The fundamentals needed for basic survival. The needs then climb the pyramid, becoming more intangible as one goes along: safety, love/belonging, esteem, self-actualisation, variety.
The theory's structure of moving from tangible/tactical needs to those that are intangible and more impactful is used here to examine the software decision-maker inside modern companies.
Maslow’s Hierarchy of Enterprise 2.0 ROI
The decision to purchase an enterprise software application is one that generally demands a variety of different views about benefits. Because with most enterprise systems - Enterprise 2.0 included - there are a variety of benefits:
Cost Savings
Saving money is one of the easier ways for an enterprise decision-maker to justify an investment.
The savings can more than offset the costs of a enterprise system. This correlates to Maslow's original hierarchy of physiological needs. The dollars saved cover the cost to purchase.
Saving money occurs in multiple ways when it comes to software. While a traditional measure is that the new application replaces a more expensive one, that's a benefit that doesn't scale.
A stronger benefit is one which opens up a pipeline of new cost-cutting and operational efficiency measures.
You've covered the lowest level ROI needs with this one, the benefit that is easiest to see and measure. The importance of this should not be underestimated. However, it's also the benefit with the lowest impact on the organization.
Revenue Generation
Next rung up the ROI hierarchy is creating new revenue. In this case, the benefit is more localized to new products and services, as opposed to entirely markets. Increasing the top line is great for the social software ROI calculation. It's not surprising to see the social CRM space heating up.
Getting ideas from employees and customers that lead to new revenue-generating products is a solid business case for Enterprise 2.0. Employees have ideas, but have lacked effective means of making them known to a wider audience.
Customers have great ideas, and provide great direction for new products. They also love to hear about your new product concepts, and will gladly offer feedback.
The reason revenue generation is above cost-cutting is that there is an increased level of uncertainty as to how the revenue will come about, from which idea. Still, this is a solid level that deeply satisfies the ROI needs of companies.
Customer Satisfaction
Happy customers. What every great company wants and continually works for. Anyone with experience on the "front lines" of a company understands the importance of this. Enterprise 2.0 platforms that help companies find ways to increase customer satisfaction hit on an important need for companies.
Having customers suggest their ideas is a valuable approach to improving products and ideas. With an eye toward higher satisfaction and lower churn.
There's also a new factor emerging: social media. Customers who are unhappy can create publicity problems for companies. Companies should factor in the power that social influence has in total Customer Value.
The other value of engaging customers is that while their ideas may be incremental, there may be patterns companies can pick up in what the customers are proposing. In other words, look beyond the tactical feature or service idea, and see what the customer really wants from your service offering.
This benefit scales well, and is of high value to companies. It does have a softer ROI story, however.
Employee Satisfaction
Enterprise 2.0 has more highly engaged and connected employees at its core. The ability to make a more substantive impact. The ability to find that right person to help with an idea or project.
The aha moments of discovering information you need. Making connections with people who see the possibilities you do. The ability to carve out a basis for recognition more broadly than has been available previously.
All of these relate to the issue of more satisfied employees. Now a social software application cannot on its own get you there. But it can play an important role in making that goal a reality. In Ideas Are Core to Enterprise 2.0, four elements of ideas are identified relating to higher employee engagement:
1. Ideas are me
2. Ideas Are the Basis for Finding Like-Minded Colleagues
3. Ideas Are Social Objects
4. Ideas Become Projects
Now the benefit of employee satisfaction is moving higher up the pyramid. Which means its measurability is limited. But it also means its impact is higher.
Cross-Organisation Collaboration
An important objective of companies to getting employees to work together. It's not enough to have the expertise and experience resident in employees. People need to work together to achieve the various objectives of a company.
Cross-organization collaboration does three things:
1.Improves outcomes as a diversity of knowledge and perspectives are brought to bear
2.Strengthen bonds for the next initiative an employee works on
3.Reduces cases of duplicative efforts and unnecessarily starting from scratch
As has been discussed here previously, people with access to a wider range of viewpoints consistently produce higher quality ideas. That only happens when the full intellectual power of employees can be tapped through collaborative networks.
There is a tremendous opportunity for organisations to help their employees increase the closer ties and extract much more value from those who are more distant, away from one's strong ties. Because for most workers, those distant connections are practically non-existent.
We're getting pretty high up on Maslow's ROI Hierarchy. The previous level of employee satisfaction was more emotional. This level weaves in intellectual benefits as well.
Innovation Culture
Innovations that arise from a social software initiative can be measured; indeed they are the most tangible ROI of Enterprise 2.0.
Ideas that are discovered and turned into action have produce an economic return of business value. Where we are finding it tougher to quantify is, determining improvements in team collaboration, communication, individual productivity and the softer side of enterprise 2.0.
It's harder to measure; how deep is a company's innovation culture? This is a culture where the nine principles of innovation management flourish inside an organisation:
1. Innovation benefits from a range of perspectives
2. Four of the most damaging words an employee can say: "Aww, forget about it".
3. Allow some freedom to try things that don't work
4. Create a culture of constant choices
5. Looking at innovation as a discipline
6. Focus employees' innovation priorities
7. Recognize innovation as a funnel with valuable leaks
8. Establish a common platform for innovation
9. Innovation must be more than purely emergent, disorganised and viral
What is the value of creating a sustainable innovation culture - as opposed to a series of one-off innovations? Recent reports tell us that companies that are the innovation leaders in their industries generate 430 basis points more in shareholder returns than do average companies.
We're talking culture here, so it's a soft ROI discussion but the end-results are quite measurable and powerful for this part of Maslow's ROI Hierarchy. Combined with executive commitment, strong incentives and a can-do attitude, social software becomes a critical tool for helping companies achieve an innovation culture.
Organisational Agility
This is the equivalent of self-actualisation, the top of Maslow's needs hierarchy. Companies that have achieved the other benefits, both hard and soft, will find they have a much higher level of organisational agility. Including:
• Seeing changes in the market faster
• Shifting resources in response to new opportunities
• Mixing incremental and disruptive innovation
• Moving on from initiatives, programs,markets, products that no longer work
• Employees can recognise opportunities and threats themselves, and act accordingly
Posts
No comments:
Post a Comment