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Justifying Taxonomy Projects: Taxonomy Boot Camp 2009
 

Justifying Taxonomy Projects: Taxonomy Boot Camp 2009

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Presented by Seth Earley at Taxonomy Boot Camp 2009

Presented by Seth Earley at Taxonomy Boot Camp 2009

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  • ------------------------------------------------------------------------------------------------------------------------------------------------------------- DIRECT BENEFITS Start-up Year 1 Year 2 Year 3 Totals Direct labor cost savings Reduced LOB labor costs for retention classification 0 312,500 312,500 312,500 937,500 (2 days/yr) * (# of LOB employees) * (LOB employee $/hr) Reduced administrative support costs for records tracking and retrieval 0 13,438 13,438 13,438 40,313 (12 days/yr) * (# of LOB admins) * (LOB admin $/hr) ------------------------------------------------------------------------------------------------------------------------------------------------------------- TOTAL DIRECT BENEFITS $0 $325,938 $325,938 $325,938 $977,813 ------------------------------------------------------------------------------------------------------------------------------------------------------------- INDIRECT BENEFITS Start-up Year 1 Year 2 Year 3 Totals Improved technology management Reduced IT cost for unified information architecture development 0 31,250 46,875 15,625 93,750 (30 days/yr) * (# of LOB systems/yr) * (IT employee $/hr) Reduced cost of deployment for successive LOB migrations 0 65,200 97,800 32,600 195,600 ($32,600) * (# of LOB systems/yr) Improved technology asset return Improved return on assets for more effective deployment of ECM/RIM SW 0 10,000 10,000 10,000 30,000 ($10,000/yr) Improved process management Increased efficiency and accuracy for Workers’ Compensation LOB 0 117,188 468,750 468,750 1,054,688 (30 mins/day) * (75 LOB employees) * (LOB employee $/hr) Increased effectiveness of Legal Department for RM policy enforcement 0 11,719 23,438 23,438 58,594 (1 hr/day) * (# of Legal staff) * (Legal counsel $/hr) Increased enterprise agility and strategic BI visibility 0 0 146,484 244,141 390,625 (4 hrs/wk) * (# of LOB systems) * (3 mgrs/LOB) * (LOB manager $/hr) Improved risk management Mitigation of business risk for legal discovery compliance 0 12,500 12,500 12,500 37,500 ((8 days/yr) * (2 Legal staff) * (Legal counsel $/hr)) ------------------------------------------------------------------------------------------------------------------------------------------------------------- TOTAL INDIRECT BENEFITS $0 $247,856 $805,847 $807,053 $1,860,756 -------------------------------------------------------------------------------------------------------------------------------------------------------------

Justifying Taxonomy Projects: Taxonomy Boot Camp 2009 Justifying Taxonomy Projects: Taxonomy Boot Camp 2009 Presentation Transcript

  • 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
  • Projected Value of Benefits
    • 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
    •