View
218
Download
2
Category
Preview:
Citation preview
Strategies LLCTaxonomy
September 27, 2005 Copyright 2005 Taxonomy Strategies LLC. All rights reserved.
Making the Business Case for Taxonomy
Joseph A. Busch
2Taxonomy Strategies LLC The business of organized information
Agenda
Taxonomy value propositions What the research says Example ROI
3Taxonomy Strategies LLC The business of organized information
Taxonomy issues, problems, and concerns
Enormous volumes of information within organizations Diversity of assets
Content and technology
Complex and IT-oriented standards .NET, SOAP, WSDL, etc.
Limited (if any) integration with applications: Search engines Information management applications Back office transaction-based systems Analytical systems …
4Taxonomy Strategies LLC The business of organized information
Fundamentals of taxonomy ROI
Tagging content using a taxonomy is a cost, not a benefit. There is no benefit without exposing the tagged content
to users in some way that cuts costs or improves revenues.
Putting taxonomy into operation requires UI changes and/or backend system changes, as well as data changes.
You need to determine those changes, and their costs, as part of the ROI.
5Taxonomy Strategies LLC The business of organized information
Finding information should not be about “Feeling Lucky”
6Taxonomy Strategies LLC The business of organized information
Finding information requires multiple approaches
9Taxonomy Strategies LLC The business of organized information
Agenda
Taxonomy value propositions What the research says Example ROI
10Taxonomy Strategies LLC The business of organized information
Usability research— Taxonomy compared to search results lists
“We found that users preferred a browsing oriented interface for a browsing task, and a direct search interface when they knew precisely what they wanted.”
Marti Hearst (and others)
“The category interface is superior to the list interface in both subjective and objective measures.”
Hao Chen & Susan Dumais
11Taxonomy Strategies LLC The business of organized information
Taxonomy compared to search result lists
0
20
40
60
80
100
120
140
Category List
Me
dia
n S
earc
h T
ime
in
Se
con
ds
In top 20 results
Not in top 20 results
Category is 36% faster
Category is 48% faster
Source: Chen & Dumais
12Taxonomy Strategies LLC The business of organized information
Time saved—Taxonomy compared to search result lists
1 hour per day searching x 36% faster = 22 minutes each day
22 minutes x 250 working days per year = 5500 minutes or 92 hours per year
13Taxonomy Strategies LLC The business of organized information
Time saved—Taxonomy compared to search result lists
Benefit: Service efficiency increase
Number of customer service calls/month 50,000
Average cost per call $ 6
Total call costs per year $ 3,600,000
Increase in productivity by browsing information 36%
Service costs savings per year $1,296,000
14Taxonomy Strategies LLC The business of organized information
Trusted advisers—Taxonomy avoids costs
“The amount of time wasted in futile searching for vital information is enormous, leading to staggering costs …”
Sue Feldman,
Poor classification costs a 10,000 user organization $10M each year—about $1,000 per employee.
Jakob Nielsen, useit.com
15Taxonomy Strategies LLC The business of organized information
Searching
Creating
Commun-icating
Knowledge workers spend up to 2.5 hours each day looking for information …
… But find what they are looking for only 40% of the time.
Source: Kit Sims Taylor
16Taxonomy Strategies LLC The business of organized information
Creating new
content
Recreating existing content
SearchingCommun-icating
25%8%
Knowledge workers spend more time re-creating existing content than creating new content
Source: Kit Sims Taylor (cited by Sue Feldman in her original article)
17Taxonomy Strategies LLC The business of organized information
Cost saved by not recreating content
Benefit: Increase in productivity
Number of employees 100
Average employee salary $ 50,000
Employee costs per year $5,000,000
Increase in productivity from not re-creating content 25%
Employee cost savings per year $1,250,000
18Taxonomy Strategies LLC The business of organized information
Agenda
Taxonomy value propositions What the research says Example ROI
19Taxonomy Strategies LLC The business of organized information
Key Factors in ROI
Breadth “How many people will metadata affect?”
Repeatability “How many times a day will they use it?
Cost/Benefit “Is this a costly effort with little or no benefits?”
