"The problem with Web 2.0 and Enterprise 2.0, of course, is that the benefits delivered are “soft” benefits; there are few examples of hard numbers to show ROI.
Luis Suarez shares a similar option about trying to calculate ROI for social software.
“If social computing is supposed to revolutionalise the way we share our knowledge, connect with others, collaborate, communicate and innovate, then I think it is about time we move into the 21st century, progress further in that Knowledge economy and try to figure out how to get the most value out of it, because figuring out its ROI, in my opinion, is going to be a waste of time, energy and resources.”
As modern humans and rational beings we are addicted to cause-effect relationships. Decisions based on intuition (experience) are always lower graded than decisions based on hard facts, even if they turn out to be the right ones. Improvements that happen, but where we cannot put the finger on what caused them are hard to accept as improvements (if you haven't read the book "Blink" by Malcolm Gladwell, you should).
Even if you can’t put numbers on what you expect to gain from using social software within an enterprise, you should be able to make a strong business case for it. The idea with a business case is to establish benefits and desirability of an initiative that aim to resolve a problem or grasp an opportunity. If the potential benefits can be argued to justify the costs of the initiative, why not go for it? It is easy to be fooled by facts, numbers and figures. They are often very convincing, but is there always a strong reasoning behind them? No, not when you look a little closer, behind the seemingly convincing figures.
To me it is obvious that the old way of organizing ourselves does not lend itself very well to how we need to work and collaborate in enterprises where information and knowledge are key resources. Hierarchy (bureaucracy) has been the dominant organization paradigm in the industrial era and still is, even if it is obvious that we need to organize ourselves into networks to collaborate and exchange information and knowledge efficiently. Social software present a golden opportunity for enterprises to move to the network paradigm as they have already proven to work outside of enterprises for establishing and nurturing social networks.