Enterprise 2.0 ROI Case Study – (TD Bank Group)

This week I was tasked with answering the following question in relation to Enterprise 2.0.

Q – Question:
Identify and discuss an ROI case example.

ROI – what is it?
A profitability measure that evaluates the performance of a business by dividing net profit by net worth. – entrepreneur.com

ROI case study:
This case study of TD banking group shows an % ROI on social marketing. TD is the sixth largest bank in North America and serves approximately 22 million customers in four key businesses. Operating at a number, of locations in key financial centres around the globe.

Overview of enterprise 2.0 project:
Improve internal communications and collaboration whilst standardising business processes. And capitalise on its employees’ collective knowledge and experience.

Every marketer who manages social media, wants to understand how their efforts are demonstrating a return on investment.
As cited by Christine Crandell in “Real Examples of Social Business ROI“. Early social businesses say that when you deploy social, the place to start is NOT with your customers. But to start by replacing inefficient internal processes with social-based practices supported by technology.

Their solution:
Deploy IBM Connections software to create an employee-driven social business network. Features included profiles, communities, discussion forums, tagging and file sharing.

Note: none of this existed in such scale within TD group before the acceptance on this enterprise 2.0 project.

This ROI case-study on social marketing shows how a organisation successfully implemented with social technologies.

So where the benefits (gains) and costs of implementing social technology?

Tangible (hard) benefits:
note: tangible is something that can be measured/assessed.
– 5,000 communities formed.
– 1.6 million+ network connections made among TD employees.
– 81,000 employees have networked with at least one colleague.
– Staff have posted 5,800 blogs, 5,200 forums and 4,900 wikis.

Intangible (soft) benefits:
note: intangible is something that cannot be easily measured.
– enabler of more fruitful, interactive
communications among top executives and staff.
– functionality introduced made project teams much more productive.
– created communities lift people’s spirits and drive motivation and engagement energy.
– with easy access to the organisation’s, expertise can accelerate customer service. The bank can improve sales.

A look at TD’s ROI:
Numbers are from TDs’ 2013 Complete Report.
Note: For ROI, the tricky part is determining what elements make up your “return,” and what is your true investment.

Expenses: $15,042 million
Revenue: $27, 262 million

(ROI) Return on Investment Formula

(ROI) Return on Investment Formula

ROI = (($27, 262 million – $15,042 million) / $15,042 million) * 100

*ROI = 81.24%

*The figure above IS MY OWN CALCULATION. which maybe wrong.

Strength of TD’s ROI approach:
They had a clear target/focus, which allowed them to find a strong, suitable solution to ‘use social technology to improve intra- or inter-organizational collaboration and communication.’ – McKinsey social lever 9 from McKinsey Report 2012.

Weakness of TD’s ROI approach:
As this was not an investment to increase company profits. Instead, it was to improve internal relations/company culture. TD’s could have exhausted a lot of resources and money on implementing social technologies with no guarantee of success. Risky for such a large banking group, don’t you think?

Additionally, TD’s Vice President of social media and digital communications, Wendy Arnott mentioned within this report. That TD is committed to weaving social networking into everything we do and how we do it.” Perhaps not a weakness, but potentially a massive risk for this organisation. To rely so heavily on the integration of social technology within their corporate structure.

To round up. As TD’s ROI calculates to 81.24%, this means that returns have exceed costs. Highlighting their investment in social technology has proved to be beneficial to the organisation.

PS: Justin Yung did a great post about TD Bank Group as well. He explains ROI very well and uses estimates from a case scenario to calculate the ROI which is a welcoming alternative to my own calculations. You can view his post HERE.


References:

Herrera, F. (2013, January 19). Retrieved from http://enterprise-social-media.com/td-bank-group-gains-cohesion-with-social-business-software/

Schmidt, M. (2014, September 18). Retrieved from https://www.business-case-analysis.com/return-on-investment.html

Chu, M., Manyika, J., Bughin, J., Dobbs, R., Roxburgh, C., Sarrazin, H., … Westergren, M. (2012, July 1). The social economy: Unlocking value and productivity through social technologies. Retrieved from http://www.mckinsey.com/insights/high_tech_telecoms_internet/the_social_economy

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11 responses to “Enterprise 2.0 ROI Case Study – (TD Bank Group)

  1. Great article Andre! It’s very detailed. You’ve given a clear list of cost and revenge which aids in the calculation explanation:)
    Having ROI above 80% is really amazing! Showing it that it’s a good investment into the social technology.

  2. Hi Andre, I see you’ve taken a more realistic approach by using information from the annual report whilst I used more hypothetical figures. I like how you explained the concept in an easy to read format unlike mine which is more technical and may put people off. Overall great post!!!

  3. Pingback: How TD Bank Group Became a Social Business | The Great Blogsby·

  4. Great post Andre, I can see you’ve taken a more serious writing style with your blogs. The ROI of 81% is really good and shows their investement in social technology is a good one.

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