The use cases described above show enterprise social networking’s potential business value, but they’re too squishy to be used as hard-dollar metrics. For some companies, that’s OK, because no one is demanding cost justification – yet. EMC is in its honeymoon period with social networking. “I think I have six to 12 months before I have to quantify hard savings, and I’m not sure how I’m going to do that,” Devanna says.

But he does have a few ideas. One metric is user adoption. EMC has about 10,000 wiki documents and 3,000 blogs across 150 topical communities on its Jive platform. Of its 38,000 employees globally, the platform has about 10,000 active users and another 15,000 lurkers who are watching conversations or consuming content but haven’t posted anything themselves, Devanna says.

Adoption doesn’t necessarily tie to ROI. When Devanna finally has to provide some numbers, he expects to be able to point to a decrease in the volume of emails and attachments across the company’s network, and the resulting reduction in storage costs. Instead of a 20-MByte PowerPoint being sent back and forth among 10 co-workers, it can sit in a common workspace where people can post comments. Devanna says he hasn’t tried to measure the decrease in email yet, but he’s sure it’s happening.

Devanna believes that social networking also will help EMC get new products to market faster. Before these apps were available, ideas for new products bounced around among a limited set of employees. Now they can be teed up on a platform with 25,000 pairs of eyeballs on it. The theory is that good ideas get validated and bad ideas get discarded more quickly, which leads to faster product development, he says. However, he admits that he has yet to prove this theory.

Devanna also may be able to point to one other return: The company launched the internal social apps to gain proficiency in creating external customer communities.

Pfizer hosts an enterprise wiki, called PfizerPedia, which was started as a side project by a handful of scientists in the company’s global R&D unit, Biersach says. The wiki, which runs on the open-source MediaWiki software (the same software that underlies Wikipedia), grew so popular that it’s becoming a formally supported IT platform. It has more than 2,300 users across multiple business groups, including sales, IT, and manufacturing, who use it to create knowledge bases and share documents. Pfizer also has a three-year-old enterprise blog that runs on Drupal, the open-source Web content management software. Pfizer executives use the blog, which is getting 10,000 visits a month, to communicate with employees about Pfizer’s business activities.

In addition to the wiki and blog sites, Pfizer’s internal site for social bookmarks lets employees share links to content and Websites they find relevant to their work. The company also is taking advantage of the social networking features built into SharePoint, which let employees create personal profiles. Departments and project teams also can create blogs and wikis associated with specific business domains inside SharePoint, such as a sales team or a specific department.

Despite Pfizer’s investment in social networking tools, Biersach says it’s all but impossible to calculate ROI. Instead, he measures value by gauging how much the company’s social networking applications entwine themselves into employees’ daily work lives until they can’t imagine living without them.

Like EMC, Pfizer measures the number of users and the frequency of use. Out of 98,000 employees, 63,000 are regular SharePoint users, and the company has more than 6,000 active SharePoint sites. Biersach’s team, which regularly reviews SharePoint activity logs, defines a site as active if changes were made to it in the past 30 days.

Those metrics have to be tempered by the user community itself. “If one system has 3,000 users and another has 60,000, but the 3,000 are all doing clinical research and using it daily, you have to factor in that qualitative value,” says Biersach.

Another measure of the value of social networking apps is by the number of other applications that can be linked to them in ways that enhance productivity. Pfizer is considering using Web services calls between SharePoint and its Siebel CRM applications to post a daily list of sales calls on salespeople’s SharePoint MySite profile pages. “A system that’s highly integrated into other systems is indicative of high value,” Biersach says.

Another way to measure the value of social networking tools “is to relate them to process improvements rather than time savings or loose efficiency gains,” Biersach says. For instance, Pfizer’s IT department created a wiki where users can search for solutions to common laptop and desktop problems instead of calling the help desk. While Biersach doesn’t have hard data to quantify the reduction in help-desk tickets because of the wiki, he knows people are using it, and he has anecdotal evidence that they’ve resolved problems without having to open a ticket.

Similarly, one of Pfizer’s enterprise wikis walks developers through the steps to check source code into an enterprise code repository. The repository helps the company better manage its proprietary software. Hundreds of developers use the repository, Biersach says, but its support team is quite small, in part because the wiki cuts down the number of help desk requests.

Just how wise is the crowd?
While companies struggle to quantify the value of enterprise social networking, the return from one subset of applications in this category is a no-brainer. Innovation or idea management apps provide a forum for customers and employees to share information and ideas on how to improve products and services.

One large retail chain routinely runs events to generate ideas on how to increase revenue, cut costs, and streamline business processes. Using a hosted platform from a startup called Spigit, the retailer invites targeted groups of employees, such as store managers or the logistics group, to log in to a Web application to submit ideas, and review, rank, and comment on ideas posted by their peers.

Last year, the company ran an event for 4,000 employees on the subject of improving its energy efficiency and cutting costs. The event generated thousands of ideas. A review team narrowed those ideas to a checklist of 20 items, such as switching off electronics products on display racks. “If each store follows that checklist, we estimate the company will save $30 million to $40 million per year,” says the retailer’s director of strategic services.

Another event for store managers focused on cutting costs and improving customer service. One idea from that event will save the company $8 million. “IT and senior VPs ask how we measure ROI for Spigit,” the director says. With numbers like that, the answer is easy.

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