Taxonomy Strategies LLC Making the Business Case for

Agenda v Taxonomy value propositions v What the research says v Example ROI Taxonomy Strategies LLC The business of organized information 2

Taxonomy issues, problems, and concerns v Enormous volumes of information within organizations v Diversity of assets § Content and technology v Complex and IT-oriented standards §. NET, SOAP, WSDL, etc. v Limited (if any) integration with applications: § Search engines § Information management applications § Back office transaction-based systems § Analytical systems § … Taxonomy Strategies LLC The business of organized information 3

Fundamentals of taxonomy ROI v Tagging content using a taxonomy is a cost, not a benefit. v There is no benefit without exposing the tagged content to users in some way that cuts costs or improves revenues. v Putting taxonomy into operation requires UI changes and/or backend system changes, as well as data changes. v You need to determine those changes, and their costs, as part of the ROI. Taxonomy Strategies LLC The business of organized information 4

Finding information should not be about “Feeling Lucky” Taxonomy Strategies LLC The business of organized information 5

Finding information requires multiple approaches Taxonomy Strategies LLC The business of organized information 6

about 3, 890, 000 results Taxonomy Strategies LLC The business of organized information 7

2, 199 results Taxonomy Strategies LLC The business of organized information 8

Agenda v Taxonomy value propositions v What the research says v Example ROI Taxonomy Strategies LLC The business of organized information 9

Usability research— Taxonomy compared to search results lists 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 Taxonomy Strategies LLC The business of organized information 10

Taxonomy compared to search result lists Category is 48% faster Median Search Time in Seconds Category is 36% faster Source: Chen & Dumais Taxonomy Strategies LLC The business of organized information In top 20 results Not in top 20 results 11

Time saved— Taxonomy compared to search result lists v 1 hour per day searching x 36% faster = 22 minutes each day v 22 minutes x 250 working days per year = 5500 minutes or 92 hours per year Taxonomy Strategies LLC The business of organized information 12

Time saved— Taxonomy compared to search result lists Benefit: Service efficiency increase Number of customer service calls/month 50, 0 00 Average cost per call $ 6 Total call costs per year $ 3, 600, 000 Increase in productivity by browsing information Service costs savings per year Taxonomy Strategies LLC The business of organized information 36% $1, 296, 000 13

Trusted advisers— Taxonomy avoids costs v “The amount of time wasted in futile searching for vital information is enormous, leading to staggering costs …” Sue Feldman, v Poor classification costs a 10, 000 user organization $10 M each year—about $1, 000 per employee. Jakob Nielsen, useit. com Taxonomy Strategies LLC The business of organized information 14

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 Taxonomy Strategies LLC The business of organized information 15

Knowledge workers spend more time re-creating existing content than creating new content 25% 8% Source: Kit Sims Taylor (cited by Sue Feldman in her original article) Taxonomy Strategies LLC The business of organized information 16

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 Increase in productivity from not recreating content Employee cost savings per year Taxonomy Strategies LLC The business of organized information 25% $1, 250, 000 17

Agenda v Taxonomy value propositions v What the research says v Example ROI Taxonomy Strategies LLC The business of organized information 18

Key Factors in ROI v Breadth § “How many people will metadata affect? ” v Repeatability § “How many times a day will they use it? v Cost/Benefit § “Is this a costly effort with little or no benefits? ” Source: Todd Stephens, Dublin Core Global Corporate Circle Taxonomy Strategies LLC The business of organized information 19

Some common taxonomy ROI scenarios v Customer support § Cutting costs § Increased sales v Knowledge worker productivity § Less time searching, more time working § Avoiding re-creating information that already exists v Catalog site § Increased sales § Increased productivity v Compliance § Avoiding penalties v R&D productivity § Faster time to market Taxonomy Strategies LLC The business of organized information 20

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 21

How to estimate costs— Assumptions ASSUMPTIONS Enterprise SW License Maintenance/Support SW Implementation Legacy Content Items Content Growth Rate $ 100, 000 15% 200% 100, 000 15% Tagging/Item $ 7. 04 Enterprise Taxonomy $ 100, 000 Taxonomy Strategies LLC The business of organized information 22

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 Implementation $ 200, 000 App Tech Support $ 30, 000 Tagging Legacy Content $ 703, 500 Ongoing $ 105, 525 Taxonomy Creation $ 100, 000 Maintenance $ 15, 000 TOTAL $ 1, 103, 500 $ 165, 525 Taxonomy Strategies LLC The business of organized information 23

Sample ROI Calculations Description Year 1 Year 2 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) $ 89, 075 $ 2, 380, 475 Year 5 1. 4 Year 4 Costs Payback period Year 3 Years until Benefits = Costs Inspired by: Todd Stephens, Dublin Core Global Corporate Circle Taxonomy Strategies LLC The business of organized information 24

Summary v Taxonomy Value Propositions § Find information faster § Avoid recreating information that already exists § Increase sales § Avoid compliance penalties § Improve R&D effectiveness v Don’t sell “taxonomy”, sell the vision of what you want to be able to do. v Do the calculus (costs and benefits) § Quantify the tangible & intangible benefits § Quantify the total cost of ownership including maintenance & tagging v Support your calculations with research Taxonomy Strategies LLC The business of organized information 25

Taxonomy Strategies LLC Questions Joseph A. Busch + 415 -377 -7912 jbusch@taxonomystrategies. com http: //ww. taxonomystrategies. com September 27, 2005 Copyright 2005 Taxonomy Strategies LLC. All rights reserved.

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/cacm 02. 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/Brief. Reign/BRwebversion. htm. Taxonomy Strategies LLC The business of organized information 27