Sunday 6 October 2013

Week 10 : Return on Investment (ROI) of Social Technology implementations



Although social technologies enhance cooperation amongst organizations and enhance their levels of collaboration with each other, it only contributes a very small deal to the true Return on Investment of an organization. Still, organizations around the world are concerned about finding ways that can increase their ROI given the reason that social technologies have potentials to take the business to newer heights. As long as the changes are implemented in an effective manner, crowd-sourcing and customer feedbacks have the potential to translate into ROI. It is suggested by the social innovation adopters that the collection of new ideas form the business world and the collection of new business knowledge through different social technologies is a very profitable aspect of the corporation, if it is used effectively for multiple gains other than simply increasing company presence.
Social technology implementations involve employees in a collaborative environment of research and exploration in order to collect and form new ideas for business interest. However, a contribution to the organization’s ROI will not be possible until and unless those ideas and feedback are put into concrete practices. This is why companies are increasingly concerned about not only exchanging ideas but “practically” implementing those, too.

In order to gauge the success or failure of a project in a successful manner, the ROI numbers need to be as accurate as possible. Without truly knowing about these figures, assumptions regarding the effectiveness of the project can only be made. Gathering the right type of data involving social technologies implementation is indeed a tedious task. For this reason we selected IBM as our company, in order to see if social technologies implementation at IBM contributes to its ROI or not. Forrester Consulting group is a company that mainly deals in realizing the ROIs of companies that implement social collaboration technologies within their businesses. It has been studied by the IBM Corporation that an adoption of social media tools can result in providing profitable incentives for the prospects by its partners and business collaborators. It was maintained that social technologies implementation will result in bringing new revenues to each set of new products for the corporation, savings of staff productivities and more profits on incremental sales.
IBM’s total revenue: $20 billion a year
Revenue of new products: $420,000 - $8,400,000 (likely estimate: $2,100,000 per year)
We get the following estimates for the profits by adding up the low, likely and high estimates in these four years’ categories:
Profits (1 year)
  • Low – $1,045,500
  •    Likely – $3,041,813
  • High – $10,556,813
Profits (3 years)
  • Low – $3,136,500
  • Likely – $9,125,439
  • High – $31,670,439
The three ROIs for social technologies implementation for IBM are as follows:
ROI Low=47, 53%
ROI Likely = 329, 23%
ROI High =1389, 67%

These figures illustrate that IBM can realize a good degree of financial success of it implements social technologies using effective social media marketing tools.

12 comments:

  1. I really like the way by showing "low","likely" and "high"..very straightforward..Good post..The image is also interesting and suitable..

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    1. Thanks a lot jak for your comment nice to hear from you that you liked my post ..

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  2. I enjoy the way you put out the information, a good social media can help a companies ROI

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    1. Hi Daniel,
      My pleasure to share the valuable information with you..

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  3. Interesting topic, I really like how you represented the information, as well as indicating an expressive picture

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    1. Thanks lujain for your supportive words , I really appreciate that

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  4. Great work, has the strategy benefits to follow estimates cost for each year of social technology implementations.

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    1. Hey tahani thanks heaps, its just like what you have done its much amazing ..

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  5. Nice structure, graphics!!
    It was really interesting,
    Profits (3 years)
    Low – $3,136,500
    Likely – $9,125,439
    High – $31,670,439

    It's really big benefits. I think IBM is a really good example of ROI
    Well done :)

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    1. Hello Hee , yeah that’s why I select IBM, they are really an excellent model for ROI..

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  6. Hello Rowaina
    I have found a lot of useful information from your blog and its good to see that you have mentioned about the low, likely and high values.
    Please feel free to read my Blog.
    Thankyou.

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  7. Hi ramia, I am very happy that you benefited from my post, so please keep reading my blog posts . And of course I always read yours.

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