Every company must be diligent in their efforts to win new
business. A Digital Asset Management (DAM) system can be used as a part of your
offerings or capabilities to potential new customers. By demonstrating how DAM
can facilitate file searching, retrieval and collaboration, many DAM customers
justify cost savings based on new business pitches alone.
Some companies look at DAM as an externally billable
service, or provide it at no charge to entice customer loyalty. Many businesses
find that once they have a customer using their DAM solution, it will become
part of that customer’s internal workflow, and subsequently makes it much more
difficult for those customers to disengage. Be sure to include any sales or new
business development employees in the DAM solution. Those employees are often
looking for new things to show to existing customers in the drive for new
Many diverse factors are considered when determining ROI.
Two of the most common approaches with ROI consider either many smaller, short
term gains, or one larger, long term gain. Initially, most companies opt for
the short term approach. By measuring many small advances or savings in labor
or materials, and then extrapolating those numbers across multiple employees,
and departments, and companies, a small handful of modest examples can quickly
add up to the numbers required to justify the cost of a DAM
system. Benefits of a short term ROI include a reduced risk for
justification, quicker turnaround and performance of the investment, and a
With many ROI scenarios, if one doesn’t bear out in the
final tally, others are still able to prove the point. Smaller examples also
mean easier and quicker measurement of the investment’s performance. For
example, if a company does in-house production, a DAM system is a tremendous
benefit. Most production departments use a rough calculation where employees
should bill 300% of total employee cost (salary plus benefits.) So if an
employee costs the company $100,000 per year, the production team may target a
$300,000 average billing per resource. Given a 240 work day year, that breaks
down into $1250 per day or a $150 per hour billable target.
Using a very conservative example, with a production team of
5 people, saving each of them ½ hour per day equals $90,000 per year (5 people
x (.5 x hourly rate of $150) x 240 days per year). Often production employees
spend at least 30 minutes per day just searching for assets. Most production
managers look at the non billable costs for the return on investment (ROI,) and
show this savings as additional income possible with the same staff, versus
justification for employee reduction. To put it another way, that $90,000 in
labor currently is typically unbillable, and that labor could instead be used
for billable work. That shows new income without a related increase in labor
making the department more profitable.
The scope of the project can be a double edged sword.
Keeping the scope small affords lower overhead cost, but at a proportional
increase to the burden of proof to that smaller group. A larger scope
diversifies and insulates the risk, but the overhead in documenting a larger
set of requirements will add to the DAM solution timetable.
Regardless of whether the ROI will be proven in the short
term or longer term, plan for flexibility and modifications down the road. Many
DAM customers repeatedly demonstrate how the single investment continues to pay
dividends well after the ROI has been proven. Once the base solution is
installed, a minor reinvestment in a DAM solution can have large rewards.
Additional clients, business units or company initiatives are often introduced
to existing DAM ecosystems with minimal or fractional additional costs. Long
term flexibility should be a cornerstone of any DAM solution. This technology
in particular touches many different areas of the company, and allowing the DAM
to either feed or pull from other business processes is essential. To this end,
workflows should be designed to be easily modified as business requirements
change. Adobe’s eXtensible Metadata Platform (XMP) is a good technology to keep
in mind for this purpose. XMP is a labeling technology that allows you to embed
data about a file, known as metadata, into the file itself.
The immediate benefit of this is that your Digital
Asset Management system is not locked into a proprietary database model,
and those assets are much easier to share across multiple systems. Adobe has
made XMP the industry standard, and provides software libraries for authoring
or modifying the metadata of those assets.
Validation of ROI is often overlooked or undervalued. Be
aggressive and optimistic, but with a small readily identifiable example. An
eighteen month target for the ROI is usually quite achievable, but often the
ROI is realized much quicker, sometimes within a few months. Document the
initial requirements, the final agreed to set of scope objectives, and what the
actual results were. Rarely does the finished solution exactly match the
initial objectives, but often additional sources of ROI are discovered along
the way. This helps solidify the original arguments and helps bolster the
validation of the ROI.
DAM solutions are not impulse purchases. They require
collecting all business requirements, thoughtful consideration of sometimes
opposing viewpoints, a commitment to driving the process to completion and
proving that the project was an unqualified success. Your DAM vendor should
have practical experience in how these solutions are presented, deployed, and
managed long term. By understanding the company’s fiduciary responsibility, and
how the company generates revenue, a DAM solution can provide a tremendous cost
savings and a source of revenue for many years.