Your Company's Go-To Source: The Intranet Inside

2005-02-18

According to Ernst & Young, a corporate intranet can achieve such great savings that it can result in a return on investment of 1000% or more — and payback periods can often be measured in weeks, rather than years! But before you read any further, please repeat the following: “An intranet is a project in its own right.” It deserves more than organic growth, more than being an information dumping ground, and more than a disjointed attempt to fit into the overall corporate communication strategy. Despite the best intentions, intranets often fail to deliver on the value they promise, because companies take an “if we build it, they will come” approach. The Nielsen Norman Group has stated that employees can take twice as long to complete tasks and get information from a poorly-designed intranet compared to a well-designed one — resulting in diminishing use and value. The best intranets have a consistent design managed through a central design team with a company-wide mandate to meet organizational needs.

Fundamentally, your intranet must be tied to value creation like other business services within your organization. If it does not result in value creation for your business, then it is a failed service. Establishing value creation can be tricky — with intranet objectives such as: increased employee communication, collaboration, and knowledge management being hard to quantify and measure. Many companies have set the goals of intranet success via page views, total hits, and customer satisfaction ratings. But this approach is not effective for understanding and measuring the value creation driven through an intranet, because an intranet's greatest benefits are not in a measurable, packaged form. Calculating an intranet's return on investment is a mix of doing scientific measurements and having a keen and discerning eye for both explicit (i.e. hard costs of processes, infrastructure costs, application costs, personnel training costs) and implicit (i.e. productivity and efficiency, revenue and sales, employee coordination and collaboration, customer support) elements. One theory presented in a recent MIT Sloan Management Review article by C.K. Prahalad and Venkatram Ramaswamy suggested that although the intranet alone does not create value — the site's efficient, able use in the context of specific, individual employee needs does. The use of the intranet in context of other services provided by the organization also affects the value creation. In other words, the result offered by the intranet as a whole in light of the value created at the point of use through the co-creation of experiences via the combination of a personal event-based need and the actual services being provided is more than the value added by the different parameters in isolation.

Once you have determined where your intranet's value lies, you will discover how your intranet is perceived by its users. If your intranet is not providing much value, it is a sign that there is either a lot of room for improvement or that other tools and processes within your organization are effectively serving your employee needs. If your intranet falls under the “needs improvement” category, then it's time to craft the optimal environment for value creation.

But how do you get there from here?

First and foremost, a disciplined approach is required…recall our mantra: “An intranet is a project in its own right.” That being said, here are some guidelines for successful intranet development:

  1. Review the existing intranet: The goal of this activity is to identify the primary strengths and weaknesses of the current intranet, and to start identifying the key recommendations for the renewal project.

    It may be beneficial to obtain outside assistance for this activity, as this provides a new perspective on the intranet and the issues with it. It can be very difficult to gauge the true nature of the system.