Conference Notes

Share2011 – De-Mystifying ROI Calculation for SharePoint (Sarah Haase, Best Buy)

In the penultimate session of Share 2011, Sarah Haase is presenting her second session of the conference – about ROI for SharePoint. Key topics:
– (self-evident truth 1) Your SharePoint solution isn’t complete until you’ve measured its effectiveness.
– (self-evident truth 2) ROI is meaningless without context.
– How do you prove business value?
– ROI – ultimately, it’s a method for validating / quantifying decisions. It can be treated in the wrong way though, with ROI being an after-thought.
– Typical “measures” of ROI – but these can be quite meaningless:
– … “We updated successfully from 2007 to 2010.”
– … “The percentage of business critical documents stored in SharePoint.”
– … “Number of sites and site collections.”
– Better measures:
– … shortened business processes
– … actual dollar savings
– How do you calculate it?
– Sarah has a great grid to show possible ROI measures – splitting between quantitative and qualitative.
– … Money
– … Time
– … Emotional
– … Evolation of Work
– … Identify where you want to focus on the grid.
– For money:
– … An example: We needed to build an idea generation tool. To buy a product to do this, it would cost $800,000. To build it in SharePoint and get it ready, it was $100,000. It’s a pretty easy comparison.
– … A harder example: Get products up on the website faster, therefore get more revenue. One process produced $100,000 extra revenue per year.
– For time:
– … the base formula is: time to complete one iteration X number of iterations X hourly rate = process cost
– … Sarah worked with Finance to get an average hourly rate for the whole of Best Buy.
– … change the process – then do a “before process change cost” comparison to “after process change cost”
– … an example – swapped out an issue reporting process in Excel with a SharePoint site for issue tracking. Annual savings of $135,000 per year.
– For emotional:
– … aim is to have happier SharePoint users.
– … eliminate the “soul crushing” work
– … see Sue Hanley’s white paper on ROI, especially the “don’t take it away” factor.
– … example: one person was spending 75% of their time copying-and-pasting time from emails to the online ticketing system. They did some automation work, and allowed people to submit tickets via a web-based form.
– For evolution of work:
– … Making the firm a better place to work at, etc.
– … example: replace manually created charts and graphs with automated charts in SharePoint with a Google Charting API. Made the reporting real-time.

– How do get moving on ROI?
– (1) find out what is needed – what do you value? What matters to management? What does “good” look like?
– (2) pick a focus area, and a starting point.
– (3) take a baseline measurement.
– (4) define specific success criteria.
– (5) calculate your ROI.
– (6) spread the word.