Study: Enterprise IM Could Reap ROI in Days

A new study by the Radicati Group estimates that a 5,000-employee organization could save $37.5 million per year in productivity with IM.

IM is used in 85 percent of all enterprises in North America, but how many have actually bothered to measure its ROI? A new report from the Radicati Group titled "Measuring IM Productivity in the Enterprise" attempts to tackle the question of how to quantify IM productivity and its value in the enterprise.

"We believe very few have tried to quantify IM ROI in any rigorous/formal way. On the order of 10 percent only have tried to estimate this in their environments," Dr. Sara Radicati, President & CEO of The Radicati Group, Inc. told "Part of the reason is that there isn't yet a well known, accepted methodology for doing so."

In the report, Radicati analysts examined two IM usage scenarios in particular to help quantify the dollar benefit of IM usage: In the first scenario an employee is trying to discuss something with a coworker. The second scenario deals with communication with coworkers while on a conference call. For each scenario, the report lists how the communication is handled with IM and without IM. The report concludes that IM leads to significant and quantifiable productivity gains.

"By looking at time taken by employees to undertake two typical daily scenarios both with and without IM, we find that using IM can save companies an average of 40 minutes per user per day," the report states. "In a 5,000-employee organization, this results in $37.5 million per year in productivity savings."

Radicati bases its $37.5 million figure on its assumption of an average hourly wage of $41.67 per hour, or approximately $80,000 a year. It's also important to note that the productivity savings figure does not factor in the costs of security and regulatory compliance issues for IM. That said, Radicati still believes that even with those additional costs factored in, the ROI of IM is still favorable.

"However, since different companies invest/spend very different amounts on the security aspect so it's difficult to come up with a general rule of thumb as to how much security affects IM ROI," Dr. Radicati explained. "In general, we feel it will reduce the ROI (or actually lengthen the ROI period) but that companies would still see significant ROI improvements from deploying IM."

The report emphasizes that the real-time nature of IM is an essential component for the modern enterprise to succeed. Combined with presence awareness, IM allows for more real-time communication and quicker responses.

"To take advantage of a new business opportunity, organizations cannot always afford to wait until a coworker reads his/her email, checks a fax, or returns a phone call after checking for voice messages," the report states. "Increasingly, businesses need to connect in real time to move a project or activity forward."

Also among the "soft benefits" noted by Radicati analysts are improved employee satisfaction, better working relationships, and a more open and fun form of communication. Dr. Radicati however does not believe that the "negative" uses of IM (personal conversations and non-business communication) pose a greater threat than those posed by communication via phone or Internet in general.

"Basically the individuals that, let's say, abuse the phone for personal use during business hours are likely to also abuse IM for personal use," she said. "I think this really comes down to individual behavior, some employees are more considerate in their use of company time/resources and other are not."

Though IM is an extremely effective form of communication, the report's authors do not believe that IM will eventually replace other forms of communication.

"Today, the corporate world uses email regularly, but phone calls are still made, and faxes and letters still sent," the report states. "In the coming years, we expect IM to become another invaluable form of communication which saves time and resources and increases overall corporate productivity."

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