Taxonomy Strategies LLC Making the Business Case for
Taxonomy Strategies LLC Making the Business Case for Taxonomy Joseph A. Busch Bill Hutchison December 5, 2007 Copyright 2007 Taxonomy Strategies LLC. All rights reserved.
Points v What is the value proposition for tagging content with taxonomies? Do taxonomies make content reusable? Findable? Improve productivity? How can taxonomy value be measured in a way that quantifies how it contributes to the bottom line? v What is needed to build out case studies so practitioners have some support for their efforts? v What techniques have vendors and implementers found useful in selling taxonomy efforts to corporate stakeholders? Taxonomy Strategies LLC The business of organized information 2
Taxonomy is the content tagging framework v A taxonomy is not just website navigation or a site map § Websites change frequently—a more durable way is needed to deal with content so that different navigation schemes can be created and used over time. § Site navigation and site maps are views of a collection of content that can be constructed using the taxonomy. v A taxonomy is not a CMS folder structure § A folder structure is the way content is physically organized in a repository providing just a single point of access to the content. § If content is well tagged using a taxonomy it shouldn’t matter how the content is physically listed in the repository. Taxonomy Strategies LLC The business of organized information 3
The basic taxonomy value proposition v Complete and consistent content tagging enables automated personalization, syndication, aggregation of content packages and provision of other information access services. Taxonomy Strategies LLC The business of organized information 4
How do taxonomies actually improve search? v Input (Query) Side § “Search” using a small set of pre-defined values instead of trying to guess what word or words might have been used in the content. § Map synonyms together so searches for “car” and “automobile” return the same things. v Output (Results) Side § Organize search results into groups of related items. § Sorting and filtering. § Visualization (Google maps, analytic charts, timelines) § Refining search results. Taxonomy Strategies LLC The business of organized information 5
events application http: //events. oracle. com/ “Is located” powers Google Maps mash-up “Is a” groups product Taxonomy Strategies LLC The business of organized information 6
What information access service does taxonomy enable? v Syndication, notification & alerts § Push information to subscribers according to a pre-defined set of criteria, e. g. , RSS feeds. § Notify individuals about new information. v Personalization § Present information based on an individual’s role, setting or other criteria. v Serendipity § Discover new, unanticipated related information that happens to be in the same category. § Find related information on-the-fly (“more like this”) Taxonomy Strategies LLC The business of organized information 7
Use cases that demonstrate the taxonomy value v Convert shopping into sales online. v Increase successful completion of website tasks. v Avoid recreating existing content needed to do a task that can be found on an intranet share. v Respond to FOIA* or e-Discovery requests. v Reduce cost per unique user (UU) v Expand to new audiences § Assemble content package (portal, e-lesson, RSS feed) from existing content. § Personalize end user experiences. v Improve customer satisfaction § Score higher on ACSI** survey Taxonomy Strategies LLC The business of organized information * FOIA - Freedom of Information Act ** ACSI - American Customer Satisfaction Index 8
The Taxonomy problem: How to pick from > 5, 000 faucets (taps)? (http: //www. homedepot. com/) By: v Category v Price v Brand v Color/Finish v # Handles v Series Name v Water Filter? v Faucet Spray v Handle Shape v Soap Dispenser? Taxonomy Strategies LLC The business of organized information 9
Convert shopping into sales online: Taxonomy compared to search v Conversion rate increases. § Home. Depot. com – Double digit increase. § 1 -800 -Flowers. com – More than a 10% increase. § Otto Group (Kaleidoscope, Freemans, Grattan, and lookagain catalogs) – 130% increase. v Lift in average order size. 2005 web sales net income: $ 80, 000 Increased conversion rate: 30% $ 24, 000 Order size lift: 20% $ 16, 000 Potential revenue increase per year: 50% $ 40, 000 Taxonomy Strategies LLC The business of organized information 10
