Calculating the ROI of documentation and knowledge bases

You likely already know that documentation is crucial, but have you ever stopped to consider the actual return on investment (ROI) of implementing a private, public, or mixed-use knowledge base?

Knowledge base software serves as the central hub for your documentation, and understanding the combined financial impact of documentation and knowledge bases can transform how your organization approaches information management.

Acknowledgment

The insights and methodologies in this article, including the Documentation Impact Calculator, were developed by Caity Cronkhite, the first CEO of Good Words, a technical writing and documentation consulting firm. (Ostin Zarse is the current CEO of Good Words.)

Drawing from her expertise and experience with diverse companies, Caity created the Documentation Impact Calculator to help businesses quantify documentation's impact on their bottom line. We thank Caity for her valuable work that highlights the critical role of quality documentation in today's business world.

Why leaders might hesitate on documentation

Despite documentation's foundational importance to operations across departments, many leaders view it merely as a necessary expense rather than a strategic investment that drives business growth.

One of the most persistent challenges in documentation work is justifying the allocation of staff and budget. Securing leadership buy-in often becomes a major hurdle—but why?

The answer lies in perception. Many executives view documentation as boring, burdensome, or simply a cost center. They struggle to connect it directly to business objectives and revenue generation. Documentation frequently evokes negative reactions from leadership, with some even questioning whether it provides any real value at all.

Beyond viewing documentation as a cost center, many leaders inadvertently relegate it to a side project or post-product task—something to be addressed after the "real" work is done. This misplacement in the priority queue leads to inefficient processes with extensive back-and-forth and documentation that's perpetually playing catch-up to product development. This approach ultimately costs more in developer time, support resources, and missed market opportunities than integrating documentation properly into the development lifecycle.

What many leaders do respond to, however, is financial impact—both in reducing costs and increasing revenue. This is where calculating the ROI of documentation becomes crucial to transform it from a perceived burden into a recognized business asset.

Understanding what leaders value

Now that we understand why leaders might hesitate on documentation, let's explore how to make it important to them. Remember, these decision-makers are stewards of organizational resources. To build a compelling case, you need to understand what truly matters to them.

Leaders typically care about:

• Upholding company values, culture, and morale - The foundational principles that guide the organization's identity and work environment
• Achieving company objectives - Meeting or exceeding annual and quarterly goals that advance the organization's mission
• Fulfilling personal aspirations - Leaders are more than their titles; they have individual goals and projects they're passionate about achieving in their roles
• Driving financial performance - Reducing overhead costs while increasing business growth, revenue, and market share

With these leadership priorities in mind, your task is to successfully advocate for investing in documentation by connecting it directly to what leaders value. The key is demonstrating how documentation supports—rather than competes with—these priorities.

But how exactly do you make these connections? The next section will explore practical strategies for building your business case.

Knowledge base types: Strategic choices for maximum ROI

The type of knowledge base you implement—public, private, or mixed-use—directly impacts both your documentation's effectiveness and its financial return. Each approach offers distinct advantages depending on your organizational needs:

• Public knowledge bases make content freely available without login requirements, ideal for customer self-service, SEO benefits, and establishing thought leadership. They also serve as trust signals for potential customers evaluating your product—accurate, up-to-date public documentation demonstrates reliability that can differentiate you from competitors. This approach maximizes reach while reducing support costs.
• Private knowledge bases restrict access to authenticated users only, which protects sensitive information while delivering value to specific audiences—whether internal teams or paying customers.
• Mixed-use knowledge bases combine both approaches, allowing strategic decisions about which content delivers more value publicly versus privately. This flexibility helps balance marketing goals with security requirements.

When calculating ROI, consider how your choice of knowledge base type affects your specific business objectives, from reducing support costs to protecting proprietary information or enhancing customer experience. The right approach should align with both your documentation goals and broader organizational strategy.

Building your business case for a knowledge base

With an understanding of what leaders value, it's time to construct a compelling business case that aligns documentation with leadership's priorities. Here's a strategic approach:

Connect with company values and vision

• Research your company's values, mission, and vision
• Ask yourself these key questions:
  • How does documentation directly support and advance the company's mission?
  • How does inadequate documentation undermine the company's values?

For example, if trust is one of your company's core values—a commitment to keeping customers in the best possible hands—consider how documentation impacts this promise. When customers encounter issues but cannot find accurate information or discover outdated resources, that trust is broken. Beyond simply undermining a company value, this erosion of trust has immediate business consequences: potential customers who can't verify your documentation's accuracy will choose competitors whose information they can rely on. Quality documentation directly supports customer trust and retention in a way that few other investments can match.

Align with organizational goals

• Identify the leadership team's quarterly and annual objectives
• Ask: How can documentation help achieve these specific goals?

For instance, if your company aims to increase engineering headcount, comprehensive onboarding documentation directly supports faster integration of new talent and improves retention of technical knowledge.

Consider also how proper investment in documentation as an integral part of the development process—rather than as a post-launch consideration—can significantly accelerate goal achievement. Documentation created alongside product development improves efficiency by reducing back-and-forth communications, prevents knowledge gaps, and ensures features are fully supported at launch. This proactive approach can dramatically compress timelines for new initiatives while improving quality across the board.

Appeal to personal incentives

• Research how your leadership team is evaluated and compensated
• Consider these questions:
  • What matters most to leaders as individuals? Does your COO prioritize operational efficiency? Is your CEO focused on expanding the user base?
  • How can documentation support their personal success metrics? Everyone in an organization is accountable to someone else. How might documentation help a leader demonstrate value to their superiors?

