Re: Business Case for KM #value

Stephen Bounds

Hi Aaron,

RROI = relative return on investment. It's a useful way to rigorously evaluate alternatives when direct financial benefits aren't applicable.

The basic steps are:

  1. Identify a suite of proposed interventions (KM or other)
  2. Estimate cost of administering each intervention
  3. Assess relevance of interventions to identified business problems
  4. Determine expected financial benefits of reducing or eliminating each identified business problem
  5. Assign proportionate benefit accruing to each intervention based on relevance
  6. Calculate RROI as benefit accruing / cost expended

To be clear: with RROI, even though dollar calculations are used it is not a promise to change the bottom line by that amount. Rather, the line of reasoning is:

  1. Here are things we want to improve
  2. These are things we can do to make improvements
  3. Doing X is the most effective for the cost involved

I have attached a spreadsheet with a simple worked example for your reference.

-- Stephen.

Stephen Bounds
Director & Principal Consultant
knowquestion Pty Ltd
E: sb@...
M: 0401 829 096
On 15/12/2017 12:42 AM, Aaron F Buchsbaum abuchsbaum@... [sikmleaders] wrote:

@Stephen do you have any references / templates for RROI matrix calculators? Dont know that Ive ever heard of one (ROI yes, RROI not ringing a bell)

Thank you!


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