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You Can’t Build a Business Case for Social Software

by Anthony J. Bradley  |  May 26, 2009  |  21 Comments

Late last week I had a conversation with a client who was asking for a standard set of value or ROI metrics for social software. The client asked me to address this blog post in particular. At its foundation, the request was asking for a “standard” business case for social software investments. Building a business case for social software is proving very difficult and I get many client requests for help.

There is a good reason why it is so difficult to build a generic, universal business case for social software. You can’t do it. Social software is a set of mass collaboration principles and technologies that apply to the construction of a solution, not the solution itself. Social software business value can and does vary widely from one solution to the next. Trying to build a business case for social software is similar to building a business case for a toolbox. In establishing the justification for purchasing a toolbox, you can talk only in generalities. You can build things better, faster and maybe with fewer accidents. This is the same situation when trying to justify an investment in social software. You can’t get concrete unless you know what you are building. Those of you who read my blog regularly are probably thinking, “Here he goes on about purpose again!” You are correct! You simply can’t talk business justification, estimate investment, calculate ROI, or build success measures unless you know why you are engaging the community…to what business relevant end. Although you can’t build a generic universal business case for social software, you can build a business case for a specific well defined business purpose that is enabled via social software.

Now you can build metrics around social activity (registered participants, visits per month, posts per month, average time between visits, pages viewed, etc.) which is important and can be indicative of a thriving community. However, the activity may or may not be delivering business value. Business value is measured separately from activity. 

I bring this up because for the past number of months I have been building a Gartner business case framework for social software that links the foundational social software principles with technology benefits, and business benefits, and business impact in a trace-ability chain that tells an end-to-end business case justification story for a social software enabled solution. This framework reuses the constructs from last years Gartner paper, “Building an SOA Business Case: A Gartner Framework” (available to Gartner clients or for a fee). The framework is fairly sophisticated and will still take some time to finish. I’m hoping to publish the “Building Social Software Based Business Cases: A Gartner Framework” by fall 2009.

I’m interested to hear who out there is building (or trying to build) a business case(s) for social software and how it is going. Care to share?

Category: social-software  social-solutions  

Tags: business-justification  social-solutions  

Anthony J. Bradley
GVP
10 years at Gartner
26 years in IT

Anthony J. Bradley is a group vice president in Gartner Research responsible for the research content that Gartner publishes through its three internet businesses (softwareadvice.com, capterra.com and getapp.com). These responsibilities include creating and leading the research organization and infrastructure needed for the strategy formulation, planning, research, creation, editing, production and distribution of the content. He has four global teams of highly talented people who are advancing towards the world's greatest destination for content on how small businesses succeed through information technology.


Thoughts on You Can’t Build a Business Case for Social Software


  1. Yes, we see some our customers building business cases for social software. If you recall, we presented you the case of Orange who is actually building a case for each of their community. And the guy in charge of it would be happy to discuss it further with you if needed.

    It’s true that this can’t be built unless you have a purpose and that it can’t be generic, but “Yes You Can” as you say in the US…

    In parallel, as I am myself managing lots of marketing projects with my customers and suggesting them to deploy social networks, I have also taken an ROI approach, calculated in terms of travel expenses cuts, time saved and reduction of production cycles.

  2. Anthony,

    I totally agree: you can’t build emergent objectives into a business case. I think too many organisations seek to build on the culture of Web 2.0 but still expect to see predictable benefits. In fact, I posted on this very subject today:
    http://contentedmanagement.net/blog/promoting-social-media-internally/

    I think management needs to compel people to use social software for work, but be open-minded about the results that it will bring. This means putting in place tools that can capture all kinds of KPIs to measure success.

    Philippe

  3. Anthony Bradley says:

    Philippe, you bring up two good points that I want to highlight. 1. This difficulty in building a business case around emergent technology certainly isn’t unique to social software. Choose any general purpose technology (automobile, airplane, telephone, etc.). You can’t build a business case for any of them unless you know how they will be used. Admittedly, social software business cases are more difficult than these more physical technologies. SOA and mashups are also good examples of general technologies that require a specific application for business case justification. 2. Although you need a seed purpose around which to build a business case, deliver a solution, and coalesce a community, it is very important to enable emergence and unanticipated benefits once the community has formed.

  4. Sameer Patel says:

    Brilliant post, Anthony.

    What it boils down to is a difference between Enterprise 2.0 and Social Computing technology. E2.0 is a state the enterprise achieves. The value of this can be measured. The second is the ‘toolbox’ that you refer to that can play a role in getting you to the desired state.
    I posted about this here: http://bit.ly/28Dz

  5. Anthony Bradley says:

    Sameer, this is a great, and succinct, way to distinguish social software (enabling technology) from E2.0 (how that enabling technology is applied for enterprise change). I appreciate the comment.

