Knowledge Management ROI Calculator

Based on the original by Richard Joslin (v3.7) · by Scott Tunn, v4.0 · interactive web edition. Defaults reproduce the worked example.

Total Investment

—

Implementation + ongoing (yr 1)

Total Annual Return

—

Sum of all annual savings

ROI — Year One

—

ROI — Year Two

—

Adjusted Return — Yr 1

—

Allows for implementation ramp & self-service delay

Adjusted ROI — Yr 1

—

Annual Budget Increase

—

Ongoing cost ÷ support budget

Employee Productivity Value

—

Additional value, not in ROI above

Support Center Baseline

Volume & resolution

Incidents per month

Contacts per monthCalls, emails, web requests, etc.

First contact resolution rate (FCR)

% incidents escalated Level 1 → Level 2FCR + this ≤ 100%

% incidents escalated Level 2 → Level 3Must be ≤ the Level 1→2 rate

Adjusted: FCR + Level 1→2 escalation can’t exceed 100%, and Level 2→3 can’t exceed the Level 1→2 rate.

Number of customers supported

Staffing dynamics

Weeks for new analyst to be productive

New Level 1 hires per year

Incident durations (work minutes)

At first contact

With follow-up by Level 1

Work effort at Level 2

Work effort at Level 3

Satisfaction (reference only — not used in ROI)

Customer satisfaction rating

Employee satisfaction rating

Operational Costs & Staffing

Costs

% of budget based on personnelIndustry average ~70%

Direct labor cost / analyst — Level 1Annual, salary + benefits

Direct labor cost / analyst — Level 2

Direct labor cost / analyst — Level 3

Burdened cost per employeeRelates to customer being supported

Actual headcount (FTE)

Analysts at Level 1

FTE analysts at Level 2

FTE analysts at Level 3

Staffing calculator (work minutes / analyst)

Weeks per year

Work days per week

PTO days (holiday / vacation / sick)

Development days (training / projects)

Work hours per day

Utilization rate (UR)

Occupancy rate (OR)

Adherence to schedule (AS)

Investment

Implementation costs (one-time)

SoftwareKM system, reporting tools, etc.

HardwareServers, storage, etc.

Training

Professional services

MarketingPromote change & adoption

PeopleTemporary staff augmentation

Ongoing costs (annual)

Number of added people

Burdened cost per added person

Software maintenance rate% of software cost / year

Hardware maintenance rate% of hardware cost / year

Other ongoing costsRewards, events, continuing education

Forecasted Improvements & Timing

Forecast (target after KM)

First contact resolution rate

% escalated Level 1 → Level 2FCR + this ≤ 100%

% escalated Level 2 → Level 3Must be ≤ the Level 1→2 rate

Adjusted: FCR + Level 1→2 escalation can’t exceed 100%, and Level 2→3 can’t exceed the Level 1→2 rate.

Weeks for new analyst to be productive

Incident duration at first contact (min)

Incident duration w/ follow-up L1 (min)

Work effort at Level 2 (min)

Work effort at Level 3 (min)

% of incidents resolved via self-service

Return timing

Self-service implemented in year?0 = never, 1 = immediately, 2 = one-year delay

Length of implementation (months)Must be less than 12

% of return earned during implementation

Employee productivity valuation

Work weeks per year

Less PTO & training (weeks)

Occupancy rate (actual work vs clock)

Baseline Analysis

Support demand by level (min/mo)

Cost per incident by resolution

Support demand (minutes / month)
Level 1 demand
Level 2 demand
Level 3 demand
Total demand
Budget & unit cost
Department budget — Level 1
Department budget — Level 2
Department budget — Level 3
Total support budget
Cost per incident
Cost per minute — Level 1
Cost per minute — Level 2
Cost per minute — Level 3
Cost per incident by resolution type
Resolved by FCR
Resolved by L1, not FCR
Resolved by L2
Resolved by L3
Monthly incidents by resolution
Resolved by Level 1
— of which on first contact
Resolved by Level 2
Resolved by Level 3
Suggested staffing (estimated)
Actual work min / month / analyst
Estimated analysts — Level 1
Estimated FTE — Level 2
Estimated FTE — Level 3

Return — Annual Savings

Annual savings by source

Return composition

Source	Annual savings	Capacity
Improved first contact resolution
Reduced Level 2 escalations
Reduced Level 3 escalations
Faster new-analyst productivity		—
Reduced FCR incident duration
Reduced Level 1 incident duration
Reduced Level 2 incident duration
Reduced Level 3 incident duration
Self-service (avoided incidents)
Total annual return

ROI Analysis

Investment vs. return vs. ROI

Investment
Implementation costs
Ongoing costs
Total investment
Straight ROI
Total return
ROI — Year One (return − investment)
% return — Year One
ROI — Year Two (return − ongoing)
% return — Year Two
Annual budget increase

Adjusted for ramp-up & self-service delay
Adjusted return — Year One
Adjusted ROI — Year One
% return — Year One
Employee productivity (not in ROI above)
Total time saved / month (min)
Total time saved / year (min)
Cost per employee work minute
Additional productivity value