We always love when our CEO, Brad Geldenhuys, imparts his wisdom. Read on for some quick tips on SharePoint ROI from the man himself.
Understanding SharePoint ROI is a tricky area if you are put on the spot with specific questions like “How much did this SharePoint project cost us and how much are we saving?” or “We spent a lot of money on this SharePoint application, how can we tell if we are getting our money’s worth?”
To be brutally honest, back in the day when I was a freelance consultant before I knew how to answer those questions they were completely disarming. I knew I had put in a massive amount of effort into the project, I had spent time with everyone involved in the business process, I analyzed each step, created a technical spec master piece, and delivered a spectacular SharePoint application under budget and in time. It all means nothing, when someone asked me “How much money am I now saving because of this SharePoint?”
I missed a crucial step in the entire process. I never worked out how much the current business process cost the company without the SharePoint application, and then I never checked to see how much time the SharePoint solution now saved.
I had to go back to square one and do my due diligence, which included the following.
- Calculate how much time the current business process, or lack thereof, is spent before the SharePoint solution is put into place. Put this number into hours for later.
Multiply that time by the average cost of the employees involved in the process to give you a $ value. For Example
So if an accountant costs the company $5000 per month (180 hours) and spends 2 hours a day (2×20 = 40 hours a month) on a process you will get $5000/180(hours in a month)*40(work hours) = $1,111 a month on that specific process.
- Get a SharePoint Analytics tool to show SharePoint usage before and after the solution has been deployed. I have tried them all and SharePoint Vitals is the best and the standard version is also FREE.
Calculate the time spent and the employees used in the new SharePoint process and with that $ value you can compare the ROI from the value in Step 2.The accountant now spends 2 hours a week on the process which is $5000/180(hours in a month)*8(work hours) = $222 a month on the new process, which is a saving of $ 889 per month and $10 668 per year
- Finally your ROI results for each SharePoint solution can be easily displayed with $ and Usage stats to give great high level and easy to understand results. Using SharePoint vitals, show how many users are actively participating in the solution and multiply that by the savings per year $10 668 and you will get a total ROI of the solution per year.
There you have it a great way to calculate SharePoint ROI with the usage of Web Analytics or Site usage stats.