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    0 Replies Latest reply on Mar 31, 2013 4:41 PM by dam_systems

    Are Digital Asset Management Systems Worth It?

    dam_systems Newbie

      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
      . Benefits of a short term ROI include a reduced risk for
      justification, quicker turnaround and performance of the investment, and a
      smaller scope.


      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.