ROI Comparison: kLogs vs. Intranet Portal Software

Portal ROI based on a document produced by Plumtree Software
Knowledge Blog ROI based on third party analysis
Assumes a 5,000 person organization, although the numbers can be scaled up or down accordingly

Portal Costs:

Portal license: $2,000,0000 ($400 per desktop for the core package)
Hardware: $110,000
Collaboration and portlet development tools: $675,000
Operational costs: $1,250,000 (very expensive admin)
TCO over one year: $4,035,000 for 5,000 desktops or $807 a desktop

Portal benefits:

Lower cost of delivering web front ends to business apps: $1,200,000
Lower cost of adding a web front end to business apps: $1,050,000
Large document publishing via portal lowers costs of publishing via e-mail: $56,000
Lower extranet, directory, and Intranet management costs: $1,038,000
Lower training costs due to portal integration: $1,800,000
Efficient information delivery lowers compliance costs: $432,000
Collaboration improves project effectiveness: $300,000
Elimination of paper-based distribution of corporate media: $800,000
Employee self service: $182,000
Customer and partner self service: $80,000
Increased productivity via a single Web interface: $2,500,000
Net benefit: $9,342,000 or $1,886 per desktop.

Total ROI of a traditional Portal system:

240%, not bad.

Knowledge Management Blogs Cost (high end estimates):

Software license: ~$250,000 ($50 a desktop at the high end -- using a variety of vendors as models).
Hardware: ~$60,000
Custom blog portal development: ~$100,000
Operational costs: ~$300,000
TCO of a blog system over one year: $710,000 for 5,000 desktops or $142 a desktop (a well run project could probably cut this to under $75 a desktop).

Knowledge Blog Benefits:

Lower cost of delivering web front ends to business apps: $1,200,000 (100%, this can be done by personal blog systems by template control and self editing of navigation links).
Lower cost of adding a web front end to business apps: unknown (a portion of this could be accomplished by using the low cost CMS that the blog system is built on, but I will count this as a zero for sake of argument).
Large document publishing via portal lowers costs of publishing via e-mail: $56,000 (100%, self published files with human understandable version history is easy via a blog system)
Lower extranet, directory, and Intranet management costs: $1,038,000 (100%)
Lower training costs due to portal integration: $1,800,000 (100%, I would argue that a blog system is even easier to train an employee on than a portal package since this is a system that is in wide use on the Web).
Efficient information delivery lowers compliance costs: $432,000 (100%, through both RSS and blog publishing)
Collaboration improves project effectiveness: $300,000 (kLog networks include discussions, comments, e-mail bulletins, trackback, RSS, and more for collaboration)
Elimination of paper-based distribution of corporate media: $800,000 (100%, RSS -- including enclosures -- and blog publishing)
Employee self service: $182,000 (100%, information and application access is even more under the control of the individual employee in a blog network, and therefore more able to radically enhance power users -- which typically are some of the most productive employees)
Customer and partner self service: $80,000 (100%)
Increased productivity via a single Web interface: $2,500,000 (100%, easily done through template control and integration of web front ends with employee weblog interfaces).
Net benefit of a blog system: $8,292,000 or $1,658 per desktop.

Total ROI of a knowledge management blog system:

1,170%, really good.

** The content on this page is not completely our own. It has been collected in emails and blog entries throughout the years. Unfortunately, the sources of much of the information have been lost. If you were the primary author of any of the content here, please do not hesitate to contact us... we'd be glad to give you credit for it and we apologize in advance for not doing so already. It's our fault for not collecting references over the years.