IT leaders planning to introduce or extend a collaboration and social software initiative may well need a more compelling business case to present to business leaders, according to Gartner.
The analyst firm has identified eight steps to help gain approval for investment in such initiatives. They involve via dialogue with business leaders and increasing the commitment of stakeholders.
Step 1: Identify stakeholders, define responsibilities and agree processes
Collaboration with stakeholders from business and finance units will continue throughout the initiative, and each stakeholder will perform different tasks. As social software initiatives don't always start in the IT organisation, the initial driver for the initiative may come from another area of the business.
At this stage, the IT leader and other stakeholders should formulate the initiative's overall strategic vision and objectives, and link these to other strategic business objectives, such as those in the organisation's annual report or statements created by the CEO or other board members.
>See also: How to become a social enterprise
Step 2: Select metrics that link the initiative to relevant business areas
The challenge in this part of the process is to align the objectives typically associated with a collaboration and social software initiative — such as improving internal communications, enhancing teamwork and improving knowledge capture and reuse — with relevant business areas and business performance metrics from the GBVM.
Existing metrics can be used if an organisation already measures similar business metrics to those in the GBVM, or new ones can be introduced if none of the metrics in the value model are appropriate.
Step 3: Measure current performance to establish a baseline
Once the business metrics have been selected, the business stakeholders must measure current performance levels, before the initiative starts. Gartner recommends that they use the average performance for each metric over the past 12 months as a baseline from which to measure expected improvements.
If no relevant data exists to establish a baseline for each metric, the business stakeholders could monitor and measure existing activities to establish one.
Step 4: Describe how solution capabilities are likely to affect metrics
The IT leader needs to describe how the new initiative will deliver measurable business outcomes. This description should include comments about the relationship between people and processes, as well as technology.
It should form the basis of a deeper understanding of the interplay between people, process and technology in the proposed solution and in the context of a specific business activity.
Step 5: Negotiate realistic targets for improved business outcomes
Having established metrics, current baselines and causal-chain descriptions, the next step is to agree with the business stakeholders realistic expectations for improvements to each metric as a result of implementing the proposed solution.
>See also: The rise of the customer-centric enterprise
Step 6: Estimate the financial impact of planned improvements
The finance stakeholder must work out what the agreed targeted improvements will mean in financial terms using predefined formulas that link metrics to financial performance.
Step 7: Determine the total cost of ownership
The total cost of ownership (TCO) can be calculated by adding up all the direct and indirect costs of the collaboration and social software initiative. These include costs relating to software licenses and maintenance, personnel costs, service costs and operational costs over the useful lifetime of the initiative.
Step 8: Calculate ROI
The finance stakeholder should calculate the initiative's ROI based on the previously calculated financial impact of the negotiated improvements and on the TCO calculations.
