ZDnet's Dion Hinchcliffe has a good (longish) post up considering the difficulties of determining the ROI of Enterprise 2.0. This is a good counter-point balancing my post least week title Enterprise 2.0 Reality Check, where I discussed some of the realities facing IT managers and CIOs faced with the ascendancy of these new technologies and philosophies in their shops.
The basic argument, which is one we have heard before, is that these are emergent systems, able to improve efficiency in ways which are heretofore unknown or unimaginable… that they solve problems we didn't even know we had. These are real systems (think the wheel… fire… electricity) and have the potential to dramatically change the status quo of business as we know it.
But emergent systems may only be obvious in retrospect, and even when their appearance is obvious, their best uses may not be (think of the radionics fad sparked by the upsurge in electrical distribution in the early 1900s). Part of the price of sorting through the potential uses to find those which are truly beneficial is dealing with this period of uncertainty.
This uncertainty is what is plaguing Enterprise 2.0 advocates at the moment, and Hinchcliffe identifies three factors that are preventing adoption: a wariness of magical snake-oil claims (radionics!) as to the efficacy and applicability of the technologies, corporate cultural issues, and a lack of easily quantifiable ROI cases.
This tracks closely with my impressions from the CIO Forum here in Seattle last week, although I come away from that more optimistic about the plans and intentions of CIOs and IT managers than Hinchcliffe seems to be. I also took away the idea that most CIOs and IT managers are accustomed to situations in which ROI is difficult to determine. What I don't think is that this should provide carte blanche to forge ahead under the assumption that blurry networking effects will somehow magically result in beneficial uses.
The idea that networking, communications, and information sharing can have positive impacts on business is not in dispute. But the specific mechanism which are used to achieve those ends deserve deeper inspection and more skepticism than many proponents advocate, and the reasons should be obvious. Hinchcliffe uses the example of e-mail as a technology which can "…tend to be indirect and create value only after traveling through an indirect chain of cause and effect to enable a positive business outcome." But think about the enormous assumption in that statement: that e-mail actually does enable a positive business outcome, or even that it simply does so more efficiently than the alternatives. Really?
I personally consider e-mail to be one of the best examples of why you do need to build an ROI case for new technologies, even those which seem to have "obvious" advantages which are nonetheless difficult to quantify. I've never been able to do a study (it takes an exceptional executive to commission a study of a decision to which they have already committed) but I have certainly worked with organizations in which e-mail has every appearance of costing far more than it contributes. Yet it has become entrenched and ironically, this has become one of the arguments used against implementing the social media tools which comprise a good portion of the Enterprise 2.0 toolset… what do we need that for, we've already got e-mail!
This scenario should illustrate exactly why you need to build ROI cases, no matter how complicated the effort, because not knowing and allowing assumptions to govern your decision making doesn't just mean that some technology of questionable value might be adopted, but that it might also actively block better solutions, which also only have assumptive value. If you can't quantify either of these potential information distribution mechanisms, how can you evaluate them comparatively? How do you displace my Sharepoint site with your wiki, or my traditional e-mail with your micro-messaging service, if you can't show the value of either?
To be clear, Hinchcliffe is only pointing out that the difficulty of building traditional ROI cases is holding up Enterprise 2.0 adoption (although several people he links to appear to actively object to such efforts), but the implication is that this is a bad thing. I'm not so certain. I'd like to see a lot of traditional assumptions questioned regarding the adoption of technology, and I think this is an excellent time to do it. I actually believe that many Enterprise 2.0 technologies ARE more efficient solutions than the old standbys, but unless both the old and new are closely examined and quantified, there's no better argument for them than simple novelty.