October 18, 2011

Convofy Returns $1,000,000 More Than Yammer

Yammer is on a remarkable run. Their adoption within enterprises has shown remarkable growth over the past year, and they have done a marvelous job of establishing the value of simple private social networks for organizations of all sizes. Yammer, and similar tools such as Chatter and Socialcast, appear to be ushering in a new era of improved communications and connectivity among colleagues. We at Convofy, which has comparable functionality (plus much more, as we’ll explain), are grateful to Yammer for opening up the new market.

Recently Yammer commissioned a study with Forrester Consulting, an arm of Forrester Research, examining the Total Economic Impact of an enterprise’s adoption of Yammer. For the study, Forrester conducted in depth interviews and analysis with four firms, and created a fictional composite of the four with which they performed their analysis. The study, called The Total Economic Impact Of Yammer, is available on the Yammer site.

The results are remarkable. The report quantified the benefits the following items to produce their verdict:

  • Avoiding redundant work
  • Optimized work processes
  • Improved collaboration and communication
  • Improved productivity
  • Faster onboarding, reduced time to productivity

The result, according to Forrester’s analysis, is that the total benefit of 7,000 enterprise users adopting a private social network like Yammer was around $10 million over 3 years. That’s a pretty remarkable number, and one that will further cause the world to notice the value of private social networks in improving productivity and lowering costs.

The article is inspiring, and a ringing endorsement of the value of private social networks.

It’s safe to assume that the benefits associated with Yammer also apply to applications with comparable functionality. But let’s take a look at how that number might grow if you add true collaboration capability to a private social network.

Communication vs. Collaboration

First, to clarify: Yammer (and Chatter and Socialcast) are excellent communication and connectivity platforms, and in many ways are far more effective than email in terms of end user productivity. However, like email, they are not actually collaboration environments – that is, places where the actual, on-the-page working together happens. Documents or links can be shared on these platforms, but actually collaborating on the work product happens elsewhere.

In fact, though private social networks improve the efficiency and effectiveness of communication, Yammer and its like also propagate one of the subtly frustrating aspects of email: they require the user to juggle multiple environments when working together on any form of digital material. There is a small but tangible cost to switching focus and context between one’s communication and productivity environments. There’s the measurable time element; and there’s also the cognitive cost of switching between contexts, where the user must re-orient him or herself in a new environment.

Switching Costs Quantified

Convofy avoids the switching costs because it is the only social network that provides in-context collaboration integrated with the activity stream. This means that when someone shares a document, an image, a video, and even a web link with you, not only can you view the item in place, you can also highlight, markup and annotate the item in place – without switching context to a new environment. Your colleagues will see your comments directly in the document, and within their Convofy activity stream – again, without having to load the document or web page in another environment. Your focus remains on the work at hand, not divided between the tasks required when managing multiple environments.

Reviewing this blog post – an example of in-context collaboration

So, in the style employed by Forrester, we took a shot at quantifying the costs of context switching versus the benefits from working in a single, focused environment like Convofy. The gory details appear at the bottom of this post, but using some simple, and conservative, assumptions we discovered that, for the composite organization described by Forrester, the context-switching cost of having your communications in a separate application from where you create and consume business content is over $1 million.

This quantifies in dollars the loss in productivity as well as the loss in clear communications.

The Million Dollar Value: Integrating Communications and Collaboration

It’s easy to recognize the sophistry of this (and any such) analysis. But the actual numbers are likely to be much higher than those represented. Context switching not only takes time, but also increases the chance for error and mis-communication, and adds to the user’s stress.

Convofy offers the remarkable and unique feature of in-context collaboration. It’s a state where your communications are fully integrated with the environment in which you create and consume content. There are no context switching costs, communications become much clearer. Instead of referring your collaborator to the text on page two, in the third paragraph, in the first sentence, you simply highlight the text in question, and comment on it. Your colleague in return simply clicks on the snippet as it’s represented in his or her activity, and is taken directly to the source.

So, if for many organizations private social networks are the evolution of connectivity and communications, then Convofy goes farther by integrating true collaboration, eliminating switching costs and delivering clarity.

And saving a million dollars in the process.

The Gory Analytical Details

Special thanks to Harry Klein (@CustEngagement) for pushing the idea of this calculator.

First, let’s use the same composite organization as in the Forrester report: 7,000 users within a company of 21,000 employees across multiple countries and more than $2.5 billion in annual revenue. Let’s also use the average fully loaded compensation used in that report: $85,000 per year or $40.87 per hour.

Now to measure the cost of switching. Context switching occurs whenever you need to manage your communication and actual work in separate environments. For example, you need to switch contexts when you receive a document attachment and need to load it in another application, or when you receive some other form of notification that refers to external content, say in a web site, where you have to locate and act upon the content in a separate environment (a browser). To complete the collaborative process, you then have to switch back to your communication app to convey your input.

Context switching happens when you communicate in a different place than you consume and create content. In an email-centric environment, this is so common that we don’t even notice the switching costs – either in time or in focus.

How often does this context switching happen? Let’s be very conservative and estimate that across all 7,000 users, the average person receives, digests and responds to attached or externally referenced content 5 times daily.

How long does it take to switch context, and re-orient in the other environment? The physical switching should be fast, even if you’re not a power user of the alt+tab switching method. Average time: 2 seconds.

Orienting yourself in the new environment should also be similarly quick, another 2 seconds.

Annotating, highlighting or marking up the external content? That depends on your technique, but you may need to switch between the content and some other environment for note-taking, or scribble notes on a piece of paper. Just tracking the task switching cost, again, you can add another 2 seconds with each new annotation. Let’s keep this conservative, and assume the average number of task switches while note-taking is 2, or another 4 seconds.

Now back to the communication environment – email or Yammer – and transcribing or attaching your notes. Let’s be optimistic and assume you’ve got your comments electronically and simply paste them into the new message. Still, switching back to the communication context will cost another 2 seconds. Re-orienting, another 2 seconds.

There are many more switches possible, and distractions or loss of focus due to the change in context, but we’ll overlook these for now. The minimum cost of context switching is paltry: a mere 12 seconds. This of course does not address the cognitive stress created by continual context switching, which presumably has other costs.

Also, consider the cost on the recipient of your feedback, which might begin like this: “On page two, in the third paragraph, in the first sentence, I think we should use a word other than ‘sophistry’.” Significant time is required to locate the reference for the comment.

So, the average employee goes through 5 collaborative processes a day, each costing him or her 12 seconds, at least. So on average each employee loses only one minute per day due to context switching. With 7,000 employees on Yammer, this adds up to 116 hours and 40 minutes per day. Using the average compensation number of $40.87 / hour, that means that context switching costs the company around $4,768.16 every day. Over the course of a work year of 250 days, that adds up to $1,192,041.

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