How to Calculate the ROI of Online Communities

So far, we have explained how a community can increase revenue and reduce costs. This has largely meant creating or keeping a business and reducing costs. But what about business performance? Business performance lies smack in the middle of the two.

Many organizations launch an internal community to reduce operational costs and improve performance through saving time spent looking for information, sharing best practices, and improving how they communicate.

This is typically achieved through the following methods:

1. Document Management/Information Management. An internal community may significantly improve how organizations name documents, tag documents, and store important documents so others might find them. This might save employees within the organization considerable time looking for documents. By one survey, employees at large organizations spend 38 minutes looking for each document. Improved document managed allows the organization’s employees to find the information they’re looking for faster.
2. Experts Database. Similar to document management is the ability to locate experts within the organizations who can answer questions relevant to the project. This will save time and reduce the number of emails that are asked of people without the necessary skills or expertise. This requires a system to successfully identify experts. This might occur through previous contributions to the community, tagging experts within the organization, or via second-degree connections (e.g. a member who knows an expert who can answer the question).

3. Reduce Duplication of Effort. In many organizations, considerable time is invested in work which has already been completed by previous employees, other departments, or in distantly related projects. Much of this work can be copied or repurposed for new projects. Considerable time can be saved by developing a system whereby employees can check if a similar project has been completed in the past and find a simple means of identifying that project. This might occur through employees asking, being able to search for relevant projects, or through a better lessons learned
4. Reduced Time Replying to Internal Messages. An internal community can reduce the time spent replying to messages from colleagues. Responding to internal emails often comprises the majority of an employee’s time. As all discussions are shared and projects can be quickly tracked, an internal community might reduce the time spent replying to messages from colleagues by being able to track progress in the community and see previous discussions on the topic.
5. Reduced Staff Training Costs. As best practices are documented by existing employees, the organization can save time in training new staff members. This time can be saved via improving the speed at which an employee can be trained or spending less time developing new training materials.
6. Reduced Staff Turnover. Improved collaboration and communication typically improves morale of staff members and subsequently reduces turnover of staff. This has a direct cost saving resulting from the cost of acquiring new staff members.
7. Shared Best Practices. As organizations document and share best practices and lessons learned, performance across the organizations increases. Staff can apply these best practices to improve the outcomes of their work. This might be superior performance or increased efficiency.
8. Coordination. By collaborating, online members can better coordinate their activities. This might mean, for example, ensuring tasks that can be performed simultaneously are done so and potential bottlenecks are effectively overcome. It might also mean maximizing the use of the organization’s limited resources (time, specialized staff, production facilities).
9. Improved specialization in each task. Improved collaboration may also allow each employee to join together to perform their specialized task and not succumb to performing tasks which are either above or below their skillset.
10. Improved communication. Internal communities may also improve how employees communicate with one another. This might improve the effectiveness of messages by ensuring each employee receives the information they need in the format they need.