Net: In 2007 EMC launched an initiative to develop a social media technology strategy because the company decided they should develop “social media proficiency” as a competitive advantage in their industry. Despite the fact that the initiative did not have a specific financial return requirement, Chuch Hollis, the EMC executive who lead the development of their Web 2.0 strategy recently published a White Paper that estimates tens of millions of dollars of return on their sub-million dollar investment.
Last Thursday, I got up at an the ungodly hour of 4:45 am to fly back to Boston from Toronto to attend the Mass Technology Leadership Council’s Social Media Summit: What’s the ROI of Social Media? (Travel note: in Canada you have to check in at least an hour – not 59 minutes – before flights to the US or have better selling skills than I to get through if you are late.)
Full of hope (and Red Bull) for more great case studies to add to my files, I arrived only a few minutes into the first speaker’s comments. Danah Boyd, the brilliant and charismatic Fellow at Harvard’s Berkman Center for Internet and Society, was giving a very interesting presentation on youth engagement with various forms social media. She was not – however – talking about anything remotely related to the “ROI of Social Media.” Maybe I could have missed that flight and slept in?
Next up was a panel of corporate users and social media agencies, but they too seemed to be tip toeing around sharing hard numbers to demonstrate the financial returns of their investment in Web 2.0. And then he said it. He was Chuck Hollis, EMC’s VP, Global Marketing CTO. More importantly, he was the executive tapped to lead EMC’s development of a strategy to utilize social media technology to enhance the company’s competitive advantage. What he said was,
“…and we eliminated a multi-million dollar training budget by moving it onto our social media platform.”
Chuck went on to say that he had blogged about the experience over the past two years and recently published a White Paper, entitled EMC|ONE; A Journey in Social Media. Chuck and the other panelists, including Leslie Forde from Communispace, went on to detail a number of hard number savings, revenue increases and/or productivity improvements from relatively minimal investments in Web 2.0 technology.
If you only read one thing about the impact of social media technology applied to the employee sphere, I strongly recommend you read pages 26-35 of the paper, starting with the section “Impact and Measurements.” You should read Chuck’s entire White Paper, but start here if you are a results junkie like we are. Before sharing a few quotes from the paper, I need to first make sure you understand that Chuck went out of his way to downplay the financial returns of EMC’s investment in social media, partly because he believes the greatest impact comes from the more immeasurable benefits of improved employee and business partner engagement and collaboration and partly because, as Chuck wrote:
“The entire topic of measuring business impact is very controversial for these type of projects. There is no consensus regarding generally accepted metrics for social media proficiency. Furthermore, this inherent lack of useful measurements and metrics can be used as an excuse to not undertake an investment in social media proficiency.
“A key part of any initiative is establishing general agreements regarding these success factors. We ended up talking in terns of our ‘measurement philosophy’ rather than concrete measurements.”
That said, here are a few data points you will find inside the White Paper:
- Accelerating time-to-revenue of multiple $100MM business initiatives by even a few months or even weeks results in substantial sums.
- The group manager of EMC’s competitive group estimates his group is now 3x-4x more efficient and impactful by using the social platform.
- EMC is now in the process of methodically complementing and/or substituting online community interaction with meetings in the physical world. These efforts either result in costs savings (millions per year), better and more time interactions, or both.
- A reasonable estimate of the combined value of EMC’s blogging capability (in terms of alternative investment) would approach 20-50 million dollars annually.
- Putting a number on the business value of [EMC’s] open interrogation is difficult, but probably runs into the tens of millions of dollars annually.
- Estimating the business value of tens of thousands of employees who are significantly and statistically more satisfied and engaged is a difficult task, but probably approaches tens of millions of dollars per year in terms of improved attraction and retention of talent, fewer costs associated with turnover and related aspects.
As impressive as these statements are, having listened to Chuck talk for a couple of hours last week and reading most of his White Paper twice now, I suspect he is most proud of this impact:
” In reality, all we have done is created a mechanism where people do what they already want to do – meet new people, discuss topics of interest, and help each other out.”
Our sentiments exactly.