Establishing the ROI of enterprise collaboration systems often proves elusive. IBM engaged Forrester to research the financial impact of implementing the IBM Connections social collaboration platform through conversations with real customers, and came up with some very positive results.
Total Economic Impact for enterprise collaboration
To better understand the benefits, costs, and risks associated with an IBM Connections implementation, Forrester interviewed existing customers with multiple years of experience using both the IBM Connections cloud and on-premises collaboration platforms using a Total Economic Impact framework.
The interview with IBM Connections customers and subsequent financial analysis found that the Representative Organization* experienced the risk-adjusted ROI, benefits, and costs shown below (all in USD):
- Three-year benefits of about $26.5 million; versus,
- Total costs of $10 million; for a,
- Three-year net present value (NPV) of about $16.6 million.
Customers typically shared the following goals and objectives for an investment in IBM's Connections solution:
- Collaborating inside and outside company firewalls;
- Increasing productivity through collaboration between employees globally;
- Accommodating the increase in bring-your-own-device (BYOD) and mobile users who need to easily access and share information;
- Ensuring collaboration infrastructure can be flexible and scalable based on a changing business landscape;
- Having the ability to incorporate usage and real-time analytics into the solution.
The organisations interviewed typically reported quantified benefits in three main areas:
- Increase in end user productivity of 10%;
- Reduction in employee turnover of 5%;
- Reduction in IT operating costs of 20%.
Employee productivity the big driver of ROI
While the reduction in IT operating costs was identified primarily as reductions in data management operating costs, the big savings were more ubiquitous across the business of the organization.
Forrester found that the use of IBM Connections had a direct impact on employee productivity. The Representative Organization indicated that a key benefit from implementing IBM Connections was the increase in productivity for its end user employees who rely on accessing, sharing, and storing information to conduct their daily business activities. This is by far the greatest contributor to the NPV / ROI of implementing Connections.
The costs taken into account in this study were the Representative Organization's initial license and annual subscription fee to IBM for its Connections platform is a monthly charge of US$10 per user. The cost was the United States list price per user for the Connections Cloud for a bundled package that includes email, meetings, profiles, wikis, file sync and sharing, activity streams, and chat features.
The value of specific use cases
The study is necessarily generalised and relies on a series of assumptions which are detailed in the document.
KINSHIP follows an explicit methodology for identifying the ROI for specific use cases for each client. We work with people in their day-to-day jobs and propose in detail how a collaboration solution will help them to be more effective and more efficient. This is then developed into a Strategic Value Map for each process, and aggregated into a total ROI.
We believe that this "social business patterns" approach to overlaying collaboration onto real work to derive the ROI provides the most effective business motivation for implementing solutions such as IBM Connections.
*The "Representative Organization" is a global enterprise headquartered in the US with 30,000 employees and 5,000 contractors worldwide. The Organization purchased IBM Connections license for all of its employees. In three years, 60% of the full-time employees and 30% of the contractors were using multiple features of IBM Connections on a monthly basis.
Download the full report here.