How can I justify the investment in knowledge-based self-help tools?

There are two types of cost benefits:

1. Cost displacement - which refers to improved efficiency or productivity.
2. Value added - which centers on effectiveness rather than efficiency.

Each company has a unique formula for calculating costs and benefits; therefore, the following calculators should be used only as a guide.

Cost displacement - Below is a basic ROI model that determines productivity gains through call avoidance by applying self-help solutions. It uses the following factors to determine calls avoided due to the use of self-help knowledge-based technologies and the resulting payback period for the system:

• Number of unique weekly visitors for a specific solution (e.g., 1000)
• Probability of solution usage (e.g., 1:10 = 10%)

• Number of weekly visitors * probability of solution usage = calls avoided

  1000 * .10 = 100

• Cost per call (see above) * calls avoided = savings

  $25 * 100 = $2,500

• Savings - average solution development time (burden rate * time to development) ($50 * 3 = 150) = net savings per week

  $2,500 - $150 = $2,350

• Net savings per week * 52 weeks = $122,200 savings per year, for one solution

(NOTE: To calculate total savings from your self-help system, you would need to perform this exercise for each solution on your Web site, then add together the savings from all the solutions.)

For a better understanding of your particular situation, use the calculator here.

Value added - Now that the tangible cost savings associated with call avoidance has been determined, which is fairly straightforward, consider the intangible or strategic benefits tied to a self-help, knowledge system implementation.

This is a little more difficult to calculate because it requires several assumptions on your part. You may have to consult with others in your company to obtain the needed information; however, there are cost savings to realize and it should prove to be an interesting exercise.

For this calculator, we selected the strategic cost benefit of knowledge protection. What is your knowledge worth? How is your business impacted when someone walks out the door and takes the knowledge in his or her head with them? What is the added value when a customer calls and the analyst has key product information at their fingertips and handles the request instantly?

These are the questions associated with knowledge protection and putting your business at risk when knowledge is not refreshed, recycled and contained in a secure environment. (A knowledge protection assessment may be necessary to determine the worth of your knowledge.)