Establishing the return on investment for information and knowledge services

Abstract

It is vital that information managers are able to demonstrate the added value of information and knowledge services for their organizations. Establishing the Return on Investment (ROI) of these services requires a clear understanding of the basic structure of intellectual capital and, when communicated, an ROI can provide further evidence of the strategically important role played by information managers in the business models of their organizations. The research that takes place to establish the estimate of the ROI is based on identifying and surveying knowledge workers, using a mix of questionnaires and in-depth interviews. By outlining a five-step approach we show how a map can be made of an organization's information environment and how this can be used to measure returns in specific values, differentiated over all areas of an organization's activity. A structured approach is described to derive the final valuation of the information and knowledge services, and their management, using the themes of quality, character, management style, and shelf life. We also show how to develop a marketing and communication plan for information and knowledge services, and the role this plays in providing evidence of ROI. The importance of information managers clearly understanding the core processes of their organization and its key steps is emphasized, and an explanation given on how to identify the benefits that information and knowledge can bring to these processes. We also show how benchmarking is used in ROI and how an information department can monitor its client base. Finally, we describe how to prepare an ROI plan of action.