Tuesday 19 May 2015

Improving Documentation ROI: Part 1

There are many ways to improve your documentation ROI, so much so that this topic will be covered in multiple posts.  In the first of the series, I'm going to focus on calculating ROI and explaining why I'm using ROI.  Future posts will cover the basic areas in which you can improve your documentation ROI, and specific ideas and practises that can be used to achieve this aim.

ROI - Return on Investment - is a measure of the gains a thing brings you, against the cost of that thing.  In the case of documentation, ROI is predominately measured as the gains provided by a Technical Writer, against the cost of employing that Technical Writer.  The maths of ROI is simple, and as follows:

ROI = (Gain from Investment - Cost of Investment) / Cost of Investment

For example, If the Gain is £100 and the Cost is £10, the maths would be:

        100 - 10 = 90
        90 / 10 = 9

        ROI = 9

When calculating ROI, an answer of 1 is an ROI of 100%.  In the example above, the ROI would therefore equal 900%, which, you'll not be surprised to hear, is a phenomenal return. A more concrete and realistic example would be as follows:

Cost of hiring a Technical Writer, including tax, benefits, salary, etc: £50,000
Net Gain of hiring a Technical Writer in reduced costs and increased sales: £75,000

        (75000 - 50000) = 25000
        25000 / 50000 = 0.5         ROI = 0.5 = 50%

The percentage makes it easier to comprehend the reality of the gain  An ROI of £100,000 sounds fantastic compared to an ROI of £10,000, but if it cost you £50,000 to return £100,000 (an ROI of 100%), and only £1000 to return £10,000 (an ROI of 900%), it turns out that the ROI of £10,000 is 9x better. 

There are many other ways of calculating the gain of a thing, be it an employee, a machine, a piece of software, a marketing event, or anything else you can think of.  The Wikipedia article on ROI has some examples if you're interested.  I'm using ROI because a) it's simple to understand and calculate for those of us that aren't accountants, and b) ROI is a commonly-used calculation by non-finance professionals to work out the potential benefit of an investment before investigating that investment further.  This makes it ideal for anyone looking to persuade the powers-that-be to provide funding for additional documentation (or any other) resources.  Top tip: Speaking in the language of the people you are trying to persuade is often a pre-requisite for success in persuading them, and ROI is the language of a lot of decision-makers.

At this juncture it's probably worth explaining that things that can't be quantitatively measured are always, always, always harder to defend and/or justify than things against which you can put numbers. Although the lack of quantitative measurement is one of documentation's hard problems, I will try to provide possible ways of measuring ROI in future posts as I go through ideas and practises that you can use.  Some of these measurements will be more quantitative than others, so, for example, you can measure support calls before and after implementing a documentation improvement, and use those figures to measure the amount of time saved by your help desk against the amount of time it has taken to implement the improvement. 

However, some of the measurements will necessarily be less precise because they'll rely on estimates and sensible assumptions.  An example of this would be improvements that increase customer satisfaction or improvements that reduce the amount of time that your consultants need to spend looking up information.  This kind of measurement will be more or less precise depending on your company's attitude and approach towards measuring customer satisfaction or recording employee time.  But even if there is no formal measurement, you can, for example, ask a representative sample of consultants to give you an estimate of how much time they spend looking up information, and make the reasonable assumption that you can extrapolate that over the whole number of consultants.  You've then got a dependable baseline from which to start calculating your ROI.

Hopefully this series will help you both prioritise the work that gives you the biggest gains, and also persuade the people you need to persuade to back you with the resources you need to make a difference.

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