Wednesday, October 20, 2004

How to calculate ROI for intranet searchs

This combined hardware and software rack box is your next company' search engine, your Google in a box": The search engine inside is similar to Google's search site, aimed for the enterprise market. It runs on Linux operating system inside Intel box. (Apparently Google rolled it out in Europe last week

Designed for Intranet users, it fetch results in a format that is very similar to Google's SERP, including small excerpts and links to cached versions.

Want to give a try but can't find a way to convince your boss?

I've been talking about findability [French] on my French blog recently.

"[Findability is] the quality of being locatable or navigable. At the item level, we can evaluate to what degree a particular object is easy to discover or locate. At the system level, we can analyze how well a physical or digital environment supports navigation and retrieval."Morville

A lot a time is spent searchin' the web. A good corporate search engine should help prevent loosing too much time retrieving informations, especialy if it is for inside-the-firewall documents.

But how do you calculate ROI to be eable to buy a search engine?

Quite easy :

1. Let's say there is three categories of users. Heavy users; moderate users; light users.

2. Let's say category represents 20%, 30 % and 50% of the company. (these numbers are quite realist)

3. Let's put how long they look for information : 100 ; 50 ; 25 (let's say it is per year for each category of users).(average milage may vary.)

4. That's make for a 100 employees company, roughly for each category this much time spent (number of hour spent times number of employees): 2000 hrs; 1500 hrs; 1250 hrs. That's the number of hours per year spent looking for information in your 100-employee company.

To simplify the math, let's say all employees get a 50,000$ annual salary, that is a roughly 25$ per hour.

How much does it cost to look for information? That is 50,000$ for the first category(20employees x 100hrs x 25$/hr); 37,500$ for the second category; 31,250$ for the third category.

That's make 118,750$ per year

Let's put here a percentage of time saved with a good corporate search engine : 50% (that'a a guess). That's is a 59,375$ savings. Let's round it to 60K$ per year

You're now allowed to calculate the pay back period. My information told me that the low-end Google box start around 40K$ for a 2 year license.

That's rougly 3 months pay back period per two year. Now you can play with the numbers: time saving is half lower? double the pay back period. Employees receive 100K$/year?, cut in half the pay back period...

For knowlegde workers this is a good ROI proof to show to your boss. If Google is your primary internet tool, you might want it for your intranet too.

( I'm not affiliated with Google or any Search engine company )


Post a Comment

<< Home