This website covers knowledge management, personal effectiveness, theory of constraints, amongst other topics. Opinions expressed here are strictly those of the owner, Jack Vinson, and those of the commenters.

Stop thinking ROI, think success

Many people in knowledge management and social media have expressed frustration in defining return-on-investment or payback for implementing one of these projects.  Some people (Luis) suggest that there is no point in defining the ROI -- at least not in the way it is traditionally done.

It is the nature of default ROI calculations.  They go along these lines: "If we implement A, costing Z, we will gain Y.  Thus ROI = Y/Z."  (An alternate version looks at how fast one recoups their investment.) 

The problem is that the technology doesn't provide the return.  It is the use of the technology in the business setting - the setting of humans interacting toward some common goal - that creates the return.  If the change being proposed doesn't help the people reach their goals (better, faster, differently), the return cannot happen. 

To make this goal, do you think it will be the technology that will get you there?  Then why do we keep asking for ROI of the technology?  And why do we claim that the technology fails when all the surrounding systems and processes aren't updated to account for the needed changes.  If you implement a wiki and still need ten layers of approval, NOTHING is going to change (other than annoyed 2.0 early adopters). 

The real measure of "return" is whether the whole project is successful and you are able to meet your goals, whether those are financial or speed or something else.

A recent commenter on this article and a bunch of other discussion has inspired me.  And this has come up in the past a number of times (reviewing my own blog).  Vivian Kaye wrote about it in 2006 and I wrote in response.  Thanks to my network!

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