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/sarah@splibrarian.onmicrosoft.com