For example, if you discover that a leader receives performance bonuses tied to net income, position documentation initiatives as directly contributing to cost reduction or revenue growth to capture their attention and support.

Quantify the financial impact

• Determine how documentation (or its absence) affects your organization's bottom line
• While some might think documentation's impact cannot be measured, the following section will introduce a practical approach to quantifying its value.

Calculating the impact of your knowledge base

To make a compelling case for investing in documentation, you need to speak the language of executives: numbers. This is where the Documentation Impact Calculator comes in handy.

When quantifying documentation's value, it's helpful to think in terms of several distinct cost-benefit categories:

• Productivity gains - Time saved by employees who can find information quickly rather than searching or recreating it
• Support efficiency - Reduced support tickets and faster resolution times
• Onboarding acceleration - Faster time-to-productivity for new team members
• Revenue protection - Prevented customer churn and maintained market position through trusted information
• Market expansion - New opportunities created through better information accessibility

The Documentation Impact Calculator helps you put concrete numbers to these categories by calculating:

• How much money you're losing in employee productivity - Quantifies the productivity gains possible when employees can quickly find information instead of wasting time searching for or recreating it
• The potential revenue loss due to reduced productivity - Measures the opportunity cost when development and innovation slow down due to knowledge gaps
• Ongoing customer support costs - Calculates support efficiency improvements possible through better self-service documentation
• Revenue lost from customer churn or missed opportunities - Assesses both customer retention improvements and market expansion possibilities through better information accessibility

Rather than attempting to explain the calculation process in writing, we recommend watching Caity's "Making the Business Case for Documentation" presentation (starting around minute 13:02) where she demonstrates the calculator in action.

Quantifying the cost: A practical example

Consider Joe, a senior engineer at ACME Corporation. Seven months ago, Joe built an API that integrates ACME's product with popular third-party services. Due to tight deadlines, proper documentation was never created in the company's knowledge base.

Now that the API is live, Joe spends approximately two hours every workday answering questions from customer support representatives, fellow developers, and implementation specialists. These constant interruptions disrupt his workflow and reduce his effectiveness on his current project—a new feature expected to generate at least $15,000 USD in monthly revenue for ACME.

Let's calculate the financial impact:

• Lost productivity costs - Joe's annual salary is $120,000 USD, translating to approximately $60 per hour (based on 2,000 work hours per year). His daily two-hour interruptions cost $120, amounting to $30,000 annually.
• Support costs - The undocumented API generates 15 support tickets monthly, with an average handling cost of $10 per ticket—adding $1,800 in annual support expenses.
• Delayed revenue - If these distractions delay the new feature launch by two months, that's an estimated $30,000 in lost revenue opportunity.
• Customer churn - With an average annual customer value of $20,000, two key customers frustrated by the delayed feature release abandon the product, resulting in $40,000 in lost revenue.

The total annual cost of the missing knowledge base documentation? $101,800—nearly equivalent to Joe's entire salary. Had ACME implemented a proper internal knowledge base for their development team, this API documentation would have been accessible to all staff, searchable when needed, and continuously updated as the API evolved. Support representatives would have found answers independently, developers could have integrated with the API without contacting Joe, and Joe could have focused on delivering his revenue-generating feature on time.

This example illustrates how a seemingly small knowledge base gap can compound into significant financial losses, affecting everything from employee productivity to customer retention.

Real-world examples

For some real-world examples and use cases, check out Caity's "Making the Business Case for Documentation" presentation (starting around minute 16:09).

The hidden costs of poor knowledge management

Inadequate documentation creates significant hidden costs throughout an organization. Understanding the following often-overlooked consequences can strengthen your business case:

Lost employee productivity - When documentation is missing or insufficient, employees waste valuable time searching for information, repeatedly asking the same questions, or even recreating solutions that already exist. This diverts time and energy from their core responsibilities and results in inefficiency and frustration.

Reduced potential revenue - Poor documentation directly impacts revenue generation. Product development cycles slow down when teams struggle to access existing information. Similarly, sales teams hampered by inadequate documentation cannot efficiently support prospects through the sales process, which could cause deals to be delayed or lost.

Increased customer support costs - Inadequate documentation takes a toll on customer-facing operations. Without access to comprehensive information, support teams struggle to resolve issues efficiently. This leads to increased escalation to higher-tier support, longer resolution times, and higher support costs. Problems that could be solved through self-service documentation instead consume valuable support resources.

Customer churn - Perhaps most costly of all, poor documentation contributes directly to customer attrition. When customers cannot find answers to their questions, encounter outdated information, or face lengthy resolution times, trust erodes quickly. This is particularly damaging in competitive markets where alternatives are readily available—customers who can't be confident in your documentation's accuracy will simply move on to competitors whose information they can trust. This frustration often leads to customers abandoning your product or service—taking their lifetime value with them and potentially sharing their negative experiences with others.

Conclusion

Implementing a knowledge base isn't just about having better docs—it's about strategically investing in an information system that directly impacts your bottom line. Whether you choose a public knowledge base to drive organic traffic and reduce support costs, a private knowledge base to protect proprietary information while enhancing employee productivity, or a mixed-use approach that offers the best of both worlds, the ROI can be substantial.

By using the Documentation Impact Calculator, you can make a compelling, numbers-driven case for investing in quality documentation and the right knowledge base solution. This approach quantifies the financial benefits—from reduced support costs and faster onboarding to decreased knowledge loss and improved customer satisfaction—transforming documentation from a perceived burden into a recognized business asset.

With the right knowledge base implementation aligned to your specific organizational needs, you'll not only improve information accessibility but also create measurable returns that will make executive buy-in significantly easier to secure.