Posts Tagged Social Media

Return on Investment with Enterprise 2.0

Return of Investment (ROI) is a way of considering and measuring profits in relation to investment. ROI may be suited for some areas of business, but in terms of measuring the implementation Enterprise 2.0 this form of analysis is neither as accurate or straight forward to use, compared to measuring conventional solutions.

Return of Investment is used by organisations to calculate potential losses or gains before a project is started, implemented or major financial decision is made. ROI comes from the activity and the actual collaboration of its users, not from the technologies themselves.

Over the past few years, many companies and organisations have spent a large amount of time and money to try and identify and perfect a “ROI Model” in terms of Social Media. These include Wikis, Blogs, Micro-blogs and other Social Media’s. The problem arises, as there is no real definitive way to create a ROI equation for the implementation of Enterprise 2.0 tools. How does one go about measuring the effects of better organisation, increased productivity and less email overhead?

How do we measure it?

How are they going to measure it though? Well first it is important know what exactly you want to achieve. With this, an appropriate formula can be used to calculate the ROI. There are several different formulas, all of which measure difference aspects.

1.ROI = (revenue – investment) + targeted engagement (new clients) / investment * 100.
This will establish new leads attained from the project, though however can be used in measuring conventional advertisement campaigns as well as social media sources.

2.ROI = (revenue – investment) + employee retention / investment * 100. 

With employees, profitability and productivity will increase and means employees are less likely to leave. This can be compared against how much it would cost to train a new employee.

3. ROI = (revenue – investment) + customer engagement and idea generation / investment * 100.

Engaging customers build customer loyalty and brand awareness. It also makes customers feel they are more connected and that they are dealing with real people.

Below are some concepts that can help demonstrate the benefits and ROI within Enterprise 2.0 Technologies, and some of the ways and difficulties of measuring them:

ROI Breakdown

1. Increased Employee Engagement.

We’ve talked about Employee Engagement in my previous post Benefits and Risks of Enterprise 2.0. Enterprise 2.0 technologies bring the staff together and get them involved in something much larger than themselves. It leads to better internal communication with in the company, and with it also comes a more effective learning and deployment environment due to bringing such fast amounts of technology together.

How to measure: though surveys which most companies already conduct anyway.

2. Turnover

Social media in the workplace helps new employees adapt into the workforce a quicker rate as opposed to workplaces with no enterprise 2.0 technologies. Employees are also more likely to stick around a workplace, which takes advantage of enterprise software. An employee turnover is estimated at 100%-150% of the annual salary and reducing the amount of turnovers even by 1% in a larger company can save millions.

This is measured by observing the amount of turnover before and after the implementation of the enterprise 2.0 software.

3. Organisation Agility:

Organisation Agility is the idea of self-actualisation, and includes being able to see changes in markets faster, shifting resources in response to new opportunities and needs, and moving on from initiatives such as programs, markets and products that no longer work or are failing; The ideology of a company being more “Agile”.

ROI in Enterprise 2.0 is a hard thing to measure, though when organisations set out goals of what they wish to achieve, how to reach those goals, and ways to measure those goals, they can create models to suit their own company to help justify the use of Enterprise 2.0 tools, and calculate the Return of Investment.

I would like to end with a great Slideshow on the ROI of social media


Carpenter, Hutch. (2010). Retrieved September 10, 2011 from Maslow’s Hierarchy of Enterprise 2.0 ROI.
Kim, Aaron. (2011). Retrieved September 10, 2011 from ROI 2.0, Part 3: We don’t need a Social Media ROI model.
Hinchcliffe, D. (2009). Retrieved September 10, 2011 from Determining the ROI of Enterprise 2.0.
McCarnan, Jacquie. (2011). Retrieved September 11, 2011 from Social Media ROI for Idiots.
Wikipedia. (2011). Retrieved September 10, 2011 from Return on Investment.

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Legal Risks of Social Media – Cisco

In my last blog post I discussed the benefits and risks of implementing Enterprise 2.0 into the business realm. While this is all well and good, we did not touch on the legal risk and implications to the company in regards to the use of Web 2.0 tools.  Grasping the legal implications that Enterprise 2.0 can have on your organisation can be slightly confusing. Businesses have found a new place to present themselves through social media sites. Having a channel available to communicate with customers in a non-formal way creates connection and awareness, though can leave a company vulnerable to their own Enterprise 2.0 success.

Social Media Policy (SMP)

According to Dundas Lawyers: “A Social Media Policy (SMP) is a document that suppliments a contract of employment to be legally enforceable by an organisation on its employees. The aim of an SMP is to clearly communicate what is acceptable conduct on Social Networking Sites by an organisations employees and contractors and what conduct is unacceptable and would make an employee liable to dismissal. An SMP is distinct from an organisations Social Media Strategy (SMS) which is a high level document that communicates how an organisation plans to participate in social media.”

social media policy is a must have legal document for any company. An SMP may protect or attempt to address the company both internally and externally for the below:

  • Copyright breaches
  • Privacy breaches
  • Defamation
  • Conduct of employees that an employer may be vicariously liable for
  • Discrimination claims
  • Trademark
  • Confidentiality breaches

Organisation Case Study: Cisco

Cisco is a global corporation that designs and sells consumer electronics, networking, voice, and communications technology and services.

In this following case study we will analyse and discus policies that they have set in place.

Cisco can be found on many social networks, including Twitter and Facebook; and are no strangers to implementing Web2.0 tools for internal use.  While this creates new openings for collaboration and communication, it creates new responsibilities for Cisco employees. Being a big company embedded into social networking, there are lots of legal concerns that Cisco has to consider.

Confidential information and breach of continuous disclosure obligations

In Cisco’s SMP it is made very clear the legal implications and internal dealings if any unauthorized information is posted. “Your Internet postings should not disclose any information that is confidential or proprietary to the company or to any third party that has disclosed information to Cisco.” Posting any confidential materials may impact the company in a negative way and may effect business competition. Releasing of internal documents is threatened with contract termination and the pursuit of legal advice.

Copyrighted Infringements

Social networking tools such as Facebook, Twitter and Blogs enable users the ability to upload content such as music, videos, text files. This leaves employees venerable to uploading copyright material to these websites, which can be a major legal risk with daft implications to both the company and the individual.

Cisco in their SMP state: “Because you are legally responsible for your postings, you may be subject to liability if your posts are found defamatory, harassing, or in violation of any other applicable law. You may also be liable if you make postings, which include confidential or copyrighted information (music, videos, text, etc.) belonging to third parties. All of the above mentioned postings are prohibited under this policy.”


While it is always difficult to avoid a social media disaster from happening, implementing a social media policy is the best way to inform your employees about the risks that is involved and having a preventative option in place.

Cisco have made their social media policy available for public viewing and ironically it has been published on their public blog.

*Note*The materials and information provided in this blog itself are general commentary on the law only.  It is not legal advice


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