Assessing intranet cost-benefits

Why is cost-benefit analysis necessary? A method for calculating cost-benefits Scoping your intranet Establishing some basic facts & figures Analysing costs Forecasting benefits Analysing the results The cost-benefit calculator

Why is cost-benefit analysis necessary?

• "There are so many intangibles, it's impossible to do."
• "The benefits of an intranet are so obvious, there's no point."
• "An intranet is so cheap to set up that there's no requirement to justify it."
• "An intranet is just a basic tool, like fax and word processing, that can be taken for granted."
• "The figures are far too complex to calculate."

Paul Korzeniowski writes in Info World Electric: Rather than carefully evaluating bottom-line benefits, corporations are plunging headfirst into the intranet waters. New applications have sprung up in months or even weeks and top management approval is often assumed rather than requested.

So why spoil this cosy situation and go to all the trouble of a proper analysis?

• Because even relatively intangible costs and benefits can be measured if you are prepared to approximate.
• Because the benefits of an intranet may be obvious to you, but not necessarily to your senior managers, upon who's commitment your intranet will survive or perish, nor to the majority of potential end users who feel they are already overburdened with information and systems to manage it.
• Because the up-front direct costs of an intranet may be relatively low, but the human costs of setting it up, populating it with content and then maintaining that content are considerable.
• Because even word processing and fax had to be justified when they were first introduced (dont say anything - if they werent, they should have been!).
• And because, if youre prepared to follow a straightforward step-by-step procedure, youll find the calculations are not complicated at all.

Perhaps the strongest argument for conducting a proper assessment of the costs and benefits of an intranet is that this should provide you with the ammunition you need to do the job properly, with an appropriate budget and a realistic timetable. If it doesnt, then at least you will be forewarned enough to drop the subject quietly or look to get a job with another organisation, where an intranet is going to be of more use.

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