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Building a Business Case for Digital Asset Management

As digital media content is distributed throughout an organization and to external audiences, its value to the organization greatly increases. Today’s distribution channel complexity (print, online, mobile devices), combined with emerging new media types (podcasts, video, Flash), creates process inefficiencies and increases costs for companies. Digital asset management (DAM) solutions enable enterprises to control these costs, maximize the value of digital media assets and manage digital rights to this content.

To make the business case for DAM, you need to understand the range of cost factors related to managing and sharing digital media that can be eliminated or reduced through DAM automation. Cost factors can include: time spent by knowledge workers searching for appropriate content; recreating and duplicating rich media files; licensing and rights-management activities; handling requests for file conversions and fulfillment; maintaining archives; and other administrative tasks.

ROI of DAM Solutions
DAM can help you achieve cost improvements by enabling greater productivity with more accuracy and better controls. Favorable return on investment (ROI) can come from the following areas:

  • Cost reduction—The most tangible aspect of savings comes when current business costs are eliminated or reduced, including costs associated with CD or DVD replication, agency fees, shipping costs and file transformation.
  • Cost avoidance—Industry analysts estimate that up to 30% of all content is recreated because it is lost or otherwise mismanaged. Avoiding such costs—as well as unnecessary expenses such as stock or custom photo fees, licensing fines and other costs that are a direct result of poorly tracked assets—can earn immediate returns.
  • Resource reallocation—By centralizing content in a searchable solution, DAM reduces the time spent locating content and streamlines fulfillment. Finance departments, however, are not typically convinced by the argument that DAM will affect a "hard cost" labor savings. In reality, unless DAM will eliminate a dedicated staff position, you still have the fully burdened cost of your knowledge workers. Demonstrating a reallocation of resources to more strategic activities (which can lead to revenue generation—see below) is a much more convincing ROI component.
  • Revenue generation—A DAM implementation often creates new revenue opportunities. In nearly all cases, the accelerated delivery of marketing materials means that sales teams, retailers and distributors can respond faster to revenue opportunities. Or in another example, a media company may discover its new library of materials can be repackaged and offered for sale.

Strategic Value of DAM
Though hard cost-reduction figures alone can justify a DAM system, there are strategic business benefits to consider as well. Though hard to quantify, better brand management, more consistent messaging and improved partner relationships are examples of intangible, yet critical, strategic value.

For example, with self-service access to quality graphics and photos, salespeople can deliver more persuasive and effective presentations. Organizations that sell through retail channels can outsell the competition simply by making promotional and advertising materials more readily available to retailers. One media company saw a strategic revenue opportunity to sell stock footage online. Another company implemented DAM as a global brand portal for sharing marketing materials and collaborating across time zones, which accelerated brand launches in new regions.

Though DAM projects are often driven by departments or groups to solve a specific problem, widespread adoption of the DAM solution measurably increases ROI. For example, review and approval cycles are shortened when legal teams are system users; media coverage expanded when public relations teams can distribute photos or video faster to editors or reporters; expensive photography is repurposed across company communications. When these processes are streamlined across departmental lines, the benefits of DAM are compounded.

Total Cost of Ownership (TCO)
When measuring ROI, consider all of the factors that contribute to your cost of ownership. These include the cost of hardware, software, support, professional services and ongoing administration of the system. If disparate business units can utilize the same DAM solution, total cost per user drops by leveraging the resources and infrastructure from the initial implementation.

Though there are no infrastructure costs with a hosted model, there is a monthly fee to consider. Faster deployment is a significant benefit of a hosted solution. This may allow you to take advantage of a market opportunity sooner or accelerate a product launch, which can have a positive impact on revenue.

For example, if an on-premise deployment will be delayed 12 months due to infrastructure or resource obstacles and your ROI model proves a six-month return, the additional savings from a faster deployment may justify outsourcing. Implementing sooner allows you to earn those returns sooner. If an on-premise system is your long-term plan, only consider an initial hosted phase if the solution can later be installed on site.

For marketing organizations, the hard cost savings, business process efficiency improvements and ability to accelerate time-to-market are contributing factors to ROI and DAM solution justification. While it may seem like DAM solutions build their own business cases, be sure to do your homework and quantify the expected benefits. In addition to tangible factors, consider strategic value as well. And look to the future. Understand that as digital media technology and usage evolve, there will be unexpected opportunities to derive additional value from your digital assets—and, by extension, from the DAM solution itself.

ClearStory Systems is a leading provider of high-performance solutions for digital media communications. ClearStory's contemporary software suite manages the enterprise digital media supply chain—from creation and collaboration, to lifecycle management and delivery—to give companies a competitive advantage, marketing agility, cost avoidance and maximum efficiency. Backed by premier customer support and service, ClearStory’s award-winning products are easy to use and readily align with our customers’ business objectives for both a rapid return-on-investment and low total cost of ownership. For additional information visit


Source:  KMWorld, Building a Business Case for Digital Asset Management
Posted Oct 30, 2007
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