Envious of ROI

A newly-published article on knowledge management began with the following example to illustrate why organizations should even bother with a KM program:

Siemens, the global telecommunications giant, recently won a $460,000 contract in Switzerland to build a telecommunications network for two hospitals in spite of the fact that its bid was 30% higher than the competition. The secret to Siemens success was its knowledge-management system. This system allowed Siemens people in the Netherlands to draw on their experience and provide the Swiss sales reps with technical data that proved that the Siemens’ network would be substantially more reliable than the competition’s.

I can’t remember seeing a public report of an instance where a law firm was able to document a success like this attributable to KM.** Can you? Is this because law firms are hyper vigilant about confidentiality and, therefore, don’t tend to talk about how they work? Or is it because law firms don’t have comparable success stories? Or worse still, what if law firms do have similar successes, but they don’t know it or don’t know how to document it?

While envy is rarely a good thing, I suspect most law firm knowledge managers would be envious of their counterparts at Siemens. I can’t say I blame them.

** To be fair, several law firms have impressive KM technology. What I haven’t seen is published evidence of the ROI resulting from those tools.

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2 thoughts on “Envious of ROI

  • June 25, 2008 at 12:31 am
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    Mary –

    Most KM technology in a law firm has a direct negative ROI. They usually save time and help you produce better work product. Saving time means less billable time and less direct revenue.

    We value KM in the law firm, because we think that saving time means that the bill is more collectible, increase client satisfaction, etc. But all of that is largely a guess. Just because the time is spent, it does not mean it is collectible.

    KM starts producing a positive ROI when we are dealing with “alternative” billing. For a fixed fee project, KM could show that it takes less time to do the project and therefore make it more profitable.

  • June 28, 2008 at 2:50 am
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    Doug –

    I understand what you are saying, but I still can’t help but believe that there has to be a way for us to capture and report the value resulting from our knowledge management efforts. Otherwise, we’re asking our colleagues to take on faith our assertion that our work is actually doing some good. That doesn’t seem entirely fair.

    – Mary

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