Gaining Management Support
Ann Rockley, The Rockley Group, Inc.
Identifying the Components of your ROI
Identifying Return on Investment (ROI) for your content management business
case begins with a thorough analysis. This article reviews the information
you need to gather to identify ROI for an effective business case for content
We are frequently asked to calculate return on investment for organizations
wanting to implement content management. This task is made very difficult
if you haven't done an analysis of your current costs, needs, and goals. Putting
together an ROI requires that you analyze the issues you are currently facing,
identify the opportunities you could realize by implementing a content management
strategy, identify the goals that content management can help you to meet,
then gather metrics that compare your current costs against the costs of implementing
a CMS and the savings a CMS can help you to realize.
Analyze the issues
Analyzing the issues means taking a hard look at your organization.
Identifying your issues helps you to determine the costs to your organization
resulting from problems with your technology or processes. Every organization
has issues. As tasks evolve, as workload increases, or as the market changes,
processes that used to work no longer work. For example, one organization
we worked with, we'll call them Corp ABC, learned that their marketing group
maintained one set of content for traditional marketing delivery (e.g., newspaper
and direct mail), the web team maintained another set, and customer support
maintained a third. This came to light when during a recent information campaign,
customer support had insufficient information, sales staff were confused,
and because of inconsistent pricing information, costs were excessive for
some contracts. They estimated the costs of the inconsistent and confusing
information and extrapolated it across the previous year and upcoming year's
planned product releases. Quantifying the cost of issues in this way is extremely
helpful in determining your ROI.
Unless you can clearly state how a unified content strategy and content
management will help your organization reduce time-to-market, reduce costs,
increase productivity, or whatever specific goals you have defined, you cannot
effectively justify it. What are the goals in your organization? Can you quantify
them? Your goals may be related to your opportunities; in fact, many of your
opportunities can help you to create specific goal statements. Determine goals
by examining strategic plans, and by asking key people what their specific
goals are for the coming year. It is important to have long-term goals as
well. You can also look at two-year, three-year or even five-year goals. In
fact, many organizations have five-year strategic plans, broken down into
what they hope to accomplish each year. For example, for their first year's
goal, Corp ABC decided to unify the content between the web site and customer
support to ensure that it is consistent, accurate, and equally available to
customers and customer support. In two years, they expanded their goal to
unify the web and customer support with product documentation and training
materials. Corp ABC can now identify the value of the goals by estimating
the value of the opportunities.
Identify your opportunities
As you analyze your business issues and needs, you can identify the
opportunities your organization could realize if you are able to change the
way you do business. Opportunities can include everything from streamlining
authoring and review processes, thereby getting your product to market faster,
to enhancing the usability of your web site, thereby increasing customer satisfaction,
and potentially, your market share. For example, Corp ABC identified opportunities
to reduce support costs (consistent effective content results in reduced support
costs), reduce contract costs (correct, consistent information would be used),
and increase customer satisfaction (a little harder to quantify, but they
used a figure to indicated increased sales). Once you identify your opportunities,
you need to determine what your opportunities are worth.
Hard cost savings
The easiest costs to calculate are “hard” costs. If you
translate your content, how much does it cost you to translate now and how
much do you think you could save (based on the percentage of content reuse)?
How many people are responsible for creating content now? What is the average
cost of their salaries? What percentage of their time could you free up to
essentially create new resources? Could you save on contractors? How much
would those savings be? Look for any costs you already have quantified and
determine how to include them in calculating your ROI. For example, Corp ABC
knew the costs of customer support. They calculated a 10% reduction in those
costs as part of their ROI.
Most organizations know their hard costs like the cost of translation,
cost of printing etc., but we frequently find that organizations don't actually
know how much it costs to perform a task. For example, one company we worked
with wanted to reduce the time it takes to produce content for new product
releases by 30%. However, when asked how long it currently took them to create
the content, they had a general timeframe, but were unable to identify specifically
how long each task within that timeframe took. While you can use “guesstimates”,
your guesstimated figures may not be valid. When building a business case
that shows potential ROI, it is preferable to be both as accurate and conservative
as possible. You do not want to create unrealistic expectations.
If you don't have metrics, consider using an existing project and tracking
the time it takes to perform all the tasks related to it. That way, you can
actually quantify the time it takes to perform tasks.
Determining the investment costs
Once you know what your costs are for creating, managing, delivering,
and translating your content you need to calculate the investment costs. Investment
- Authoring tools
If you are moving to structured content you will
need to buy new tools, upgrade your existing tools to a structured version
(e.g., Word 2003 or FrameMaker 7.0), or create forms for your authors to complete.
- Content management system
What is your content management system
going to cost? If you are looking at different systems with varying costs,
pick the most expensive cost to use in your ROI. It's better to overestimate
costs than to underestimate them.
Training the people who will use the system or maintain
the system is critical to the success of your project. Make sure you calculate
the costs of training as part of your investment costs.
There is a good possibility that you may need consultants
to assist you with content analysis, modeling, information architecture, DTDs
and style sheets, forms creation, system configuration, etc. Include some
consulting dollars in your calculation.
- Lost productivity
Don't forget lost productivity. You will need to
devote some of your existing staff to the project itself to help with all
the analysis, design, and implementation, which will reduce their current
productivity. In addition, users will be slower using the new processes and
technology until they become familiar with the system. This will also affect
Return on investment is potential savings minus potential investment
costs. Once you've gathered all your information and done the math, you can
determine if your figures justify a move to content management and a unified
content strategy. Be conservative. While you may in fact realize a high return
on investment, when you are building your business case it is better to be
conservative so that you do not create unrealistic expectations. Management
appreciates a realist ROI rather than an unrealistic one.
Gaining management support for content management often means being
able to show the potential ROI and to put together an ROI, you need to do
some solid analysis up front. Analysis includes identifying the issues you
are currently facing, the opportunities you could realize by implementing
a content management strategy, as well as the goals that content management
can help you to meet. Once you've identified issues, opportunities and goals,
you can gather metrics that compare your current costs against the costs of
implementing a CMS and the savings a CMS can help you to realize.
ROI is the anticipated savings after subtracting the investment costs.
While it's critical to perform a thorough analysis of your current costs and
potential savings, remember to include technology as well as human investment
costs (training, lost productivity) to ensure that you reflect the whole cost
of investment. Be conservative with your potential savings to ensure that
you create a realistic ROI.