Enterprise social networking tools' ROI tough to define

Tying a dollar value to enterprise social networking tools can be difficult. Look for broader benefits, such as productivity and knowledge exchange.

Whether your company has implemented an enterprise social network (ESN) or is contemplating one, it will ultimately face two key questions: "Do ESNs work?" followed swiftly by "How can you tell?"

The answers to these questions are not always easy to discern. Enterprise social networks are designed to connect employees with one another at work, much like Facebook and Twitter connect people outside of it. ESNs can foster increased communication and collaboration, which is particularly helpful for employees spread among various departments and locations. But outside of anecdotal examples, organizations are finding that it is hard to pinpoint quantitative data that indicates an ESN has a return on investment (ROI).

Jacob Morgan, principal and founder of Chess Media Group, a management consulting and strategic advisory firm that focuses on collaboration, says that it is difficult to apply financial measurements to determine the worth of an ESN.

Organizations are finding it hard to pinpoint quantitative data that indicates an ESN has ROI.

"Let's say that the two of us work together on a $1 million project [and use ESN]. Can we say we made $1 million? No," Morgan said. Instead, he advised, it is more reasonable to look at the overall business and determine the kinds of problems the ESN is solving. Regardless of the availability of quantitative data, Morgan said that ESNs are the best way to connect an organization, strengthening it by allowing employees access to one another as well as to information.

ESN tools tied to business processes

Chris Plescia, IT leader-of collaboration at Nationwide, said that the Columbus, Ohio-based company began using a social tool as an experiment in 2008. But in June 2011, Nationwide began using an ESN in earnest. Using SharePoint and Yammer, Nationwide started with the collaborative tools the social environment offered, but quickly began to tie it to business processes to make work more efficient.

"We integrated the social network into our document environment," Plescia explained, allowing employees to collaborate on documents. "Then we linked it all by search," which let employees seek any information written or discussed on a particular topic, Plescia said. This own internal hub is called spot as in, the one spot to go to find anything, Plescia said.

But does it work? They may not have ROI numbers, but Plescia said that Nationwide analysts evaluate multiple metrics to determine whether it does. They look at the engagement level. Engagement here means not just how many of the company's 35,000 employees have joined the system, but the quality of the engagement. What percentage of users only lurk or read? How many actively engage by liking a response or asking or answering a question on a weekly or monthly basis? How long does it take for a question asked on an ESN to receive an answer, and by how many responders? These kinds of criteria, Plescia said, indicate whether employees find ESN tools useful.

Dan Pontefract, who is the senior director and head of learning and collaboration at Telus, a Canadian communications company, said that his company of 40,000 uses its enterprise social networking tools to drive collaboration and social into all facets of the business process.

"We thought of this as a way to imbed this in the learning and leadership ecosystem[s]," he said. "Culture is our competitive advantage, and social is our enabler," he explained.

Recently, for example, Telus wanted to improve customer service by first defining what its customer promises should be. Rather than taking a top-down approach, Telus conducted a six-month exercise within the organization to crowdsource, inviting 1,200 ideas from employees. Through a voting and blogging campaign, the organization narrowed the suggestions down to four.

Like Nationwide, Telus monitors employee usage of its ESN, periodically surveying employees and asking them how satisfied they are with the system and whether using it has enhanced their jobs. In a recent survey, 74% of employees said they believed it had, up from 62% in the previous survey.

To measure the effectiveness of an organization's ESN, the analysis must be tied to what an individual organization wants to accomplish in the first place, emphasized Morgan. While ESN tools' ROI may be tough to define, an organization can measure the success of a goal to respond to a customer faster or to create more accurate feedback. It may look at instances of collaboration leading to an innovative solution, or an increase in quality conversation across the organization.

"You can tell if it's solving a problem," Morgan said. "Define what success looks like for your organization. There is no golden measurement for all," he said.

This was first published in August 2013

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