If I Invest in Collaboration Technologies, What Can I Expect My Return To Be?

This is a question that gets asked a lot by executives.  Many companies are struggling not only with “what” to do in their collaboration strategies but “how much” and what is the return on investment if they invest in new technology.

To help us answer this question, we turned to Ron Ricci and Carl Wiesse and their book.  The Collaborative Imperative – Executive Strategies for Unlocking Your Organization’s True Potential

They begin by identifying 3 areas of benefit;

  1. Operational ROI impacts expenditures on such items as cutting travel, reducing infrastructure needs or lowering bandwidth requirements.
  2. Productivity ROI are improvements in efficiencies, reduced decision making cycles or optimized matching of resources to opportunities.
  3. Strategic ROI, although the hardest to measure offers the greatest potential for a business to transform itself in significant ways to create highly differentiated levels of value or giant leaps in customer satisfaction and loyalty.

Ricci and Wiese outline significant returns for those that simply apply a basic effort of collaboration enhancement, and multiples of that for companies that put more effort forward.

You get out what you put into it.

  • Basic Collaborators enjoyed a 280% Return on Investment
  • Intermediate Collaborators received a 360% ROI
  • Advanced Collaborators enjoyed 610% ROI.

Looking at Return on Collaboration by Industry and measuring for Average Payback in Months and Five Year ROIs they found a range of between 40 months and 120% for the Retail industry upwards to 21 months payback and a 204% 5 Year ROI for the High Tech sector. Further the study found that favorable ROIs were experienced regardless of global location and that the average payback took place within a couple of years.3D business chart

When looking at companies in terms of size, they found that the larger the company the better the return. The payback in months ranged from 27 to 37 months with a 5 Year ROI range of between 99% and 173%. Companies with between 1,000 and 25,000 staff experienced the best results.

Looking within the organization as to which departments benefited the most from collaboration investments, they found that the best returns came where the largest numbers of people interact to produce value. The more interactions required to make good decisions, the greater the opportunity to benefit from increased collaboration.

The big departmental winners included;

  • R&D
  • Sales
  • Marketing
  • Investor Relations
  • Public Relations.

Where companies once found high ROI in process and quality improvements, those strategies are largely well established and in place. We are now finding those high return opportunities in the realm of enhanced collaborative interactions between people.

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