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by Clare Brown on March 26, 2024
With the end of the fiscal year for many firms fast approaching, it’s time to reassess how you demonstrate your library and information service’s value. Fortunately - unfortunately? - with research demonstrating that workers can spend hours of their time tracking down internal information or colleagues that possess that information, it’s clear that there are ways to quantify your value when the time comes.
If you’re a department or team lead overseeing a knowledge management initiative, it’s important to be able to demonstrate the positive outcomes and return on investment (ROI) of knowledge management. Measuring and communicating ROI is especially critical during times of change or uncertainty when many businesses are adjusting priorities and looking to ensure the most cost-effective investments. How to measure ROI of your knowledge management? (2022)
There are two main approaches to consider, depending on what will work best for your organisation: The quantitative approach, and the qualitative approach. I conclude with some thoughts about a different kind of ROI - return on impact!
The quantitative approach
A quantitative approach is all about the numbers: for each dollar invested into current awareness management, how many dollars does the organisation receive in return?
To decide this, you must determine the total investment your firm has made into knowledge management. This includes staff time, paid resources, and current awareness platforms. Once you’ve figured out how much money goes into knowledge management (KM), you can decide on the appropriate Key Performance Indicators (KPIs) that assess whether your library and information service is meeting its ultimate aim.
Your internal processes should help you track which cases and clients your work has impacted. Once you tally the value of the business the library has impacted - for existing and new clients - you can use your total investment to come up with a dollar-for-dollar ratio that answers our original question: for each dollar invested in KM, how many does the organisation get back?
The qualitative approach
A qualitative approach is more about using specific examples, such as case studies, to illustrate the impact your library has on the organisation as a whole. Case studies are a powerful way of demonstrating your value, so it all comes down to talking to the right end user.
For instance, if your library’s proactive research uncovered information that allowed your firm to impress and ultimately win a client, that’s a clear indicator that your staff time and other resources are valuable to the organisation. In this case, you might even be able to attach that all-important dollar value to your case study: how much revenue does that client bring to the firm?
For example, a recent conversation with Lisa Paul at Ashurst highlighted the value of their library and information service to end users. She said,
A partner in the UK saw one of the Australian partner’s alerts and read an article of interest. They said, “that's a great opportunity”. They contacted a colleague and explained the potential piece of work. They won the client and got the fee.
A better approach to ROI - Return on Impact?
- Why should we implement a KM program?
- What are the benefits?
- How will it help our organization accomplish its key objectives?
- How will our organization improve as a result?
- How will our people’s needs, opportunities, and challenges be met?
He goes on to mention alternative thoughts on ROI. The quote that stands out to me is from Stephen Dale, who says,
Measuring impact can be just as important as measuring value. The impact might be things like improved customer satisfaction (measured using surveys), or less time to complete a task, or improved staff morale (measured using surveys). Any of these can – and potentially will – have an effect in terms of cash value to the organization, but I firmly believe that converting impact to cash value is an exercise in futility, since more often than not, the formulae and algorithms have too many variables. So, in terms of ‘ROI’, think ‘Return on Impact’ rather than Return on Investment when considering knowledge management strategies, and develop the strategy from the starting point of getting staff to justify the present status quo.
