Getting your internal communications budget increased often depends on how well you can sell the financial benefits of the investment – and whatever it is you want to spend it on – to decision-makers. In this article we explore how to successfully demonstrate those benefits.
A little extra budget can go a long way, but convincing senior decision-makers such as CFOs to increase your internal communications budget isn’t always easy or straightforward, no matter how little or how much you’re asking for.
There are many factors that can impact whether those who make the decisions are even willing to consider approving your request such as the economic climate and business priorities involving other departments. But whatever challenges your organization is up against, its greatest asset to help overcome those challenges will always be its people.
With this in mind, ensuring you’re communicating effectively with your people, and that they can communicate and collaborate easily with each other is essential. So really, there is almost always a business case for increasing your internal communications budget. But that’s easy for us to say – we live and breathe internal communications. Getting those senior-decision makers on-board will almost always come down to three crucial words: return on investment (ROI).
Defining ROI and benefits to increase your internal communications budget
In our experience, for internal communications teams to get sign-off for a new investment, they need to demonstrate the potential benefits it offers to internal stakeholders. Let’s take a look at how you can go about this using an example we’re more than a little familiar with, and that’s investing in new intranet software to upgrade your employee experience.
Typically, you will have already identified problems within your organization’s digital workplace which have led to you seeking a budget increase. In this example, these problems may include poor internal communications software, lack of enterprise search, or a failing in-house intranet that offers no customization options or mobile experience.
Building an intranet business case
By requesting to increase the internal communications budget for new intranet software, you strongly believe that you can remedy some or all of these issues, but how can you prove that a new intranet will meet your objectives? This is where building a robust and convincing business case is critical.
Many business cases begin by outlining a range of soft and hard business benefits which align with how the organization measures success. The specific terms each organization uses will vary, but ROI is a commonly used term as it includes soft and hard returns.
Soft ROI benefits
Often referred to as qualitative benefits, soft ROI includes improvements that have no direct economic impact but are critical for good business. Digital workplace tools that help to raise employee satisfaction through social networking, or which improve employee experience through a seamless user interface, can be included here.
For our chosen example of an intranet project, typical soft benefits include:
- Increased productivity
- Improved engagement
- A more positive company culture with better employee wellbeing
- Increased employee advocacy
There are many different ways to measure aspects of these objectives, including via employee perception and activity. If the number of employees joining weekly company meetings increases by 50% after a sustained internal comms campaign using the intranet, it may be judged a success. With more attendees learning more about the company and their colleagues, employee engagement and experience may rise, resulting in better external advocacy and brand presence.
Building an intranet business case
There are a lot of variables in this scenario, however, and it can be extremely difficult to track them all. It’s certainly a world away from investing in advertising and then being able to track how many customers visit your website (and then go on to make a purchase) as a result. This is why hard ROI can be so compelling for the senior leaders who are the gatekeepers of that coveted budget increase.
Hard ROI benefits
Hard ROI is a simpler metric that organizations use to measure the performance of an investment.
According to Investopedia:
“To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.”
Hard measurements are often used for software that:
- Converts online browsers to sales
- Attracts new potential customers to a website or physical store
- Encourages subscriber expansion
- Increases the number of supporters for a charity or non-profit
Building an intranet business case
As has been outlined already, understanding the ROI of an intranet can be challenging because so much of its value may be seen as intangible. Intranets can improve communication, culture, and productivity, but having a metric for this is not the same as the number of new leads or converted sales generated by an investment.
While we believe that understanding and measuring both soft and hard benefits are crucial, we also know that being able to show the investment potential of an intranet, or whatever it is that you want to spend your increased internal communications budget on is important when presenting a business case.
Access meaningful data to increase your internal communications budget
Understanding soft and hard ROI is important but the value of effective internal communication and of the digital workplace technology that supports it must not be underestimated. It is not enough to focus solely on soft ROI, however, and projects should be measured with meaningful data. This is the language CEOs and other senior leaders understand and respond to.
If you find yourself struggling to work out the potential ROI or provide any meaningful data to present within your business case, don’t be afraid to lean on the vendors who provide the kinds of software and solutions you’re hoping to spend your increased budget on. Simply asking each potential vendor what ROI your organization can expect from the product can be hugely beneficial.
When you are able to present data and success stories together, you can show how critical internal comms is to the success of your organization. With this affirmed, you have a much higher chance of securing investment in your team and the tools you need for the future of internal communications.
A free resource for increasing your internal communications budget
We hope this has proven useful in helping to refine your approach to getting your internal communications budget increased. It’s probably not surprising that as an intranet software vendor, we have chosen to run with the example of increasing your budget to invest in a new intranet – it’s a subject we know plenty about after all. Our experience over the last 15 years has also helped us to devise an intranet ROI calculator that demonstrates the hard ROI benefit of an internal communications platform.
If you are ready to see your potential returns, please visit the ROI calculator and enter some simple data.