Complete tasks successfully: Taxonomy compared to search v “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) v “The category interface is superior to the list interface in both subjective and objective measures. ” Hao Chen & Susan Dumais Annual call center labor costs: (50, 000 calls per month, $20 per call) $ 12, 000 Increase in speed performing task: 36% $ 4, 320, 000 Increase in successful self-service: 36% $ 4, 320, 000 Potential savings per year: 50% $ 8, 640, 000 Taxonomy Strategies LLC The business of organized information 11
Avoid recreating existing content: Taxonomy compared to search v “The amount of time wasted in futile searching for vital information is enormous, leading to staggering costs …” Sue Feldman, v Sun’s usability experts calculated that 21, 000 employees were wasting an average of six minutes per day due to inconsistent intranet navigation structures. When lost time was multiplied by staff salaries, the estimated productivity loss exceeded $10 M per year—about $500 per employee per year. Jakob Nielsen, useit. com Annual employee costs: (21, 000 employees, $80, 000 per yr) Increase productivity: (avoid recreating existing work) Taxonomy Strategies LLC The business of organized information 25% $ 1, 680, 000 $ 420, 000 12
How to estimate costs— Tagging Taxonomy Facet Hier? Typical CV Size Time/ Value (min) Avg # values / Item $ / Min Cost/ 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 Products & Services Y 500 1. 5 4 $ 0. 42 $ 2. 52 Geographic Region Y 100 0. 5 2 $ 0. 42 Broad Topics Y 400 2 4 $ 0. 42 $ 3. 36 1080 5 15 $ 7. 04 TOTALS Inspired by: Ray Luoma, BAU Solutions Taxonomy Strategies LLC The business of organized information 13
How to estimate costs— Assumptions ASSUMPTIONS Enterprise SW License $ 100, 000 Maintenance/Support 15% SW Implementation x 200% Legacy Content Items 100, 000 Content Growth Rate 15% Tagging/Item $ Enterprise Taxonomy $ 100, 000 Taxonomy Strategies LLC The business of organized information 7. 04 14
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 Implementation $ $ 15, 000 $ 30, 000 $ 105, 525 $ 15, 000 $ 165, 525 200, 000 App Tech Support Tagging Legacy Content $ 703, 500 Ongoing Taxonomy Creation $ 100, 000 Maintenance TOTAL $ 1, 103, 500 Taxonomy Strategies LLC The business of organized information 15
Sample ROI (Return on Investment) Calculations Description Year 1 Year 2 Year 3 Year 4 Year 5 Costs Software Licenses/ Maintenance $ 100, 000 $ 15, 000 Implementation/Support $ 200, 000 $ 30, 000 Taxonomy Creation/ Maintenance $ 100, 000 $ 15, 000 Legacy/Ongoing Tagging $ 703, 500 $ 105, 525 Benefits Productivity increases $ - $ 125, 000 $ 1, 250, 000 Service efficiency gains $ - $ 129, 600 $ 1, 296, 000 Yearly Net Benefits $(1, 103, 500) $ $ 2, 380, 475 Payback period 1. 4 89, 075 Years until Benefits = Costs Inspired by: Todd Stephens, Dublin Core Global Corporate Circle Taxonomy Strategies LLC The business of organized information 16
How to sell taxonomy v Clearly understand what the problem is and what the opportunities are. v Don’t sell “metadata” or “taxonomy”, sell the vision of what you want to be able to do. § A taxonomy is a framework for describing information in the context of an organization in order to accomplish business objectives. v Calculate costs and benefits so you can explain the ROI in a believable manner. v Design the taxonomy (in terms of level of effort) in relation to the value at hand. Taxonomy Strategies LLC The business of organized information 17
Taxonomy Strategies LLC Questions? Joseph A. Busch, +1 -415 -377 -7912, jbusch@taxonomystrategies. com, http: //www. taxonomystrategies. com Bill Hutchison, +44 -7977 -454263, bill@billhutchison. com December 5, 2007 Copyright 2007 Taxonomy Strategies LLC. All rights reserved.
Webography H. Chen, S. Dumais. “Bringing order to the web: automatically categorizing search results. ” Proceedings of CHI 2000. pp. 145 -152. http: //research. microsoft. com/copyright/accept. asp? path=http: //research. microsoft. com /~sdumais/chi 2001. pdf&pub=ACM Dublin Core Metadata Initiative website. http: //www. dublincore. org 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_I D=1725&Publication_ID=108 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: //www. ischool. berkeley. edu/~hearst/papers/cacm 02. pdf Eric T. Peterson. Home Depot uses Endeca to consolidate search and navigation, dramatically increasing conversion: case study. Jupiter Research (July 11, 2005) http: //www. jupiterresearch. com/bin/item. pl/research: casestudy/79/id=96483/ K. S. Taylor. "The brief reign of the knowledge worker, " 1998. http: //online. bcc. ctc. edu/econ/kst/Brief. Reign/BRwebversion. htm Taxonomy Strategies LLC The business of organized information 19
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