Thursday, 14 June 2018

Quantified KM Value stories numbers 121 to 123 - ROI of knowledge retention

From this published article comes three examples of quantified value from KM.

Image from wikimedia commons
The article is entitled "Assessing the Business Value of Knowledge Retention Projects: Results of Four Case Studies", and much of it comes from the work of Larry Todd Wilson, who operates a Knowledge Harvesting service.

Larry always tries to determine the ROI of the work he does, and he and his co-authors share the following 3 case stories:
The business result of harvesting (a senior forestry manager) expert’s knowledge was a single source for understanding how to manage delinquent accounts and how to respond to bad debt events, e.g., bankruptcy, collections, etc. The final deliverable was an interactive tool that was developed to capture and disseminate the key decisions relating to the management and response to delinquent/bad debt events. The estimated cost of developing the project was approximately $33,000, with a recognized benefit of $150,000. The immediate benefits to the company included not only improved productivity gains due to bad debt management practices being deployed, but also the ability to move forward without replacing the senior manager. The total estimated benefit over a three-year timeframe is approximately $450,000, with a net present value of approximately $334,000. Therefore, the return on investment of this project was approximately 10:1.
The deliverable captured the expertise from the technical (call-centre) expert and developed an interactive tool around the key decisions relating to the call center, eGain. The estimated cost of developing the project was approximately $12,000 with a recognized benefit of $41,000. The total estimated benefit over a three-year timeframe is approximately $124,000, with a net present value of approximately $89,000. Therefore, the return on investment of this project was reported as approximately 6:1. The efficiency gains from this project would include transferring 60% of the work from a high-cost employee to a lower-cost employee. 
The deliverable captured the expertise from the Senior Systems Analyst and developed an interactive tool around the key decisions relating to troubleshooting the (IT portfolio management) tool. The estimated cost of developing the project was approximately $13,000 with a recognized benefit of $69,000. The total estimated benefit over a three-year timeframe is approximately $207,000, with a net present value of approximately $156,000. Therefore, the return on investment of this project was reported at a greater than expected ratio of 10:1. Since the expert quickly adapted to the harvesting process, it took less time for the harvester to capture his valuable information; hence, reducing the time and cost required for the harvesting process.

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