Finding the ROI in Web Content Management

How many reports does it take before Web Content Management vendors change their errant ways and start listening to customers?

If you were to look at the recommendations from The Gilbane Group (news, site) and their Justifying Web Content Management: The Business Case and ROI report, then there is still a sharp learning curve ahead of many.

A simple four-word summary of the report, sponsored by SDL Tridion (news, site), might as well go “Keep it simple, stupid”. While that could be a tad simplistic — and we’ll be looking at why — it is a conclusion that keeps hitting the reader smack-bang in the face.

Economize With WCM

Here are some interesting nuggets from the report: 

• The highest ROI on Web CMS investment tends to happen where development and user training costs have been slashed.
• High ROIs also tend to take place when Web CMS development is done easily, with content rather than technical considerations being the primary driver.
• Another scenario for a high ROI is when the CMS user experience and that on the public-facing website is of high-quality.

In this respect, it is interesting that only earlier this week WCM vendor Ingeniux reported its biggest first quarter in the company’s history with a 65% year-on-year growth compared to 2008.

Asked what it was that they were doing to produce the results, Ingeniux CEO Jim Edmunds said that they had learned some hard lessons from the last recession: “Stay close to your customers and focus on building what they need, not what we think they need."

Amongst other things, what this report does is identifies possible areas where companies can achieve cost savings and efficiencies. In a depressed economy, that translates into considerable ROI.

WCM as a Revenue Driver

Stating from the outset that the way different businesses generate revenue only differs really in the product they are selling, the report points out that the principle is the same for the public-facing user interface  — interact with clients.

With the purpose of engaging new customers, or servicing established customers, quality web content and a rich interactive experience between user and the web is the basic driver of business.

Common to all these experiences on successful websites is the development of high-quality global content accessible to all users and generated by "expert" content providers centrally.

Really successful companies will facilitate the customization of this content based on these localized differences:

1. Consumer profiles based on geographical differences
2. Localized applications to manage these profiles
3. Language considerations
4. Branding and marketing needs

In this respect, while this may appear obvious, what may not be so obvious is the fact that content quality deteriorates when the need to synchronize content, geographies, languages and cross-branding is ignored.

The bottom line is that WCM systems that allow content providers to retain control of centralized content quality and automate changes across global websites often increase online revenue.

In particular, the presence of tools that allow easy page creation, high-level user interactivity through blogs and wikis and other digital asset manipulation enhances user experience and revenue streams.

Decreasing Costs

So how do cut costs? There is a number of ways to do this. High on the list of "must-do" things is to buy a commercial Web CMS. But this may not always seem practical, and some businesses choose to build those systems in-house.

The problem, the report says, is that in the vast majority of cases where enterprises develop their own systems, they underestimate:

• The amount of time required to develop WCM applications
• The cost of going the proprietary route
• The cost of both initial developments and ongoing maintenance.

A second important consideration of cost-cutting is that IT resources can be taken out of the web authoring process and made available across the entire enterprise with an off-the-shelf system.

Even in small WCM deployments, efficient use of IT resources can result in personnel savings of $US 200, 000 or more (e.g., three resources at about US$ 70,000 per year).

A third point that enterprises need to consider is that without an effective WCM tool, companies are at risk of having conflicting, outdated, or even legally-sensitive content on their sites.

Content providers, in this scenario, cannot see what content is where. In the event of content updates, there is the risk that only one version will be updated.

Apart from compliance, this can also result in the provision of bad information, which in turn leads to bad decision making.

For all these reasons, companies should be looking at feature-packed web content management systems.

Calculating the ROI

The report also provides a number of very basic formulas for companies to calculate the ROI if they were to implement a content management system. However, while the formulas are easy to use, they also come with the warning that any ROI is open to manipulation to produce a desired result. It is worth spending some time with these formulas, which will probably be very revealing about your company.

Site Development Cost Equations (Source: The Gilbane Group)

On this particular note, Site Development costs are particularly telling. The implementation of easy-to-use Web CMS can cut costs in this department by about 70%-80%.

Training Costs (Source: The Gilbane Group)

There are other key factors to think about too when calculating the ROI. These include:

• Reduced after-sales calls and costs
• Increased ‘stickability’ because of personalize user experience
• Savings from integrated analytics
• Savings from translation management.

Taken together, it would be hard but to concluded that on ROI alone, the investment in a WCM is justified.

Web Content Management = Savings

In this economy, investment decisions in costly WCM tools can be tough. However, according to the report, the cost savings of a CMS implementation seem clear.

The report concludes by offering some practical suggestions to potential buyers on how to deal with CMS vendors.

Customers should:

• Identify all the different elements and costs associated with a WCM system (time-cost estimates, training costs, ease of use for the novice, IT costs, etc.).
• Ask for a demonstration from your vendor on what your savings will be.
• Not be afraid to ask your vendor for ROI metrics.
• Consider localization with global sites for cost the savings.
• Be aware of the manipulated ROI calculation. Be honest with the calculations and don’t tweak them to get the desired result.

Above all, don’t get rushed into developing an in-house system unless you really have to. Time is money, and the longer it takes, the more it will cost and the more it will eat into the financial benefits of investing in the first place.

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