Justifying Taxonomy Projects: Taxonomy Boot Camp 2009

Justifying Taxonomy Projects Approaches for Calculating Return on Investment Getting the most from taxonomy, search and content processes

Leveraging Information Asset Investments Typical investments in information assets include: Content management infrastructure Portals, technologies for integration Time and energy spent organizing information Taxonomies, metadata standards, information architecture How do you get the most from existing investments? Improve search Improve usability Improve content processes

Content Supports Process Content by itself is not very useful Content applied to solving a problem is useful How do we measure the ability to solve a problem? What is the nature of the problem? What allows the problem to be solved? What impedes the ability of a user to solve a problem?

Increase customer satisfaction Expand offerings Develop new markets Customer Support Customer acquisition Engineering Library Knowledge base Marketing Collateral Alignment, linkage, measurement Product Development Grow top line revenue Content supports processes Working here (tools, technology, IA, taxonomy, search, etc) Measuring here (micro level - effects) Measuring here (macro level - outcomes) CEO- “Show me how this project will increase our revenue?” Copyright © 2009 Earley & Associates Inc. All Rights Reserved. www.earley.com 781-820-8080 Organizational Strategy Business Unit Objectives Business Processes Processes enable objectives L I N K A G E Content Sources Objectives align with strategy

Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Task 8 Task 9 Task 10 Ecommerce site – increased findability linked to increased conversions

Content Reuse If we can’t find something and have to create from scratch, not a value producing activity Being able to find an asset and apply that asset to solving a problem reduces unnecessary activities Proposal creation Consultants time can be measured, number of proposals, amount of time per proposal, etc. Single sourcing of technical documentation Create once, use in multiple locations Digital asset reuse If a photo or illustration needs to be purchased rather than reused, hard dollar costs

Stock Photo Reuse Central marketing service organization manages Digital Asset Management system System contained large amounts of stock photos – average cost $125 Cost of 10,000 photo inventory = $1.25mm Yearly downloads = 40,0000 Assume 50% usage 20,000 x 125 = $2.5mm Net direct benefit = $1.25mm Compliance benefits = reduced legal exposure from incorrect use of images, correct records management retention schedules

Average Reactive Time Per Incident (TPI) with knowledge not available (KNA) - 10.35hrs Knowledge Helpful (KH) Average Reactive TPI - 5.45hrs Knowledge Helpful Comparison to Average Time per Incident 5.45/9.6hrs = 57% Knowledge Helpful Time Saved Per Incident - 43% Call Center Efficiency

The Challenge of ROI Budgets are tight – pressure to show ROI in <12 months Significant investment already made, yet users complain Financial terminology and approaches seem arcane to IT (internal rate of return, net present value, discounted cash flow, etc.) Soft vs. hard measures, indirect vs. direct benefits “ Two-thirds of financial executives remain unclear about how to set IT spending levels or how to assess the business value of such spending. Only 6% of financial executives feel they have an IT strategy aligned with corporate goals.” Fifth Annual Survey, Technology Issues for Financial Executives

Business Investment Drivers Efficiency - Cost Savings Doing the same job faster, cheaper, or with fewer resources than it was done before Edge - Return on Investment Changing some aspect of what the business does, resulting in growth, increased revenue, mitigation of business risk, or other strategic advantage Effectiveness - Return on Assets Doing a better job than the one you did before, making other resources more productive and increasing their return on existing assets and attainment of mission

Common Pitfalls in Specifying ROI Not knowing the expected payback period Finance may only be approving same-year ROI projects Investments in infrastructure Increased revenue can arise from a number of factors, more difficult to attribute causality Information asset value varies (quality, type, applicability to process, target audience) No single approach can account for value

Framing the ROI Discussion What do you mean by ROI? Is it a formal measure or informal impact? What can be currently measured? What measurement baselines are in place? How can you project benefits? Pilot, proof of concept, simulation Usability studies Search metrics Content process quality Subjective measures consistently applied User satisfaction

Understand and Defend Your ROI Analysis: Investment analysis with direct financial impact If we invest $1mm in _________ it will provide new capabilities that will have a measurable financial impact on: New revenue streams Reduced costs Analysis of various metrics with indirect financial impact Customer satisfaction Asset quality Customer retention Employee productivity Time to market “ 49% of survey respondents said that finding the information needed to do their jobs is ‘difficult and time-consuming’ - 55% averaged 4 hours per week and 24% spent 8+ hours per week looking for information.” AIIM, July, 2008

Create a Compelling Cost Justification Need capabilities whose benefits are difficult to quantity – look for hard business numbers New methods for doing business – models not established, e.g. reusing content from a travel book and sending to cell phones as “travel tip of the day” Focus on direct cost reduction, better return on existing assets, business benefits with competitive edge “ An enterprise with 1,000 knowledge workers wastes $48,000 per week – $2.5 million per year – due to an inability to locate and retrieve information.” The High Cost of Not Finding Information, IDC

Taxonomy Benefit Examples ECM Taxonomy Framework Reduced IT cost for unified information architecture development Reduced cost of deployment for successive migrations (taxonomy development, content tagging, governance) Increased operational efficiency and search accuracy Unified business process context for content drives increased enterprise agility and strategic BI visibility Records Management Taxonomy Reduced labor costs for retention classification Reduced administrative support costs for records tracking and retrieval Increased effectiveness of Legal Department for records retention policy enforcement Mitigation of business risk for legal discovery compliance

Information on content management strategy Free webinars White papers and research Contact: Seth Earley President, Earley & Associates, Inc [email_address] 781-820-8080 www.earley.com Register at www.earley.com and download: Topics include: Content analysis Taxonomy and metadata Search and search integration Content lifecycles Earley & Associates is now offering the AIIM Information Organization and Access course.

Core Capabilities Document/Content/Management: Strategy and requirements planning Taxonomy, Metadata, Object modeling Audit and analysis Migration Tagging and indexing Lifecycle and workflow planning Technology selection, RFP development Governance Taxonomy & Metadata: Taxonomy strategy Taxonomy development (for e-commerce, faceted search, ECM, DAM, enterprise taxonomy, thesauri) Taxonomy evaluation and testing Taxonomy implementation Taxonomy governance and training Taxonomy tool selection Metadata standards development Metadata schema design Metadata governance Digital Asset Management: DAM strategy DAM taxonomy DAM technology evaluation Asset lifecycle management Marketing resource management (MRM) Information Architecture/Usability: Usability studies (site, navigation, taxonomy) Wireframes and IA design Search: Search audit and user testing Search strategy and ROI analysis Taxonomy for faceted search and search optimization Search deployment Search and business intelligence Search tuning and SEO Search technology evaluation/tool selection

Justifying Taxonomy Projects: Taxonomy Boot Camp 2009

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