Enterprise Search ROI (return of investment)
As enterprises continue to grow, information volume is growing as well with constant rate. Forester Research asserts that content volume is growing at the rate of 200% annually. With such growth rate the content easily riches the “too much information” point, when finding information without analytical tool is impossible. Giving people the right information is a key factor for employees who work with the business information to be productive. However, a large amount of content leads to “information overload” situation when people cannot find the content, and this impacts organization productivity. In such situation organizations should consider implementing Enterprise Search to discover all information company produced and continue producing.
However, the implementation search cost (information analysis, hardware, software and licencing) is usually quite large, so executives needs to see the justification of investing into the search, where the ROI of Enterprise Search is required. Enterprise Search ROI is factored by a number of parameters that depends on the collaborative scenarios that are established in organizations.
A simple calculation can help organizations see the potential ROI (based on effective Google search) is:
(# of workers) X (average annual salary/2,080 hours) X (hours saved/worker) = $ total productivity savings/year
This calculation estimates ROI from saved time. IDC estimates that effective enterprise-search could save about 53% of time (based on the research, that average employee spends 10hours per week searching necessary information)
To take into ROI account for the potential revenue increase, delivering products to market faster and other business aspects the following cost factors should be added to the formula:
- Information duplication (cost of re-creating the document that was created by someone else before)
- Lost opportunity of not knowing right information at right time (for example employees skills matrix to support sales pipeline)
- Knowledge is not shared (leading practices, known issues and etc)
- Time spent by customer to find the right product
Sources: 1, 2