I attended a lively conversation among consultants at a roundtable event this week where there were widely varying opinions about the need to discuss tangible ROI (return on investment) for consulting projects. I didn't say so in the discussion, but I have yet to get a request from a customer to present an ROI analysis for a proposed SharePoint initiative. I'm thinking these are some possible reasons:
- The customer already has an approved project budget, and don't need this justification (i.e., the work has already been done, at some level, elsewhere).
- The technology is so popular that companies feel like they "must have" it in order to keep up, and don't do any quantitative analysis of its value.
- The first wave of SharePoint 2007 (MOSS and WSS) buyers are technology buyers, not used to doing this type of analysis.
- The market has been good enough (in macro-economic terms) that people have money to spend without requiring a quantitative justification.
I'm not saying that it's wrong, just surprising to me. As a former CPA, and one who worked in the field of selling and implementing Enterprise Resource Planning (financial) systems for several years, I was used to a customer/audience of CFOs who routinely requested this type of information, so the last few years have been rather a pleasant surprise and a different type of conversation.
Another theory I'm considering is that maybe the wisest customers who are deploying collaboration and knowledge management technologies (in particular) realize that the "hard" value is incredibly difficult to measure because the small, incremental gains in productivity by individual users are so distributed.
A phenomenon we've also seen in practice is that SharePoint is so broad and versatile a platform that users frequently adopt it (and drive lots of value) in ways that were never anticipated when the initial SharePoint initiative was envisioned and undertaken -- the viral effects of SharePoint adoption within an organization would be a great topic for a future post.
I'm sure the business analysis will get more rigorous as the technology matures, and I'm ready -- I have tools for measuring information worker productivity and quantifying ROI based on it, but as I have been told many times by my more quantitative brethren: the beauty is in the assumptions (the quant version of "God is in the details.")
There are some good sessions at the Babson CIMS on Information Technology ROI, and Microsoft has invested significantly in their REJ (Rapid Economic Justification) model. Most useful of all, I recently found a brilliant set of articles discussing ROI specifically in the context of SharePoint. Entitled "Learn to Talk to Your CFO," it's a really good idea for technical management, and a worthwhile read.
Comments