KM and ROI
Kaye Vivian has written up her thoughts about KM and the Myth of ROI, based on a recent ACT-KM conversation.
... There is a fallacy in all discussions of ROI for KM. As long as accounting systems (and financial managers) reject the so-called “soft” or intangible values of KM and treat KM like they treat software or a new piece of equipment, the true ROI of KM will never be shown or appreciated. How can you value or assess the worth of KM without talking about improved morale, reduced employee turnover, employee satisfaction, better information flow throughout the organization, personal pride, more knowledgeable employees (who give better customer service), stronger affinity networks, brand enhancement, cultural change, improved communication, team building? Until there’s a way to get those kinds of things counted toward financial value, ROI is a meaningless discussion in relation to KM.
I agree with the problem Kaye states, but I'm not sure that KM can avoid the money issue completely. Some of the technocratic KM solutions are not cheap. Clearly, the decisions to pursue these strategies are not totally justified by traditional "hard" measures. I heard a talk at CSCW 2004 that suggested ROI discussions are simply part of the fabric of making decisions. If one can talk intelligently about the expected returns (in whatever form) and the benefits to the company and the people, then it is more likely to be approved.
As I've mentioned a number of times, I am fond of some simple questions around KM efforts: what is the limitation being overcome? what is the power of the KM project? what old rules were in place due to the limitation? what new rules do we need?
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