Source: Todd Stephens, Dublin Core Global Corporate Circle
20Taxonomy Strategies LLC The business of organized information
Some common taxonomy ROI scenarios
Customer support Cutting costs Increased sales
Knowledge worker productivity Less time searching, more time working Avoiding re-creating information that already exists
Catalog site Increased sales Increased productivity
Compliance Avoiding penalties
R&D productivity Faster time to market
21Taxonomy Strategies LLC The business of organized information
How to estimate costs—Tagging
Taxonomy Facet Hier?TypicalCV Size
Time/ Value (min)
Avg # values /
Item $ / MinCost/
Element
Audience N 10 0.25 2 $ 0.42 $ 0.21
Content Type N 20 0.25 1 $ 0.42 $ 0.11
Organizational Unit Y 50 0.5 2 $ 0.42 $ 0.42
Products & Services Y 500 1.5 4 $ 0.42 $ 2.52
Geographic Region Y 100 0.5 2 $ 0.42 $ 0.42
Broad Topics Y 400 2 4 $ 0.42 $ 3.36
TOTALS 1080 5 15 $ 7.04
Inspired by: Ray Luoma, BAU Solutions
22Taxonomy Strategies LLC The business of organized information
How to estimate costs—Assumptions
ASSUMPTIONS
Enterprise SW License $ 100,000
Maintenance/Support 15%
SW Implementation 200%
Legacy Content Items 100,000
Content Growth Rate 15%
Tagging/Item $ 7.04
Enterprise Taxonomy $ 100,000
23Taxonomy Strategies LLC The business of organized information
How to estimate costs—Total cost of ownership (TCO)
Description Year 1 Year 2 Year 3 Year 4 Year 5
SW
Licenses $ 100,000
Maintenance $ 15,000 $ 15,000 $ 15,000 $ 15,000
Implementation $ 200,000
App Tech Support $ 30,000 $ 30,000 $ 30,000 $ 30,000
Tagging
Legacy Content $ 703,500
Ongoing $ 105,525 $ 105,525 $ 105,525 $ 105,525
Taxonomy
Creation $ 100,000
Maintenance $ 15,000 $ 15,000 $ 15,000 $ 15,000
TOTAL $ 1,103,500 $ 165,525 $ 165,525 $ 165,525 $ 165,525
24Taxonomy Strategies LLC The business of organized information
Sample ROI Calculations
Description Year 1 Year 2 Year 3 Year 4 Year 5
Costs
Software Licenses/ Maintenance $ 100,000 $ 15,000
$ 15,000
$ 15,000
$ 15,000
Implementation/Support $ 200,000 $ 30,000 $ 30,000
$ 30,000
$ 30,000
Taxonomy Creation/ Maintenance $ 100,000 $ 15,000
$ 15,000
$ 15,000
$ 15,000
Legacy/Ongoing Tagging $ 703,500 $ 105,525 $ 105,525
$ 105,525
$ 105,525
Benefits
Productivity increases $ - $ 125,000 $ 1,250,000 $ 1,250,000 $ 1,250,000
Service efficiency gains $ - $ 129,600 $ 1,296,000 $ 1,296,000 $ 1,296,000
Yearly Net Benefits $(1,103,500) $ 89,075 $ 2,380,475 $ 2,380,475 $ 2,380,475
Payback period 1.4 Years until Benefits = Costs
Inspired by: Todd Stephens, Dublin Core Global Corporate Circle
25Taxonomy Strategies LLC The business of organized information
Summary
Taxonomy Value Propositions Find information faster Avoid recreating information that already exists Increase sales Avoid compliance penalties Improve R&D effectiveness
Don’t sell “taxonomy”, sell the vision of what you want to be able to do.
Do the calculus (costs and benefits) Quantify the tangible & intangible benefits Quantify the total cost of ownership including maintenance & tagging
Support your calculations with research
Strategies LLCTaxonomy
September 27, 2005 Copyright 2005 Taxonomy Strategies LLC. All rights reserved.
Questions
Joseph A. Busch+ 415-377-7912
jbusch@taxonomystrategies.comhttp://ww.taxonomystrategies.com
27Taxonomy Strategies LLC The business of organized information
Bibliography
M. Hearst, A. Elliott, J. English, R. Sinha, K. Swearingen & K. Yee. “Finding the Flow in Website Search.” 45 Communications of the ACM (Sept 2002) http://bailando.sims.berkeley.edu/papers/cacm02.pdf
Sue Feldman. "The high cost of not finding information." 13:3 KM World (March 2004) http://www.kmworld.com/publications/magazine/index.cfm?action=readarticle&Article_ID=1725&Publication_ID=108
K.S. Taylor. "The brief reign of the knowledge worker," 1998. http://online.bcc.ctc.edu/econ/kst/BriefReign/BRwebversion.htm.
Recommended