Week 6: Return on Investment

Implementing social technologies within companies by now hopefully sounds like a great idea, but can an actual business case be made for justifying the expenditure? Yes it can, and Yammer is a good example of this. Yammer is an internal social network for companies to use as a way of communicating between employees. To gain access to the service, the business must pay a monthly fee per user (from $5 to $22) and as it is owned by Microsoft, companies are able to bundle it with licenses for Office 365.

Profits and ROI

Coles is a customer of Yammer, signing up 103,000 of its employees to the service. Up to $22 per employee per month, equaling $2,266,000 per month or $27,192,000 per year sounds like a large sum of money, so what would it take for Cole’s investment to pay off? Assuming that their employees work 39.7 hours a week (the national average for full time workers), for 50 weeks of the year, minus 1 day or 8 hours of training, making a total of 1,977 hours a year worked per employee and that their employees are also paid the average wage of $1,516.90 per week, therefore making $78,878.80 per year, an hour of a Coles employee’s working time using Yammer is worth $39.8982. Therefore, each employee must save 6.6168 hours each year to break even, or just under 8 minutes each working week.

If a user saves just 10 minutes each week, or 8⅓ hours each year, the company will save $332.485 per employee, or $34,245,955 across the company. This gives Coles a 25.9413% return on their investment.

It should be noted that this ROI doesn’t take into account any extra internet or networking hardware costs this initiative would incur, although these would be minimal, or factor in the cost of training, although it does allow for lost productivity. It should also be noted that it doesn't include that Office 365 (and support) is included in the cost, a service which companies would almost certainly already be paying for, and therefore that budget could be redirected towards paying for a bundle including Yammer, saving the company some money and improving their return on investment.

Other Benefits

Although companies ultimately make business decisions based on their bottom line, there are many intangible benefits that Yammer can also offer which Coles benefited from. Possibly most importantly, it provides a place for people to share their expertise, increasing collaboration, innovation and problem solving across the company. It also helps to free up store staff, meaning more are able to serve customers and give them a better shopping experience, as well as boosting employee morale and improving retention. Despite what many may think, that Coles is a large and more traditional company and therefore both the employees and the corporate culture as a whole wouldn't be open to trying Yammer, it was actually found that it had a high adoption rate, with 87% of employees using it within 3 weeks of it becoming available in South Australia.

What other companies do you know of that use Yammer or other internal social networks? Let me know in the comments.