Maximizing ROI - Building a Business Case for a Knowledge Base

When making any purchase decision, there are two primary questions you need to ask, "How much does something cost?" and "How much benefit will it give in return?". At a high level, those are all you need to answer to determine the potential return on investment, or "ROI". Whether the decision is buying a new pair of sneakers, or an enterprise level software solution, the logic is the same. There are also some secondary questions you need to answer, such as "Can I afford it?" and "Would something else provide more benefit for the same cost?", but answering the first two questions tells you whether something is worth its price tag.

On the corporate side, these questions/answers form the basis of any business case. The more complete and accurate the answers are, the better the business case is, and the less risk you and your company face when a purchase decision is made. Likewise, the more you know about the costs and benefits of an item, the better the business case will be. For this post, I'll be looking at some of the potential costs/benefits of deploying a knowledge base, specifically around a customer support channel (phone, email, etc.).

Costs

This is probably the easiest part of the equation, but don't be fooled into thinking this is just the licensing or development cost of the knowledge base software itself. There are some other inherent costs to implementing any knowledge base that should be considered. Here are a few items to consider:

How much does the software cost?

This may or may not be the largest part factor in the overall cost. Software costs can vary wildly when it comes to knowledge bases, but paying more doesn't always mean getting more (or vice versa), so it pays to shop around. The best approach is to look closely at the features/flexibility/scalability that different solutions offer, and measure those against  what you really need to get the best mix of cost and benefit. In some cases, it may make sense for a company to spend several hundred thousand on a custom-built solution. In other cases, an off-the-shelf offering may give you all you need for much less. Getting the most benefit at the lowest cost maximizes your return.

Will it require environment changes?

Does the software require its own unique environment or OS? If so, can your current support staff manage it easily? Will the size/scope of the knowledge necessitate adding new hardware? Obviously, the ability to work in an existing environment and on existing hardware would negate most of these concerns, but you might be surprised how often this is overlooked when doing initial cost estimates.

How much will it cost to populate the knowledge?

The cost here is directly related to how the knowledge content is populated. This may range from a few extra seconds on a support call, to importing vast amounts of data from some existing storage location. Intelligently integrating the population of content into normal business workflows can minimize some of these costs, and this will usually. There are also some directly offsetting benefits, such as issue tracking and time savings, but I'll get into those in a minute.

How much does it cost to actually use the knowledge?

This is more of a minor point, but a poorly functioning knowledge base could actually cost you some money. How many times have you called a company for support only to have their representative say "May I put you on hold while I look that up?", or "Hmmm. I don't see anything on that issue. Let me try looking for this a different way."? These can be signs of poorly designed software, or an inefficiently organized or incomplete knowledge base. Either way, it equates to increased costs for the company providing the support. You can minimize these issues by making sure a solution functions well for the targeted end-user, provides flexibility in how it can be used, and that the content in the knowledge base is well organized and indexed (ex. search + browse, tagged content, etc.).

Benefits

Ok. Now it's time for the exciting (though slightly harder) part. Let's talk about benefits! The whole reason anyone is willing to incur the cost of something is that they believe that it is worth more to them than its cost. While cost can be straight forward, It can be difficult to quantify benefits at times. This can be especially true if you are not familiar enough a product to know what all of its benefits are. For knowledge bases, the benefits will largely be based on how you use it. While the most common use case is developing a knowledge base for customer support purposes, there are plenty of other applications, such as knowledge repositories for research, or even social networks (think Wikipedia). For this example, I'll be focused on the support aspect, so here are some benefit-related questions to consider:

How many (and which) support contacts will this eliminate?

If a support knowledge base is made customer-facing, it has the potential to actually eliminate some support contacts, and therefore directly reduce support costs. While this sounds great at a high level, estimating how much of a cost savings it will produce can be difficult. I find it's helpful to try and break bigger questions like this into a few small ones. For instance, "What percentage of our inquires could potentially be addressed online?". If you can get an idea of how many of your support contacts are related to new, "one-off" issues vs. solving repetitive issues, you can get a decent idea what percentage could be addressed if your company's solutions to existing issues were made available directly to users. A related question to ask is "Which specific support issues would I be addressing?". While you may estimate that 70% of issues could be addressed via a customer knowledge base, do those issues that take up a little or a lot of your time? If your primary repetitive contact drivers are quick resolutions, you may not be reducing actual contact time by the same percentage. On the other hand, if you find that a lot of time is spent addressing the same complex issues, you could see more savings. It helps to estimate support contacts eliminated and average cost for those contacts to get a good idea of what savings you can expect.

How will support costs be reduced?

When you leverage a knowledge base to provide internal support consultants with solutions to customer issues, you need to change the equation slightly. Rather than preventing initial support contacts entirely, the focus should be on the benefits derived from reducing the length of support contacts, and reducing the number of contacts required for resolution. Contact lengths can be reduced by eliminating the need to research repeat issues when they have previously been solved and added to the knowledge base. Providing a centralized support framework creates continuity of support, which can reduce repeat calls by enabling structured resolution flows. Reducing repeat contact rates will generally offer the most upside, since you are reducing an entire interaction. Depending on how your support organization currently functions, this may have additional benefits, such as reducing unanswered calls, or shortening long wait times. Don't forget to take into account the benefits to new employees as well. Having a centralized repository for this type of institutional knowledge means new staff can be more efficient from the start.

What effect will this have on my company's brand/image?

By far the hardest item to quantify, you still shouldn't overlook this benefit when building a business case. Increased resolution rates and providing self-service support options can go a long way to creating a positive customer experience, and thereby increasing customer loyalty. Centralizing support solutions also creates a uniformity One approach here would be to estimate the number of customers lost due to current support issues that you think you can address (ex. less unanswered support calls, or shorter response times), and place some value on those customers. As most companies have figured out, it is cheaper to keep the customers you have than it is to acquire new ones.

What secondary benefits could this provide?

If you expand your view beyond the primary business needs for a knowledge base, you are likely to find additional benefits. For instance, by using a centralized knowledge base, you may be able to better track support contact drivers by looking at article usage. This in turn could help prioritze product improvements that decrease or eliminate those support drivers.

Summary

Knowledge bases are valuable tools that can be used to help address specific business needs. If you focus on what you are trying to improve using a knowledge base, you should have a pretty good shopping list for the features you need, and you should be able to create a compelling list of benefits. Once you've got your list of costs and benefits done, assign values to each. If some items are too big to estimate, try breaking it into smaller bits and estimating those. A lot of smaller, more specific guesses added together are usually more accurate than one big guess anyway. Once your lists have values, just add up the benefits, subtract the costs, and your business case is complete. If you don't like the outcome, don't forget, you can effect both sides of the equation by finding a solution that maximizes benefit at a minimum cost.

I hope this helps. If you have any additional thoughts on the subject, or think I've left out any important details, please leave a comment and let me know. Also, if you're thinking about deploying a knowledge base in SharePoiint, and haven't already looked at it, be sure to check out Bamboo's own SharePoint Knowledge Base Solution Accelerator.