A discussion on how to demonstrate ROI on knoweldge management has just started on LinkedIn. The discussion is taking place within one of my LinkedIn groups, ”KM Experts”. You can find it here if you are also a member of ”KM Experts”:

http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=47726&discussionID=20983&commentID=21237&goback=.hom

 

The discussion is interesting, and so is the topic. Here is what I’ve just posted:

 

”To really demonstrate ROI on KM, you would have to be strategic about KM and what is being achieved through the KM methods and tools one is bringing about in the organisation. Why KM? … Once the answer to this question is clear, you can design all sorts of measures and tools (such as the ones suggested by Celso and Patrick) through the results of which to link KM to financial performance. My argument is that the strategy/strategic vision behind KM is what will determine the metrics and more importantly what you will measure using them.

 

The problem with ROI is that it is a quantitative measure which means it is very specific. The nature of KM, though, does not lend itself to specific measures. You can not measure KM, per se, using quantitative measures. KM, by its nature, and for it to work, is broad, multiple, rich, and transformative – not just about sharing documents!! In this way, linking KM to ROI in a direct fashion, in order to evaluate the success of the KM programmes, is, according to me, impossible. You should not be trying to do this. It will divert your attention from what you should be looking at, really.

 

Still, what you can do is 1. measure KM in a qualitative way, 2. then second-measure some of the qualitative outputs in a quantitative way and link those to ROI. Off course, any ROI on KM estimate you would ever have would only be an indication, at the particular time, of how successful the KM is!! The real and true benefits of KM strategies and approaches span across at least a few years! If well done, these would be increasing with the advancement of the years. ”

 

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