The ROI from communities and collaboration

Noticing several people start to talk about ROI from communities, social networking and collaboration. Dave Hersh of Jive Software submits:

“I’ve been getting a number of reporters asking about the ROI behind an application like Clearspace lately.
My general response is that it’s a fool’s exercise. Trying to determine
if the savings and revenue increase are worth the expense is like
trying to measure whether the view from atop Everest was worth the
climb — it’s exceedingly hard to measure and it should be painfully

Matthew Lees also has a piece written up on measuring success of online communities. He mentioned in a discussion that a lot of organizations are not asking for serious ROI since there is an executive who in their “gut” believes this is the right thing to do.

Selling to IT organizations for 15+ years I know that most IT folks have been conditioned around documenting the ROI for any project before they purchase it. In fact due to the “willy nilly spending of 2000”, many companies now have a rigirous IT project justification process where any buyer has to submit all this information, and it goes into a committee which decides if they should proceed or not.

I suspect Dave’s has been talking to IT pubs like InfoWorld, Information week etc. whose users demand ROI (which has led to a new magazine in itself – Baseline Magazine). So, my suggestion: if you want to get written up in IT pubs, you ought to have a perspective on where the ROI might be based on previous customer input.

Else you can always target the business teams that need collaboration internally like Customer support team, or Sales engineering team, etc. bypassing the IT folks if you provide a hosted on-demand solution. Then the ROI question is less frequent.

Here are some examples of where ROI might exist for specific collaboration projects in our experience:

1. Sales engineering organization: Reducing time to obtain key information that lies in other SE minds, which reduces time to closing a sale, which is monitored by productivity gains.
2. Customer support collaboration: Reducing number of cases by allowing support personnel to collaborate with one another and provide documentation quicker. This reduces the number of cases opened, showing up as reduced headcount and lower cost of customer support.

What do you think? Where have you seen some experiences of ROI in collaboration and communities?