The Value of Yammer: ROI Is Only The Beginning

An independent research group confirms the economic impact of Yammer

Sure, connecting employees across departments, geographies, and generations through real-time communications yields significant qualitative benefits and outcomes. Enterprise social networking improves collaboration, by tapping into a company’s employee base to find answers and experts, more quickly solve problems and better coordinate work. Our customers consistently report Yammer’s positive impact on culture and employee morale. But does Yammer deliver true business value?

As part of last week’s press conference, we were pleased to announce the results of “The Total Economic Impact (TEI) of Yammer (April 2011)”, a commissioned study conducted by Forrester Consulting on behalf of Yammer. For this study, Forrester Consulting used its proven TEI framework, which helps organizations make smart investment decisions about emerging software like Yammer.

Background: a multi-step approach

Forrester Consulting conducted this study over an intensive 12-week period. After interviewing Yammer product management, marketing, sales, and customer success, Forrester Consulting gathered industry data relative to Yammer and the enterprise collaboration market in general. Forrester Consulting then interviewed four organizations with paid, mature, and active networks, in order to assess costs, benefits, risks, and flexibility. Based on the actual experiences of these organizations, Forrester Consulting designed a composite organization and representative financial model, factoring in the applied cost and benefit data.

ROI and benefits

The results: for a 21,000 employee organization with a network of 7,000 Yammer users on a three-year license at list pricing, the study concluded that Yammer yielded a risk-adjusted return on investment (ROI) of 365 percent with a payback period of 4.3 months and $5.7 million in net present value.

According to Forrester, the next big opportunities for enterprise are: innovation, collective decision-making and better access to information and expertise across organizational and geographic boundaries.

Above is an overview presentation of the Forrester TEI of Yammer study, which highlighted these key benefits:

• Visible collaboration and communication leading to project cost savings from deduplication of work and reorganization of processes
• Improved employee productivity for engaged Yammer users due to information-sharing and better access to expertise
• Improving vertical communication between company leadership and employees
• Providing a public venue for and record of conversations
• Faster onboarding with an average of a ten percent reduction in new hire training costs

Specific efficiency improvements noted in the study include:

• An organization that discovered an 18-step process involving seven different systems could be streamlined to eight steps, saving 20 minutes per week for 650 agents while improving customer service
• An organization with a 12-person team shared a pilot program on Yammer, enabling seven other teams to repurpose the program without duplicating work – and saved 5,040 man-hours in the process

Learn more in our upcoming webinar

In light of these findings, we’ve invited Rob Koplowitz, Vice President and Principal Analyst and Michelle Bishop, Senior Consultant, to next week’s webinar entitled “The Business Value of Enterprise Social Networking”.  During the webinar, Rob will discuss the impact of enterprise social, while Michelle will present the study itself. Click here to register for our June 2nd webinar.

Great results, but ROI isn’t everything

While we’re proud of these findings and extend our thanks to Forrester Consulting, we also know this isn’t the entire story of what value Yammer brings to an organization. Yammer supports immediate coordination and ongoing communications, providing real-time access to information while preserving institutional knowledge. The value of Yammer is more than just numbers – it is grounded in usage: how a network is used to do what, by whom, with what kind of outcomes and benefits.

Given who uses Yammer to do what, Yammer’s value is multifaceted and usage varies extensively. Globally, there are over 100,000 companies in 165 countries with Yammer networks, from local merchants to F100s, North American startups to European multi-nationals, regional utility companies to international non-profits. They use Yammer to connect distributed workers, facilitate discussions, and find the right people and answers to solve problems. Organizationally, our user base spans CEOs and CIOs to seasoned executives and new hires joining the ranks fresh from college. They use Yammer to announce and syndicate strategic decisions, bring together and motivate teams, and better understand their roles in the company at large.

From working with this array of customers with diverse organizational and user needs, we’re learning that the value of Yammer is not just about calculating hard return. Each company and each user has a unique network experience, comprised of measurable and immeasurable benefits. Network engagement and growth statistics, Group and Community formation, tangible performance benefits quantified through metrics, these represent some of the measurable benefits. However, some benefits are difficult, if not impossible, to measure, yet they complete the story. These include the outcomes from cross-training, informal mentorship, behavioral modeling, and culture building. Some of the most compelling network stories our customers report are about employees helping each other, sharing achievements, and finding greater enjoyment in what they do because they feel more connected and have a better idea of why their contributions matter.

We’re learning that beyond the known benefits, the value of Yammer can come from the unknown. This TEI study revelas that Yammer can surface inefficiencies and roadblocks that hamper employees and companies as well as hidden pockets of talent and expertise. Yammer exposes new opportunities for growth and profitability, by giving unprecedented visibility into the systems and front lines of businesses and by prompting innovation and new ideas. In order to act, an organization must first see and understand, through a platform that offers open, transparent communications.

We’re also learning the value of Yammer is predicated on the quality and relevance of content: to fully realize Yammer’s value requires the fit of a network to what a company seeks to achieve – and to what each employee wants to accomplish. Yammer’s value story can be infinite in that regard, from saving an individual employee’s time to streamlining a process that impacts an entire company to providing the best possible feature set and network experience that optimizes usability for people everywhere.

While important, measurement only one way to show the value of Yammer. ROI is a great start – but only the beginning.

(But you should still join us for our webinar if you can)