Finding the Grail: A Three-Part Process to CMS Cost-Benefits

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CIDM

October 2005


Finding the Grail: A Three-Part Process to CMS Cost-Benefits


CIDMIconNewsletter Charlotte Robidoux and Patrick Waychoff, Hewlett-Packard Company

Originating in ancient Celtic lore, legends of the grail describe magical vessels infused with extraordinary powers. The motivation to believe in these legends persists throughout the ages and on many levels-from Arthurian and Christian mythology to Monty Python and, most recently, The Da Vinci Code. Is the search for a database vessel filled with carefully structured topics that transform into customized content for customers simply another quest for the Holy Grail?

Move to the other side of the spectrum if this depiction is too mystical-away from myth and uncertainty into the world of statistics and probability: network diagrams, decision trees, risk analyses, and formal cost-benefit studies. For those trained in strict decision theory, application of these techniques may yield compelling facts. But if your expertise is in the realm of content management, it is quite possible that the thought of such tasks promotes analysis paralysis.

The other alternative is a more comfortable middle ground, an approach that balances an engaging consideration of benefits with realistic data points for informed decision-making. Clarifying your current business requirements in relation to relevant benefits will enable you to evaluate suitable options and to develop a convincing business case. The primary components of this process are (1) assessing cost-benefits, (2) calculating the return on investment (ROI), and (3) measuring effectiveness over time.

1. Assessing Cost-Benefits
Because benefits realized will depend on your business situation and selected content management solution, determine first what scale of solution fits your business size. For instance, the objective of a medium-sized business might be to implement a moderately priced content management system (CMS), conduct content mapping, restructure legacy content/structure new content, and migrate to XML authoring.

Given this scenario, consider a list of applicable benefits in relation to success measures, as shown in Table 1. Some benefits may not seem relevant (for example, sharing content across departments, metadata management, and remote authoring and collaboration).

Table1

In addition to an informal assessment, you can incorporate other cost-benefit perspectives (Table 2), which may include issues pertinent to initial/start-up phases, implementation, maintenance, direct and indirect costs, sharing content within and across departments, and productivity. The perspective you take shapes your understanding of the solution; many viewpoints result in a more thorough assessment.

Table2

To arrive at a more complete understanding of how savings might be greater in one area versus another, consider in-depth calculations for specific items from a cost-benefit perspective.

2. Calculating the ROI
Once you have assessed cost-benefit perspectives sufficiently, begin preparing ROI calculations based on relevant data points to justify initial costs and estimated savings. ROI represents your projected savings minus your costs over a given period of time.

Some industry vendors provide helpful cost-savings calculators to simplify the estimation process. These tools can be generic, however, and may anticipate more aggressive savings (based on certain assumptions, such as number of translated languages) than your business can deliver.

ROI is something that must be reconsidered regularly to verify initial estimates, refine data, and determine rates of improvement. The following lists and the sample spreadsheet in Table 3 provide an overview of some topics to consider.

Table3

Preparing to calculate ROI
ROI preparation tasks vary depending on the operating assumptions for your business:

  • Assess organizational strengths and weaknesses (for example, weak in number of senior writing staff who have substantial product knowledge but strong in number of staff with tools and programming skills).
  • Identify efficiency goals, such as text reduction, restructuring content, development costs, and improved accuracy.
  • Select projects with a substantial lifespan.
  • Establish the current actual costs.
  • Establish the potential savings.
  • Itemize start-up, personnel, and training costs.

Establishing baselines for target areas
Measuring progress requires a baseline of actual costs for target areas, such as the average cost of

  • managing the documentation set without text reduction (amount of time x labor cost)
  • developing content within a typical project lifecycle (amount of time x labor cost)
  • managing shared content (amount of time x labor cost in each department)
  • ensuring consistent, accurate content (amount of time x labor cost)

Determining potential savings for target areas
Potential savings for benefits germane to your business might include reduced costs for managing

  • a text-reduced documentation set (amount of time x labor cost)
  • a shorter development cycle (amount of time x labor cost)
  • shared content (amount of time x reduced departmental labor cost)
  • consistent, accurate content (amount of time x labor cost)

Calculating initial costs
Initial costs vary depending on the type of CMS you select and whether you opt for a fixed-cost model (complete solution including product licenses and any associated hardware and software) or a variable-cost model (allows for customization, maintenance, support, and training).

Initial costs might include technology, training and consulting, and lost productivity (the following estimate assumes 60-70 people, full-time and contingent staff):

  • Authoring tools total: $15K-$20K
  • CMS: $50K-$200K
  • Training and consulting fees: $15-50K
  • Lost productivity: Divide salaried cost by time spent learning

    3. Measuring Effectiveness Over Time
    Demonstrating results relative to ROI calculations can be difficult to prove without a systematic approach and the discipline to use it. Key Indicators of success include

  • reduced costs
  • producing more output with the same or a smaller staff
  • improved quality

Measuring tasks might include

  • developing a methodology for demonstrating cost savings after single sourcing is implemented
  • establishing average costs before single sourcing
  • carefully choosing projects to be single sourced (those early enough in the lifecycle to demonstrate before and after data)
  • selecting metrics that will demonstrate improvement, such as cost per project (small, medium, large)
  • cost per deliverable
  • cost per task (project lead, writing, editing, graphics)
  • duration of tasks
  • reported errors
  • measuring costs upon project completion and/or at phased intervals (for example, quarterly, every six months, or annually)

Generating meaningful cost-benefit data, though challenging for those who prefer words over numbers, is a cornerstone for transitioning from a manual to an automated content management process. When you take the time to tailor cost-benefit information to your business, it is possible to analyze how a CMS could make practical improvements in your organization and then demonstrate the results.

The possibility of single-sourced, customized content can seem like a quest for the Holy Grail-especially when some companies have struggled to implement CMS technology successfully. To realize the benefits of effective content management requires suspending your belief in the magic of technology, assessing your particular business requirements, and maintaining focus on a proven methodology. CIDMIconNewsletter

About the Authors

Waychoff_Pat Robidoux_Charlotte

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