Corporations are forever seeking ways to reduce costs and increase efficiency. But in the world of information technology it is often necessary to spend money in order to save money. Creating comprehensive corporate portals is a good example of this.
Though designing, building and maintaining a portal can easily run into the millions of dollars, the potential for savings also can be enormous, say experts. Yet the majority of companies that install them don’t calculate their portal’s ROI. In fact, 41 per cent of companies surveyed this year by Forrester Research Inc. (for a series of portal reports) are not even measuring the benefits, while another 20 per cent don’t know if their company is doing a formal ROI.
But measuring true ROI on a corporate portal is a little like gauging public opinion – the numbers are pretty much what you want to make of them, says Forrester. “Some of these vendors, like Plumtree and SAP for instance, are paying so much attention to pushing ROI propaganda that they actually have task forces now that they will send to your organization and draw up an ROI report for you,” said Nate Root, author of one of the Forrester research papers.
“In my estimation they are vastly overestimating the real ROI,” the Cambridge, Mass.-based analyst said.
But Root said that measuring a portal’s ROI is no easy task. “It is a tough technology to peg an ROI on.”
Ricoh Canada Inc. has used its portal to reduce paper waste and increase accessibility to information. Since the company’s portal solution is part of a beta test with TopTier Software (acquired this year by SAP AG), there is no cost associated with the implementation other than maintenance. Regardless, there are savings for Ricoh.
“Prior to the portal we used to print, on a bi-weekly basis, almost 500 reports…and then distribute (them) by hand,” said Paul Johnson, senior vice-president of operations at Ricoh in Mississauga, Ont.
He likens portal technology to a telephone system, in that companies will eventually treat it as part of their infrastructure. “No one asks you to justify the ROI of the phone on your desk,” he said.