Web 2.0: Cost saving & Revenue Increment

Yesterday I read Dennis’ white paper “The justification of Enterprise Web 2.0 Project Expenditures

To be honest, it was not a very easy reading for me, I’m not an expert about processes and project mangement… but it was interesting to think about Cost Savings aspects and consider Web 2.0 technologies infrastructural elements more than product or customer-specific tools.

“After all, it is not the technologies that support revenue increments or cost savings, it’s the business processes the technologies enable and support. If these business processes are highly generic, distributed across many different business areas… it makes sense to treat them as infrastructure expenses, in which case explicit revenue increment justification is not appropriate.”

This perspective is qite unusual for me because I work in a communication agency and Revenue Increments are often the main (only?) goals: probably too often. As a consequence we risk to underestimate many projects and possibilities (as well as the effective potential – and profitability - of some technologies): Cost Savings (of our client) could be a Revenue Increment (for us).

1 comment:

Dennis D. McDonald said...

Marco - thank you very much for the comments!

Sometimes I categorize projects into 4 categories:

1. Linked to revenue enhancement (usually the easiest to get funded if the relationship is real)

2. Linked to time and/or cost savings (which may or may not be linkable to revenue enhancements)

3. Linked to qualitative or non-quantifiable benefits.

4. Required by governmental regulations.

Sometimes, of course, project, initiatives, or systems can fall into multiple categories.

Dennis McDonald