Intranet Portal - Business Case ROI
The days of easy money are over
In these post-dot-com days of the 21st Century, the hype attached to IT is well and truly over. The modern Board is deeply suspicious of large IT projects with questionable benefits and a long-term payback period.
The good news is that a world-class portal implementation has the power to completely transform your organisation and touch everyone, from the office of your CEO to the lady in the canteen.
First a little on Costs
Sorry, but the cost of the software is only a relatively small part of the overall bill; with other major costs in hardware, process change and integration activities. Your first (and major) portal project is (in terms of cost) more an infrastructure investment than it is an application.
As a rough rule of thumb (for a user base >10,000), budget for £250 per desktop to put in the essentials (including portal and content management solutions). If you are also integrating to (and exposing) your ERP or CRM systems, add £150.
Based on my experience, Direct Benefits (those that you can directly bake into line budgets and make an individual directorate accountable for realising) are only 20-25% of the total prize and will not generally cover the portal implementation costs by themselves. Direct benefits include reduced printing and distribution costs, decommissioning legacy intranets and FTE savings in operational areas (including IT development & support, Finance & Procurement ledger processing and HR employee services).
Soft Benefits include improved employee satisfaction, better communication and corporate belonging, the importance of which should not be under-estimated in your business case. After all, there is always an emotional, as well as a rational, reason for every purchasing decision.
However, the bulk of portal benefits are Indirect Benefits, where time saved in line areas leads to (for example) reduced call times in call centres, higher sales, faster time to market for new products, fewer failed projects and so on. Benefits realisation is the issue with such benefits. After all, you can't fire 10 minutes of a person a day! The time they have saved is real - ultimately saving cost and driving sales - but it cannot be readily tracked to either.
Making the Business Case: A 10 Step Approach
In the Business Case and ROI chapter of my (free to access) Intranet Portal Guide, I outline a 10 step approach to making the portal business case.
1) Seek External Legitimacy
2) Benchmark other Organisations
3) Collect Hard Metrics
4) Use a Comprehensive Time Survey
5) Build a Wall of Benefits
6) Link to the Strategic Agenda
7) Identify 2-3 Killer Apps
8) Use a Cost Avoidance Argument
9) Consider Larger Scope
10) Use Innovative Phasing
Making the business case for a corporate Intranet Portal will not be easy. You will need all your reserves of patience, cunning and good old-fashioned hard work. Good luck and don't forget to check my guide for more detail, help and tools.
About the author:
David Viney (firstname.lastname@example.org) is the author of the Intranet Portal Guide; 31 pages of advice, tools and downloads covering the period before, during and after an Intranet Portal implementation.
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