November 18, 2002 New Thinking:
Intranet return on investment case studies

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• The manual cost of enrolling in benefits was found to be USD109.48 per enrollment. Shifting this process to the intranet reduced the cost per enrollment to $21.79; a saving of 80 percent.
• For an individual to request a change to their mailing address, the manual cost was USD17.77. The intranet reduced this cost to USD4.87, a saving of 73 percent.
• The manual cost for a manager to approve a promotion was USD48.64. The intranet reduced this cost to USD14.01, a saving of 71 percent.

In a study entitled, 'Not an intranet portal,' Cisco Systems found that the intranet significantly reduced the cost of processing expense reports. The study stated that:

• In 1996, Cisco processed 54,000 reports. The amount of dollars processed was USD19 million.
• This required four staff, with a total processing time of four days.
• The cost per report was USD50.69.
• In 1999, the process had been moved to the intranet. 145,000 expense reports were processed, amounting to USD77 million.
• The number of staff required was three and the total processing time was four days.
• The cost per report was USD1.90.

Nestle has a number of food processing plants in Scandinavia. Its central support section for the region had to deal with a significant number of queries on a day-to-day basis.

Nestle decided to invest in an intranet that would answer as many of these queries as possible. The result was positive. The savings from the reduction in query calls was substantially greater than the investment in the intranet.

It's not always feasible to quantify in strict financial terms the benefits of an intranet. An intranet can improve how an organization internally communicates. This can result in:

• More loyal, committed staff, because they feel that they are being kept informed of important developments.
• An organization which is more capable of quickly adapting to a changing environment.

During the recent downturn, many companies were faced with difficult decisions. Hewlett Packard was one of them. A decision was made to ask staff to take a voluntary payroll reduction.

Information on the decision was posted onto the @HP intranet. It was accompanied by a tool which enabled staff to volunteer for the reduction, and to check out how many people had already volunteered. Within three days, 30,000 staff had volunteered. Ultimately, over 90 percent of staff volunteered.

Kathy Dolan, director of @HP, told Darwin magazine that she believed that the intranet, "played a central role in making the program work. Instead of finding out by word of mouth whether people were signing up, employees could check the site to find the current tally of volunteers; as the count steadily increased, it convinced more people to participate."

The intranet is becoming a vital business tool, delivering genuine ROI. Communication is at the heart of business. Increasingly, the intranet is at the heart of communication.

Gerry McGovern


Related links
Darwin magazine: Why do intranets fail?
http://www.darwinmag.com/read/110101/intranet.html

Reaping the Benefits of HR Self Service: The New ROI Models
http://www.cedar.com/USA/consulting/eworkplace/events.asp

Measuring the Dollar Value of Intranets by Toby Ward
http://www.intranetjournal.com/articles/200104/ii_04_25_01a.html

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