The Value of Collaboration #4: Reducing the cost of internal communications

How much does your intranet cost? The Intranet

In addition to the core infrastructure, add all the different applications - content management systems, Sharepoint, blogs, wikis, etc. Then add the engineers that customize the tools to make them look like modern websites. Then add the people dedicated to producing the newsletter and e-zines and other corporate content.

How much does all of that cost? You probably have no idea.

It turns out that most large firms can comfortably reduce their total intranet spend by $3 million to $7 million if you effectively use modern social platforms and practices.

The problem

In an era where anyone can cheaply and easily publish their own book, ebook, or blog - where even the best newspaper are cutting costs while citizen journalism is on the rise  - most firms are spending far too much money on tools and specialists dedicated to communications.

If I want a beautiful, mobile-friendly, professional website complete with social features, analytics, and more, I can create one in a few minutes for free. Maybe add a few dollars a year to eliminate ads or select a premium design.

Now try and do that at work. You’ll be pointed to a variety of poorly integrated tools, most of which will require customization to have basic features like comments and customizable pages. And that customization, multiplied by 100s or even 1000s of websites, adds up. (A popular statistic, cited here and here, is that for every dollar a firm spends on Sharepoint licenses, they spend $6 to $9 on customization.)

Worse, there are a lot of people involved in producing and governing content. Traditionally, we’ve relied on dedicated communications professionals tell employees the news of the organization. They’re often gatekeepers, too, deciding whether you’re even allowed to have a presence on the intranet. Now, though, the news spreads much more quickly and cheaply, and Communications departments must either be smaller or change what they do.

The solution

The solution involves replacing traditional intranet tools with a social platform and replacing traditional Comms practices with a greater reliance on employees publishing and sharing information.

A modern social platform makes self-publishing at work as easy as it is at home. They tend to support a wide range of content (sites, documents, video, photos, blogs, discussions). Search works extremely well. And the best ones have social and mobile features as core elements of the platform. In all the benchmarking we’ve done, almost every firm that introduced a modern platform has eliminated old tools and greatly reduced their use of dedicated staff or design firms for customization.

And when it comes to content, you may still need people to craft the latest org announcement or news about quarterly earnings. But, since around 2008, people have increasingly relied on social filters for their news rather than professional curators. It’s the popularity and ease-of-use of social platforms that are the cause of that shift.

When everyone can publish, the information flow in your organization can be more relevant, more real-time, and cheaper than ever before.

What’s it worth?

The reduction of communications costs comes in 3 areas.

Consolidating the intranet: Firms I’ve spoken to have eliminated up to a dozen or more  applications and hundreds of websites. That reduces software licenses, hardware, and engineers who develop and support the tools. In all cases I know of that have pursued an intranet consolidation strategy, the savings exceeded $1 million.

Customization: This is one of the most insidious and often the most poorly-controlled costs because it’s typically found in pockets throughout the firm without any central oversight. Combined, my estimate is that large firms spend between $2 million to $10 million on intranet customization by staff and by 3rd-party design firms. (My own group, for example, once spent over $100,000 customizing Sharepoint to support our communities of practice. I’ve heard of internal sites at some firms costing 5x or even 10x that amount. And a large firm might have 100s of groups doing customization of some kind.)

The era of spending large sums tweaking intranet sites should be over. Firms should slash their customization costs by at least 50% for savings between $1 million to $5 million.

People editing content: Perhaps the most contentious and political category is the number of people producing official content and governing the intranet. Of course, most  Communications departments do far more than this. But a considerable subset of what they do is “focused on the announcement of management conclusions and the packaging of management thinking into messages for mass distribution to the 'troops'".

Adding up all of the work related to this subset could easily equate to 50 people across a large firm. And this should be reduced by at least 20%. Assuming a fully-loaded cost of $100,000 per person, that’s another $1 million in savings.

Why doesn’t everyone do it?

The biggest barriers seem to be control and fear. The people who own their particular tool or website cling to it as part of their value to the firm. And it’s the rare person who actively seeks to reinvent their job while trying to keep it.

But even communications professionals recognize the need for change, as described in this useful post entitled “The Internal Communications Department of the Future” by a former Communications head:

 “No longer can we afford to (only) cascade messages down from the top. Our organizations have become too complex and too slow to rely upon such an antiquated method. We need to be more nimble, transparent, and inclusive."

He then points out that the story can be about more than cutting communications costs. It can be about changing the very work of Communications to make it more useful and meaningful:

"...Even though I advocate a future where everyone is a communicator, communications professionals still have a pivotal role to play: helping others, throughout the organization, to become better communicators, and highlighting the best of employee contributions, while also reinforcing key messages around strategy and values. Such reinforcement aids in prioritization, so that scarce resources are more productive on the right things.”

In addition to saving millions, such a change would be good for the firm and all the people in it.