The Role of Communication, Collaboration, and Content Technology Investments during Tight Economic Conditions (part 2)

January 15, 2009 at 4:03 pm | Posted in business case, collaboration, communication, Content Management, Recession | 13 Comments

The continuing slump in the world economy is doing little to dampen information worker’s enthusiasm for new and improved communication, collaboration, and content (3C) systems.  I wrote in part 1 about how organizations that invest during economic downturns generally do better than their peers when the downturn is over.  These investments may involve actual capital expenditures or may just be investments in time and resources.

I’d like to provide some ideas on how organizations can respond to communication, collaboration, and content trends when IT budgets are constrained.  I will address three distinct approaches in this posting and one more in part 3 (I’ll probably post that next week). 

Cost Savings

As I wrote in my document “Building a Business Case for Collaboration Initiatives“:

Costs and benefits can be thought of as being “soft” or “hard” by using a hardness measure like the 1-to-10 scale used in the Mohs scale of mineral hardness. Provable, measurable impact on a company’s profit through increase of revenue or decrease of expenses, accurately attributable to a direct cause, is similar in hardness to a diamond (i.e., it scores a 10)—and it is equally rare and valuable. On the other hand, “it will save every salesperson five minutes per day” is like talc (i.e., it scores a 1)—it’s simple, easy, and soft.

There are some instance-specific examples of hard benefits from 3C, but the generalized enterprise cases haven’t changed much over the years:

  • Reduction of printing and distribution expense through web-based delivery
  • Reduction in travel costs due to better use of 3C technology (especially web conferencing, but also collaborative workspaces and soon enterprise virtual worlds)
  • Reduction in software expenses by consolidating 3C infrastructure
  • Reduction in facilities expense by closing offices or floors and substituting hotelling or telecommuting
  • Reduction in software expense through competitive SaaS alternatives, such as for e-mail (this is perhaps the only new item on this list)

Cost Avoidance

Cost avoidance can be described as spending  a little now to save a lot later. The idea is that a change in the environment is occurring that means the status quo will no longer work in the future.  The proof is usually a “hockey stick” argument – a chart that shows a slow increase of something (like number of websites) up until recently and then a sudden upturn expected to get worse in the future if money isn’t spent now to get it under control. 

Standardizing on intranet or portal infrastructure is a common example of a cost avoidance argument where money is spent to day to prevent future chaos that will cost more to fix.

Given the tight economy, you can expect the payback period executives are willing to consider has shrunk significantly.  After all, if management thinks the recession will last 1-3 years and the payback period for your proposal is 5 years, why not postpone the investment until the recession is over?  Assume that the avoided costs have to greatly exceed the investment within 12-24 months to be considered.

“Free” Stuff

There is a slew of open source software for communication, collaboration, and content, especially in the hot areas of wikis, blogs, and content management. Larry Cannell did a detailed examination of the options in Open Source Communication, Collaboration, and Content Management: Cutting-Edge Innovation, Low-Cost Imitation, or Both?  He pointed out, however, that free software doesn’t mean there are no responsibilities since “these are still licensed products with terms that require compliance.”  And implementation and support may require external costs.

Open source 3C products we tend to hear a lot about include: Drupal, Media Wiki, TWiki, Alfresco, Apache Roller, Zimbra, and Liferay (to name just a few).

 

That’s it for part 2.  I plan to post part 3 next week.

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