The Costs of Foregoing a Real Knowledge Management Solution
This is part 1 of a 4-part series on the ROI of knowledge management software
Organizational knowledge is an intangible asset: Unlike cash on hand or marketable securities, the value can’t be neatly summarized in a spreadsheet cell. That doesn’t mean, though, that it’s immune to quantitative analysis, including measurement of its return on investment (ROI) – only that gauging its value requires a deep look into how it affects other workflows across the organization.
The ‘soft’ but transformative ROI of knowledge management tools
In that respect, the best knowledge management (KM) software is a lot like transformative CRM or ERP software, with many of its features contributing to “soft,” rather than “hard,” ROI. To better see the distinction between the ROI categories, let’s look at a few examples of each:
- Hard ROI: You automate a task that once required immense time and effort to perform manually. Alternatively, you consolidate multiple systems into one, greatly reducing your maintenance contract costs. In both instances, the savings are easy to measure, as well as to attribute to specific causes.
- Soft ROI: You implement a streamlined KM solution enabling easier self-service searches and fewer total service calls to the help desk. The productivity gains are real, but they’re products of complex cause-and-effect interactions. Plus, they strongly influence intangibles, like end-user experience and brand perception.
As we examine the ROI of KM systems in this four-part series, we’ll look mostly at how its soft ROI unlocks numerous advantages for agents and customers. A landmark Nucleus case study estimated that half of all technological ROI is indirect, with improvements in content management and collaboration among the biggest difference-makers.
However, since the mostly-soft ROI of a KM solution can sometimes be difficult to visualize before it’s implemented, it’s useful to consider the price of the easiest alternative – i.e., simply doing nothing – for contrast. The opportunity cost here is significant, as you completely miss out on the benefits of upgrading to true knowledge management software.
Missing out: Why passing up a real KM solution is like making a bad investment
Say you were actively investing in stocks. You elected to stick with Stock A instead of the newer Stock B. Stock A offered a 3 percent return for the year, while Stock B yielded 8 percent. You gave up 5 percent as the opportunity cost of missing the boat on Stock B. It’s basically the financial equivalent of the “fear of missing out” (aka FOMO) feeling, with the fear actually coming true.
The status quo that KM software will ultimately replace isn’t worth sticking with, either. Agents without access to comprehensive knowledge management systems don’t have everything they need at their fingertips. As a result, they might have to wade through outdated knowledge base articles, or spend additional time investigating and resolving the same issues over and over.
A TechValidate survey even found that half of traditional IT help desks lacked the key infrastructure (e.g., well-documented IT service management processes and a centralized knowledge base) for addressing this core challenge. There’s also the related issue of the enormous company bandwidth consumed by agents having to manually respond to password reset requests and/or field high volumes of calls about routine problems solvable through self-service.
Knowledge management software’s far-reaching benefits
With the best knowledge management software, the grass really is greener on the other side, and you don’t have to continue suffering these major productivity drags. A complete enterprise knowledge management system like Upland RightAnswers can deliver hard ROI in terms of how it centralizes your knowledge base, integrates with essential platforms like ServiceNow, Salesforce and SharePoint and automatically includes questions during content authoring.
At the same time, its soft ROI is even more substantial since it gives your team more tools to work with. Agents can resolve tickets more quickly, deliver more accurate answers and improve overall perception of the organization. Such improvements profoundly influence the company bottom line, even if they don’t have their own corresponding numbers, while laying the groundwork for growth and continuity. We’ll explore the other dimensions of the ROI of knowledge management software in the next entries in our series. In the meantime, be sure to check out the rest of our blog or schedule a free ROI Estimate with one of our knowledge experts.