  6. Sameer Patel says:

    If you haven’t seen it yet, some comments on your post, brewing on Friendfeed here: http://ff.im/3h16G

  7. […] You Can’t Build a Business Case for Social Software You build a business case by having clear-cut goals and defining the right set of metrics to measure against. Mistakes are made when gearing business processes around toolsets. (tags: enterprise2.0 collaboration socialsoftware roi strategy gartner metrics casestudies) […]

  8. Agree 110% with Sameer’s point (as I usually do) about toolbox (the software itself) vs. solution (using the software to solve a specific business problem. Hence, to your blog entry’s title, “You Can’t Build a Business Case for Social Software,” you should append “Unless Unless You Can Define & Justify the Applications.”

    http://twitter.com/LLiu

  9. Agree. The reason why you cannot build business case for social software in my view is because use of social software is only benefit when applied to your specific use case, product or company. So, you can build business case about how to design best phone, improve innovation process etc., but not for social tools. This is just tools…
    Great Post BTW. Oleg.

  10. […] You Can’t Build a Business Case for Social Software […]

  11. I’m really surprised, Anthony. How comes that you changed your mind? If you go back to my old post https://blogs.gartner.com/andrea_dimaio/2009/01/28/forget-a-business-case-for-web-20/ where I was advocating for the uselessness of business cases for Web 2.0, you seemed to disagree quite strongly.
    I’m glad to see that our views are converging. Maybe I should start aiming at the difference you and others make between Enterprise 2.0 and social software, as I believe that’s a bit artificial, and certainly so in the government industry.
    Looking forward to your response.

  12. Anthony Bradley says:

    I have not changed my mind at all. I’m glad you brought this up so I can clarify :-) My point is that you can’t build a generic universal business case for social software but that you should build a business case for how you intend to apply social software (i.e., the purpose). You will find this very consistent with our earlier dialog.

    I want to repeat myself for emphasis. I am not advocating abandoning the business case effort. On the contrary, I am currently sinking a bunch of my time in building a framework to help enterprises build “purposeful” business cases enabled by social software. Enterprises should build business cases for social solutions to defined business challenges and opportunities. What they should not do is try to build a generic social software (or Web 2.0) business case that is devoid of any concrete business application.

  13. […] You Can’t Build a Business Case for Social Software […]

  14. […] now it is starting to seem gratuitous after my post titled “You Can’t Build a Business Case for Social Software.” But I do actually have a […]

  15. […] You Can’t Build a Business Case for Social Software You Can’t Build a Business Case for Social Software: http://bit.ly/a0JrI Not generically. My take on Enterprise 2.0 ROI: http://bit.ly/TPQ0t [from http://twitter.com/dhinchcliffe/statuses/2009300155 […]

  16. […] I have been talking about “a purposeful approach” for a few years now hoping to spare Gartner clients this intermediate failure step. See “Toolkit: Planning for Social Software Applications Using a Purpose Road Map” and “Ten Primary Design Considerations for Delivering Social Software Solutions: The PLANT SEEDS Framework” (available to Gartner clients or for a fee). Also see previous posts here, here, here, and here. […]

  17. […] a client conversation yesterday I was going through my now standard monologue on purpose, purpose, purpose as the three most important criteria for social media success (playing off the 3 most important […]

  18. Rainer Thiel says:

    Antony,
    I’m glad i found your post. It articulates a suspicion i have had for some time. I am embarking on a business case development exercise (various work streams) that may include social media proposals. So far i am thinking as follows (given that it is a greenfields environment):
    * Don’t spend any money on technology. Explore and experiment with the myriad free open source tools and widgets out there.
    * Make your investment in adopting peoples mindsets to embrace interaction and collaboration – this is not easy.
    * Be creative and thorough in defining non-financial benefit measures. Not an easy task, they must be meaningful, they must be persuasive.

  19. Anthony Bradley says:

    Rainer, minimizing the technology spend is always a good idea but only if you still deliver the capability needed to meet your social media goals. Be exhaustive in articulating qualitative benefits but also work hard to quantify what can be quantified.

  20. Rainer Thiel says:

    Thanks for your response. The business case work is now well under way, it is specifically for an intranet development proposal. The client is currently on an old client-server information portal that has lost all credibility within the user community. In that sense, a new browser based intranet is a pretty easy sell. The business understands that “they have to do it” so that there is an enabling (browser based) platform for exploiting the many features of other web-enabled business applications they use.

    Is that framework you mentioned in your post available yet?



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