How a Social Intranet Can Contribute to the Bottom Line

iStock_000078145435_Double.jpgBusinesses make money in one of two ways: they either increase profits (top line) or cut costs (bottom line). The two aren’t mutually exclusive though; improving the bottom line leads to improvement in the top one. Similarly, impacting the top line tends to produce results in the bottom one.

moneygiphy.gifImplementing a social intranet can affect both the top and bottom numbers by raising productivity and efficiency, which grows profits and decreases costs. Here, we’ll look at a couple of ways a social intranet can contribute to the bottom line.

Efficiency

Efficiency is a product of streamlined and standardized workflows and processes. It mitigates bottlenecks and ensures people have the information and resources they need to do their jobs.

Social intranets help in this area by analyzing and fine-tuning day-to-day workflows. Employees have real-time access to data and expertise. They aren’t left “on hold”; they have actionable information that drives their work and the work of others forward.

Employee Turnover

Employee replacement can cost companies upwards of three times a person’s annual salary. It’s a problem, and it’s one being tackled by the HR department all the way up to the CEO.

They approach it through strong communication practices. Employees who are communicated with and engaged in the organization are more likely to stay. In fact, the Corporate Leadership Council (CLC) believes engaged organizations can reduce staff turnover by 87%.

Absenteeism

When employees don’t like their workplaces, they find all sorts of reasons to avoid it. They might take longer lunches, call in sick often, spend more time socializing with co-workers – they really are at the organization just to get a paycheck.

CoffeeSmirk.gifAll of that costs the company money. If employees are absent, they have to be filled with substitutes. That, or a co-worker who already has too much to do has to step in and fill the gap. The co-worker then is disgruntled and considers a long lunch or calling in sick, say, on Friday.

A social intranet can help combat absenteeism by building a community that employees want to come to on a daily basis. They hear from management about the company’s vision and understand their role in making it a reality. They belong here. As a result, employee absences decrease, reducing costs paid out and improving business performance.

Change Management

Change is the new constant in today’s business world. Employees are asked to be ever more agile and adaptable. It’s hard for them, no matter how accepting of change—and the technology that often comes along with it—they are.

This is where a social intranet can be truly transformational. It can be used to manage the change and strengthen the organization’s culture and engagement. The process requires more than tacking on a social intranet; a full-time change/project manager should be assigned to implement and manage it.

Project Completion Rate

Project management is critical to business performance and organizational success. However, a study by PricewaterhouseCoopers found that only 2.5% of companies surveyed successfully completed 100% of their projects.

Social intranets can change project success rates. They keep people focused on tasks, deadlines and objectives. The Project Management Institute has found that high-performing organizations waste about 13 times less money than low performers.

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Organizational Processes, Policies and Procedures

It’s hard for employees to follow company policies and procedures if they don’t know them. Unfortunately, the lack of knowledge can cost companies more than a handful of pennies.

A social intranet, via wikis and other documentation, can keep employees aware of existing processes and policies. They can be easily updated and shared with the organization, too, ensuring that people are aware of the most current processes and are following them.

Hierarchy

Traditional businesses typically use a meritocracy model. That is, decisions are made from the top down. It can be effective, but new studies find that flattened hierarchies can be more impactful to the bottom line and the company as a whole.

In a flattened hierarchy, management shares, rather than tells or orders. They engage with employees. Staff members are given opportunities to speak up. They also play a part in making decisions that affect the company, which results in benefits like increased engagement, loyalty and desire to do good work.

Company Valuation

A company’s valuation is tied to communication. According to a Towers Watson study, poor communication practices can impact the actual and perceived value of companies. Businesses with highly effective communication practices enjoy 47% higher total returns to shareholders, as compared to firms with ineffective communication.

Communication practices can take many forms, but a social intranet is an obvious one in today’s digital world. The intranet allows for real-time communication, unlike memos and emails. Employees are aware of changes in the business and kept in alignment with company goals. That’s a good thing when it comes to company valuation. Better communication means fewer losses, and fewer losses mean higher perceived and actual value.

Social intranets won’t solve all of a business’ problems, but they can contribute to a stronger bottom line. These tools help drive down absenteeism and employee turnover, facilitate open communication across the organization and streamline workflows, leading to greater operational efficiency. They also help teams close more projects, which isn’t just good for the bottom line, it’s beneficial for the top line, too.

Want to learn how a social intranet can help streamline your business? Check out the “Streamlining Your Knowledge Universe” eBook today.

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