Why should your organization fund your digital project? The only answers that matter to your boss are: 1) it makes the company money; and/or 2) it saves the company money.
Is that harsh or oversimplified? No, frankly it isn’t.
Once we accept this reality, we can use this fact to accomplish our goals, which of course align with company goals. The first step of any project or initiative is to understand how it relates to these goals.
For e-commerce projects, this exercise is often easy and self-evident – we are going to invest $X to receive $X + $X. Across many industries, there was an initial fear that driving business digitally would cannibalize current channels, but as digital engagement has maturated, this fear has proven unfounded or at least misguided. It is now commonly recognized that as you gain more share digitally, you simultaneously reduce your costs to service those transactions and help guard against losing share to your competitors who make it easy to do business with them through digital channels.
So, if external revenue producing digital channels are easily justifiable, what can be said of internally focused digital assets? This is where we need to ask ourselves the two fundamental questions: how are we going to make or how are we going to save money?
The first and most important step is to realize that ‘soft’ metrics are just that. What does it mean that a majority of the workforce defines itself as “disengaged”[i], or that half of all organizations don’t have a formal social business strategy[ii], or that corporate email users receive on average over 117 emails per day[iii]? As communications, IT, marketing, and HR executives, we intrinsically know that these facts are meaningful – but how do we communicate this in business terms to CFOs and COOs who don’t have the same experience of wasting time looking for information, not being able to effectively share ideas, or not knowing who to contact that the average employee has day-to-day. Typically, these are executives who did not grow up in a digitized world, much less a digitized corporate environment.
It then becomes a matter of translating the soft (but very real) benefits that go along with increased digital collaboration, participation, and utilization into terms that matter to the business. Again, we refer back to our two driving points: how will this create revenue or reduce costs. This means we need to start measuring the effectiveness of our digital assets, continuously and not just at random points in time. We need to define who owns the metrics that we establish, and why they own them. We need to report our results.
In doing so, we start to speak in terms the C-suite understands. For instance, in the U.S. alone, the cost of disengaged employees ranges from $450 billion to $550 billion each year[iv]. Internal digital assets that drive social engagement shrink employee turnover by X%, which in turn lowers recruiting, onboarding, and ramp up costs by $X (you have these numbers, you just need to use them). According to McKinsey, reducing time spent on email and searching for information translates to increasing employee bandwidth by 60%. A specific line of business application will cut cycle time by XX weeks, resulting in a savings of $X. In one real-world example, we have a client who was able to drive documented cost savings of $12 million annually within the first 6 weeks of a knowledge sharing digital collaboration initiative. Again, these are numbers your project sponsors can understand and rally around.
The urgency of nurturing the digital workplace only increases as Millennials join the workforce in record numbers. They are a misunderstood and somewhat fickle talent pool that bring with them tremendous optimism, innovation, and ideas. As an employer, it is incumbent upon you to help them to feel like they are making an impact, by providing them with the collaborative tools that they are accustomed to in their everyday lives. If not, you run the risk of losing them – and you will feel the impact in increased HR/recruiting costs, the reduced internal productivity that comes with new employee ramp up, and perhaps most damaging, missing out on the opportunity to leverage their insights into what is soon to be your customer base.