Editor’s note: Lyndon Hedderly has developed a digital value assessment through years of working on return on investment models with various customers. Lyndon has written a number of blog posts on this topic here, including reimagining the business case for digital initiatives.
Digital asset management is key to managing your content and your content drives your customer experiences, which in turn drives your overall business performance. This isn’t just about the management and organization of digital assets; it is about digital fitness.
I’ve just spent the morning reviewing Digital Asset Management (DAM) ROI calculators and articles. Most of the models describe cost savings based on reduced time & effort spent on a series of tasks, such as;
- searching for digital assets,
- re-working formats, file versions and conversions,
- re-creating assets / content distribution / workflows,
- dealing with DRM compliance or violations.
The hours spent on these tasks are typically multiplied by an hourly rate, to arrive at a supposed saving per asset. This is then multiplied by the number of total assets and deducts the DAM solution costs, to give an overall return on investment.
The average net savings I would realize, for my fictitious company with 25,000 assets, was roughly $250k (900% ROI), over 5 yrs. Not bad, although, in my opinion, these savings are as hypothetical as the imaginary company I used to model them.
Why are these calculations wildly arbitrary and overly simplistic at best, and potentially misleading at worst? The effort estimates have little factual basis. Multiplying this number by an hourly loaded cost to infer an absolute dollar saving is also fundamentally flawed. Furthermore, the costs of the DAM solution focus only on the application whilst ignoring areas such as training, onboarding and overall change management. In short, the calculations of cost savings are useless, except for perhaps a box-ticking exercise to satisfy procurement.