I had heard the term Value on Investment (VOI) sometime ago, but it never really held much ground in my thinking, Although i’m surprised as it is something that is complimentary to Social Software projects and Knowledge Management Projects.
For those of you who haven’t come across VOI before i’ll try and explain the difference between VOI and ROI (return on investment). Return on Investment is based on return, which is generated by tangible outcomes, such as increases in productivity, increased revenues, cost reductions or entering new markets. VOI however focused on intangible benefits, in particular those related to technology based initiatives and for the purpose of this post consider Social Media/Social Software as key areas to focus on.
Gartner describe VOI using 5 measurable elements or outcomes. Value building initiatives change organisation dynamics by encouraging: (Hint: spot how many can be facilitated by social media and social software)
- business process reinvention and innovation
- cultivation, management and leveraging of knowledge assets
- collaboration and increased capabilities to learn and develop communities
- individual and organisational competencies
- new kinds and levels of leadership
Don’t know about you but i’d tick all for social media and social software.
There is something you need to accept, however when measuring VOI. The more strategic the project the more value you will see in return.
When considering the current economic climate and situation, we should and must consider the VOI aspect as well as the ROI to achieve the level of organisational change that will future proof organisations for when we return to a growth scenario.
It also encourages greater alignment of IT and the Business, As the business needs to take the strategic advantage of the technology. IT alone offer no advantage to the business. To extract the value, the business would have to transform processes and practices, enhance knowledge sharing, establish communities of practice, develop competencies and provide tools for new leadership.
The strategic impact of social software will come over time with the cumulative effect of small projects impacting on the business and initiating change along the way.
My take on this really is that to succeed in the long term and to demonstrate the real value of social media and social software, it will take time, so be patient. It will develop as each new project delivers results and value along the way.
This exact approach is how i realised the value. I started with twitter, then a blog, then started social bookmarking, then started sharing photos and so on. The cumulative effect of all of these choices have transformed the way i work, collaborate and engage with people.
So focus more on the Value and less on the Return – But ensure you measure both along the way.