Archive for ‘business intelligence’

September 30, 2010

Why is measuring a hard ROI for SharePoint just so hard?


Traditionally when it comes to implementing technology, the financial bean counters and decision makers have looked for hard dollars for the ROI of a technology investment. However, when it comes to SharePoint, it seems we have thrown a hard ROI out the window. In a manufacturing or factory environment, it’s generally easy to measure hard dollar costs of raw materials or labor costs or costs per hour. Centuries of economic theory and practice led to the pioneering of the “scientific method” in the early part of the 20th century by Frederick Taylor and Henry Ford among others. Implement “robot X” into the assembly line and produce more widgets and save on labor costs. We have also had a few decades of TQM (total quality management) which has evolved into many buzzwords all seeking efficiencies in productivity of manufacturing and supply chains. In Business School, I remember learning all kinds of management theory on these subjects and “generally accepted accounting principles” to calculate hard dollar costs and manage budgets to actual as well as profitability of goods sold. So what happened to measuring ROI of SharePoint and why isn’t there enough written on it?

I have read tons of articles on web 2.0, collaboration, and SharePoint. They evangelize about grand topics like innovation and creating opportunities through communities and connecting people through social sites. Some talk about the vision of enterprise content management being realized at an enterprise level. And some articles even try to address ROI and talk about the “downstream effects” of capturing ideas and information in blogs or wikis. Then we hear from executives and decision makers that evangelizing the technology sounds great, but all the benefits are “soft” and too hard to measure. Okay, so why not measure “soft costs”?

The reality is that all businesses have soft costs such as turnover, lost productivity, low morale, lost sales and missed opportunities. And any combination of those might drive soft cost dollars in your organization which can have big impact on your bottom line — sometimes just as much as the hard costs and other times even more. Many organizations simply don’t measure these types of costs because they don’t understand it or simply don’t have the capability to measure them. Or perhaps people are just focused on meeting deadlines without questioning the value or impact to the customer. Meanwhile, project management within many organizations seems like chaos, deadlines get missed, decisions are delayed, tiger teams get formed, and the insanity of our day to day work life continues. Projects that should take only a few weeks or a few months, takes 12 or 18 months to complete and quality suffers as does employee morale. You continue to wonder why things in your organization aren’t as easy as what we see on Google or Facebook. Then we recharge on the weekend, read the Dilbert cartoon in the Sunday paper, laugh and think of our own work environments, and do it all over again next week. All the while we continue to email each other on our smart phones and at best upload documents to a site on SharePoint. And if you’re paying attention, there are no doubt hidden costs in many of the things just mentioned.

In today’s economic climate, it’s time we take a hard look at dollars and sense and focus on driving analytics from a collaboration & information management platform like SharePoint. In my next series of blog entries, I’m going to focus on making measuring a hard ROI less hard and relate it specifically to real solutions implemented on SharePoint.

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August 19, 2010

Is it Knowledge Management or Business Intelligence?


I was recently speaking with someone whose background was all in business intelligence and data.   They had years of experience building data warehouses and datamarts.  They knew how to create cubes of data and slice and dice and store and manage all the financial and customer data you could imagine.  Because this person was from the “structured data” world, they just couldn’t wrap their arms around the concept of knowledge management.  And we began a lengthy conversation about this abstract concept of knowledge management (KM).

Knowledge management — the buzzword of decades past that might be synonymous with other buzzwords like collective intelligence or intellectual capital.  Or maybe you’ve heard of tacit and explicit knowledge — differentiating between what is in our heads vs what’s written down.  From a technology perspective, KM represents the mounds of documents, information, conversations, blogs, wikis, emails, social networks, knowhow, and expertise …. it’s all the “stuff” that continues to overload us daily and continues to present challenges for individuals and organizations in filtering out what is important vs. what is just noise.   KM is also about the way we create, collect, manage, consume, share, and leverage the unstructured information combined with the structured data my colleague was so familiar with.  It’s about learning, learning curves, and reuse – be it structured or social or organizational.   And KM can be also be about talent, innovation, revenue and costs as well…

Ultimately, KM is about individual, group, and business performance and providing a competitive advantage.  KM is also about adapting to change and managing it as the more you or an organization knows, the better decisions it can make and quickly recognize the need to change, adapt, and drive innovation.

As I explained and defined KM to my colleague and what this abstract buzzword KM is really about…he then said to me:   “Rich, it sounds exactly like what I’ve been doing for the last 2 decades with business intelligence… figuring out ways to collect, organize, structure, and mine data to help businesses make better decisions”.    And the reality is my colleague was right.   BI has many parallels to KM… and at the end of the day it’s all about being able to filter out the noise, identify all the variables in the equation, and make the right decisions based on what you know and assume to be true — be it structured or unstructured.

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