BETTER measurements
The hard part is…people don’t understand how to make the leap in their organization
Money-Increased revenue-Eliminated tools-Increased productivity-Lowered overhead per sale
Emotional -Improved employee morale-Elimination of unpopular tasks-Reduced user confusion-Happier customers
Time -Streamlined business processes-Just-in-time (JIT) information-Less rework-Faster time-to-market
Evolution of work-Ability to focus on higher-value tasks-More automation, fewer mistakes-Simplify the “hairball”-Reduce employee turnover
Quantitative ROI Qualitative ROI
For most for-profit companies, cash is king. In some cases, SharePoint may (in and of itself) be a revenue stream. But for many of us, SharePoint represents “soft money”—aka money that we can avoid spending on a variety of other tools. Or money we can save by lowering our overhead costs and decreasing our time-to-market.
Tool elimination example
• “Proof of concept”– Speed to Market– Low / No Cost– Leveraged existing platform– Minimal infrastructure cost– Leverage existing resources– Quick to deploy & modify
New Applica-tion
Sharepoint$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
Expenditure
TIME savings
Base formula
Time to complete 1 iteration
# of iterations
Hourly $$$ rate
Process cost
Base formula
Time to complete 1 iteration
# of iterations
Hourly $$$ rate
Process cost
4 hours 52 times/year $50/hour $10,400x x =15 minutes $650
“Before” process
cost
“After” process
cost
Cost savings (ROI)
Evolution of work & Emotional ROI
Key “emotional” factors
• Push content to the right people at the right time• Eliminate the “soul crushing” work• Don’t make them have 45 windows open at once• Make your employees & customers happy• Personal measure of “What’s in it for me?”• Ability to focus on higher value-add tasks• Don’t take it away!
SharePoint usage
metrics
User stories
Surveys
Interviews
Serious anecdotes
- Sue HanleyA Practical Framework for SharePoint Metrics
http://www.susanhanley.com/white-papers.htm
Step 1: Find what is needed
• Ask questions:– What do we value?– How do we work? (aka how formal are we?)– What matters to management?– What does “good” look like?– How do we talk about our successes & failures?
• Find examples of success and backtrack
Step 2: Plant your stake
Pick a focus area
Define your role
Determine training needs Garner support
Build a timeline & plan
for delivery
Define checkpoints on
your route
Step 3: Take baseline measurements
Step 4: Define success criterion
From the general To the specific
Reduce duplicate storage of content Eliminate 15GB in duplicated storage within 6 months
Reduce time it takes to complete a business process Reduce weekly overhead of XXX process by 15%
Generate value Generate $250,000 in BPR savings within 1 year
Step 5: Calculate your ROI
• Be consistent• Answer the “What’s in it for me?” question• Phrase your success in real $$$• Unite quantitative & qualitative metrics for a richer experience• Add up all the ROI for every project• Think about your delivery mechanism
Step 6: Spread the word
• Money talks• Build your elevator speech• Partner, don’t conquer• Don’t forget the higher-ups
Sarah Haase,The SharePoint Librarian @sarahhaasehttp://sarahlhaase.wordpress.com/[email protected]