« The search gap – part 2
Why is CRM search so bad? »
Rebecca Thompson

In search of ROI

I once joked with a boss of mine that everything bought and sold by businesses can be boiled down to having just one of two benefits—it either saves you money or makes you money. Last Monday, I was reminded of this conversation while sitting on a panel, “Enterprise Search: Running Your Own Search Engine”, with a few other folks at the Search Engine Strategies Conference in San Jose. One of the panelists, Bill French, CTO from Myst Technology Partners, brought up statistics from IDC in his presentation, observing that employees may spend up to two hours a day searching for information, to illustrate the point of why enterprise search is so critical. Now these are not new numbers, they are the same figures that everyone in the industry has bandied about for quite some time as the reason d’etre for search—if enterprise search solutions can save each employee x amount of time, then multiply x by y (employee hourly salary) to get the theoretical dollar savings per employee search can provide. This is the “saves you money” argument.

The problem is, I’m not sure it is a very persuasive argument. Sure, with effective search, employees will save time. No doubt about it. The question is—what will they do with the extra time? Will they use it to do work that is more productive for the company or will they take a longer lunch or go home a bit earlier? These are the questions a fiscally prudent CFO or other senior executive would ask before signing off on an enterprise search platform when presented with an ROI justification that is calculated on employee productivity.

A more compelling argument for search is to think about the latter argument, the “makes you money” one. Here at Vivisimo we spend a lot of time listening to our customers talk about not only finding information via search, but also taking action on it—sharing found information with others, adding knowledge to previous works and building off existing information by using the collaborative social search features in our platform. And we hear them talk about search discovery—finding information they didn’t know was even there—information that can help bring products to market faster, make their companies more competitive, etc. These are value propositions for enterprise search that go well beyond an ROI based on reducing the bottom line to an ROI based upon adding more to the top line.

What do you think the most compelling ROI for search is?

Tags: , , , , ,

This entry was posted on Monday, August 25th, 2008 at 2:51 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Trackbacks & Pingbacks

What is a Trackback? What is a Pingback?

No trackbacks yet.

Discussion

  1. November 12th, 2008, at 8:05 pm # r arun wrote:

    I would say that we use search for making informed decisions fast and efficiently. So relevancy and searching across multiple sources (internal) as well as external from a single point of access is more important.This should be like a insurance product against risk. Therfore ROI should be tuned to this. The risk of searching and making decisions on less relevant information presented to you is always dangerous.

  2. November 12th, 2008, at 8:27 pm # Phil Lloyd, Deloitte Australia wrote:

    I agree with the points you make Rebecca. Another benefit I think is increased staff engagement – its more satisfying / less frustrating with good enterprise search. This leads to reduced costs (lower turnover, easier to attract) and increased revenue (increased commitment to quality service, innovation, etc)

  3. December 6th, 2008, at 9:57 am # Dex wrote:

    My thoughts are this:

    http://bobsutton.typepad.com/my_weblog/2008/12/business-language-that-makes-me-squirm.html

  4. February 6th, 2009, at 8:17 pm # Jax wrote:

    You can’t talk about ROI and not include numbers. Anybody who has searched for anything can tell you that there is a benefit to good search, but Investment is qualified, in part, from the numbers. I would appreciate some of your thoughts on the common activity metrics companies use to justify the Investment. R.O.I.

  5. February 20th, 2009, at 12:58 pm # Rebecca Thompson wrote:

    Jax – most of our customers use a combination of employee satisfaction with search surveys, reports from the search platform itself on usage and anecdotal business productivity stories to make the case both before and afterwards. If we are doing a replacement of another search vendor, typically TCO #’s are also calculated with a combination of hardware/software/operating cost savings estimates.

    What I have not seen is any use of the “implement this and you can reduce headcount by x” sort of ROI used by other business productivity apps, nor do I think it would be useful or accurate to do so with search, largely because I think the more interesting question is – “What does the business lose by not harnessing information?” Capgemini will have some data on this that will be presented at the upcoming Enterprise Search Summit in NYC – see my latest blog post on the information superhighway for more details and links.

  6. March 24th, 2009, at 4:19 pm # Sergio wrote:

    Trying to calculate ROI with Enterprise Search solutions is similar to do the same with CRM applications. How can we calculate a better idea or make a less risky decision as a result of a better information retrieve? It´s really very difficult. Instead, I think we need to explore the experiences and results from companies that already implemented this type of solutions. I mean, we need to survey the user´s experiences and how they consider this technology improved their jobs, the pros and cons, and what they think if they must return to their previous stage (working without these tools).

  7. June 5th, 2009, at 2:51 am # Chris Benjamin wrote:

    Thanks for sharing this wonderful thought.

    Chris Benjamin, Rogue CFO

Leave a Comment