The Value of Collaboration #1: Reducing internal service costs

When it comes to the commercial value of collaboration platforms, there’s still a gap.

McKinsey thinks social technologies can unlock a trillion or so of value annually. For a single large firm, social tools and practices could easily be worth $500 million. But these projections are too high-level to help people change anything. Despite the possibilities, many firms simply aren’t realizing the commercial benefits of their collaboration platforms.

I hope to fix that. In a series of posts, I aim to create a solutions catalog of sorts, including:

  • specific problems large firms need to solve
  • how social tools and practices solve them
  • the commercial value of solving them (where value calculations will be based on available research and applied to a hypothetical 100,000-person firm)

The next time an executive asks “Why do I need a collaboration platform?” I want readers to have at least 50 million answers (and ultimately 500 million).

The first solution in the catalog, and the first $10 million in value, are based on reducing internal service costs by increasing self-service.

The problem

At home, when you have a question, you search for the answer. But at work, you call someone or send them an email. (Or, worse, you interrupt several people around you and ask whom to contact. Then you call someone.)

That’s because the knowledge to address your issues is locked up inside different knowledge bases across the firm and there’s no simple way for individual employees to find it.

How big a problem is it? Employees in a large, complex firm can generate 200,000 email and phone queries per month about desktop, mobile, and HR issues alone. And those are just the official requests to help desks. In addition, there’s another 200,000 queries per month at least (e.g., for the firm’s 1000s of individual applications) that typically get routed to other staff.

Handling all of those 4.8 million activities every year requires a lot of people. A good estimate is $50-80 million for the firm’s cost of internal service. And that doesn’t include business opportunity costs or lost productivity for employees.

The solution

By using the online forums of a modern collaboration platform, you reduce this cost by making answers easy to find and easy to trust so users can help themselves. (Here is a good, succinct summary of other benefits in addition to reducing costs.)

This isn’t a new idea. Companies have repeatedly shown the value of doing this with their customers. Now, though, you can readily apply the same tools and practices inside your firm.

The solution has 4 parts:

  1. Use the collaboration platform to store answers you already have.
  2. Post all new issues as forums on the platform (and nudge users to post their issues there as well).
  3. Recognize and rewards users who provide feedback or help answer questions.
  4. Assign a curator for every application support team and every help desk who’ll be responsible for content and for interaction with users online (monitoring and responding).

IT and HR teams are already doing most of this this work. They’re just doing it – and doing it less effectively – on their own information islands. By coordinating support efforts around the use of a searchable set of forums, you make a single, universal search box the point of user contact instead of a phone number.

Not all issues lend themselves to self-service. And some, like password resets, require some automation before users can help themselves. So you’ll still need support staff and ticketing and workflow (e.g., to dispatch a technician and track status of an outage). You just won’t need as much.

What’s it worth?

Besides being more convenient, online self-service can easily be 80 to 120 times cheaper than service via phone or email.

Importantly, the feedback and contributions from customers make it so the online knowledge keeps getting better and better – and so even more issues can be handled online. (Even in 2009, there was a compelling business case for creating customer communities, for example. Over time, the numbers just keep getting better.)

My own experience is that a single curator and her community of users can build up a knowledge base of 500-1000 questions in just a few months by working out loud (pushing content onto the collaboration platform as issues come up) . That has translated into support costs plummeting by more than half for certain kinds of applications.

Across both IT and HR, a conservative estimate is that you can move 20% of the support burden to online channels. At the low end of the range for a firm’s annual support costs ($50-80 million), a 20% shift to on-line self-service would save $10 million every year.

Why doesn’t everyone do it?

The biggest barrier isn’t adoption by users. As the Corporate Executive Board put it, it’s one of the rare cases of “cost savings customers want.” For many simple requests, on-line self-service is simpler and faster and so users actually prefer it.

The biggest barrier is that each department, and very often individual teams, cling to their proprietary knowledge bases. They’ve created systems and processes optimized for tracking activities instead of increasing user satisfaction and the speed of finding answers. (This is particularly true when help desks are outsourced.) And they’re loath to change what they do for the greater good.

So you’ll need more than a grassroots campaign to implement this solution. To help users help themselves – and realize at least $10 million of value – you’ll need to prescribe the use of the firm’s collaboration platform for all help desks and IT support teams.

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About John Stepper

Driving adoption of collaboration and social media platforms at Deutsche Bank. (Opinions here are my own.)
This entry was posted in ROI, Social Business and tagged , , , , , , , . Bookmark the permalink.

12 Responses to The Value of Collaboration #1: Reducing internal service costs

  1. compelling business cases unfortunately will not change what has been imprinted into our brains by the industrial age, as reflected by org charts. call me cynical, but if my career at the company was built on sitting in email, answering questions of my colleagues, i’m not particularly interested in databasing my answers so that i’m no longer needed. perhaps it’s bad career strategy but this is a fact of big employers, unfortunately.

    my point is not that it’s hopeless. rather, for collaboration to take hold, blow up the org chart and hierarchies. time to re-imagine organizations in a way that the org chart no longer can cover it. for example, how could you create an org chart of a family?

    great post john!

    • John Stepper says:

      Thanks, Josh. Yes, that is a cynical (but not unfounded) position.

      While blowing up the org chart sounds attractive, I don’t like it for existing large firms for 2 reasons:

      1. It’s highly unlikely
      2. I’ve seen evidence that, even if I can’t get everyone to change, I can get a critical mass of people to behave differently. (i.e., enough to realize significant commercial value)

      So I’ve left the revolutionary rhetoric for others (there are plenty out there) and I’m focusing on the most likely way to bring about change from within the current structures.

      Wish me luck. 🙂

  2. Simon O'Kane says:

    John,

    the best way to bring about meaningful change that will have a major commercial impact is to focus on the real meaning of Collaboration. Much hyped social tools are really just advanced versions of e.mail – i.e. communication. Collaboration is defined as people coming together to do real work with a tangible output or deliverable. Social certainly has a role to play but now the hype is passing people are recognising it is just a useful tool that may or may not add to the collaborative effort.

    Employees come to work to “do work” not “talk about doing work” and true collaboration tools facilitate that objective. If the tool allows a more social way of interacting then that’s a bonus!

    Simon

    • John Stepper says:

      Thanks, Simon. I agree about that social business hype is, well, hype. And yet, I find myself reacting to your “do work” as opposed to “talking about doing work”. I want both. And I find that working out loud (making work observable via collab platforms and also narrating your work in progress) is of tremendous value to both the firm and the employee. You can’t do either of those things well via email.

      Again, I agree the social aspect is overplayed within the enterprise. I find only a small percentage are interested in posting short status updates, for example. And, yes, the modern tools aren’t nearly enough in and of themselves. But they are necessary and valuable as we try and change how big firms work.

  3. Joachim says:

    Hi John, I was trying to come up with a meaningful depiction to distinguish the two approaches. Here’s an idea: https://dl.dropbox.com/s/biq55twz40ewu4z/self-serve.png

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