Many proposals for social business initiatives have been greeted with responses of “where’s the ROI?” from sceptics. But this is a somewhat simplistic argument to have. Yes, it is hard to measure the ROI of a vague proposal to “become a social business” or “connect with our employees”. But such poorly-defined projects are likely to fail anyway. Successful social business projects typically have more precise objectives.
For example, a company that has identified poor communication between sales and marketing teams as causing operational errors and inefficiencies might implement an enterprise social network to enable information sharing between these two departments. In theory, the success of a project like this should be easier to measure – the original premise was that communication was poor, so the same measurement criteria could be applied to assess the improvements a social network has delivered. But of course, in many cases, that initial premise of “poor communication” was a subjective assessment made without appropriate data. So it’s rather unfair to complain that a social business initiative can’t show measurable improvement to something you don’t measure anyway.
It is important to remember that social business projects should be a means to an end, not an end in themselves. Our goal is better communication and collaboration between a company and its customers, between a company and its business partners, and between employees of the company, and in turn to improve the overall performance of the company. Enterprise social networks are a means of reaching that goal. So the the way we measure the effectiveness of these projects depends on the way we measure the business processes involved.
My favourite example of this comes from John Hagel of the Deloitte Center for the Edge. At the Enterprise 2.0 Conference in November 2011 he described how the agency that runs the bus services in a large US city had initially been interested in starting to use social software by creating a Facebook page for its passengers. But taking a step back and considering where social software could have most impact, it became clear that the biggest problem they faced was the time it took to repair an ageing fleet of buses. A major cause of this was the difficulty in finding parts from elsewhere in the organisation, because there was little exchange of information between distributed maintenance teams. So it was identified that social software could have a positive impact on the city’s finances by enabling better sharing of maintenance information and parts availability.
The video of John Hagel describing this is well worth watching to understand the way the relevance of social business to the organisation was analysed, and the right application identified. Once this sort of logic is applied, finding the right metrics becomes much easier. In this example, it’s the time taken to get buses back on the road, not the usual (and somewhat meaningless) count of likes, shares and retweets.
This highlights the importance of choosing both the right business processes to apply social software to, and selecting the relevant data with which to measure their success. Enterprise social networks generate a huge amount of valuable data, and I have often presented a list of “10 things you should measure during your enterprise social network adoption” (see graphic). But not all of these metrics are directly linked to every business objective for a social networking project. It requires an understanding of both the business process and the social network usage to be combined to deliver meaningful analysis.
For example, returning to John Hagel’s bus maintenance story, we might want to examine how network participation from each maintenance team correlates with repair times. While data scientists will remind you that correlation does not imply causation, establishing a link between social network activity and real-world business metrics goes a long way to justifying the social business investment.
You may very well think that this sounds a lot more complicated than just measuring how many people reshare or like your content, and of course it is. It is something of a cliche to say that it’s hard to measure the return on investment of social business projects, but what this is really doing is exposing that these projects have not defined their relationship to important existing business metrics.
As this series has said many times already, for social business projects to succeed, they need to link to real work. Once this link is clear, measuring success is much less of a mystery than sceptics suggest.