We’re often (always?) asked to provide concrete return on investment (ROI) numbers for our information architecture or taxonomy projects.
The truth is that measuring the direct impact of IA is complicated.
It is easy, however, to map IA results to successful execution of enterprise analytics, Customer 360, knowledge management, and sales enablement, etc. which are all dependent on well-structured, well-managed, and well-governed information. In other words, successful executions are dependent on a solid foundation.
IA is fundamentally about connecting people to information. At enterprise scale, IA builds the foundation of an organization’s information infrastructure so that constituents and stakeholders can connect with the right information across multiple platforms, workflows, experiences, and audience profiles in order to create the required connection (be it an external sale or internal communication). When the foundation is flawed, the connections don’t happen.
ROI for the Foundation
An easy-to-understand picture is found in this question: What’s the ROI on the foundation of your company’s office building? (Or the sum of the foundations of your employees’ houses as many now work from home.)
When you total the time and money spent to design the perfect floor plan, select the paint colors, pick your appliances and finishes, furnish it, and even landscape the property (just for starters), do you consider the foundation as part of the property value? Not if it’s poured properly. Not if the beams are placed well. Not if it’s solid. However, the foundation quickly becomes a major issue if it’s cracked, and/or does not support growth or change for the building.
The ROI of the information architecture foundation is similar. IA is a piece of the ROI of all the things it supports. It’s in sales, marketing, accounting, and product development. And it impacts investors, customers, and employees. As the foundation–IA is in everything your company does. Internally. Externally. Everything. Including accommodating new and different uses, which are often uncovered during our assessment activities.
And when your IA is not “properly poured” it potentially shows up as:
- Wasted marketing budget
- Non-compliant data
- Slower IT updates
- Poor customer experiences
- Unreliable analytics and AI
- Overall operational mistakes
And even fines.
A good foundation, however, allows for confident, aligned growth.
In 2016, IBM concluded that the annual cost of “bad data” was $3.1 trillion. The number is likely to be even higher now. According to another study, bad data costs companies 10-30% of their revenue and correcting mistakes in data costs $1-10 per record, and still another says that marketers waste 21 cents of every media dollar because of poor data quality.
According to CMSWire, “Data is considered to be ‘bad’ if it is unstructured, inaccurate, inconsistent, incomplete or contains duplicate information. All of the data brands collect comes from a variety of channels, many of which are siloed, and much of the data comes in different formats or from different databases. Other data is more random and is not formatted, with no consistency, and must be aggregated in a structured, consistent way for it to be useful.”
So, the data in question is not solely about information architecture and taxonomy, but a closer look shows that IA is very much woven through this data, and the point is made: If your foundation is cracked, expect your piggy-bank to be cracked open.
Taxonomies, metadata, product and/or customer models, etc., all support the needs of the enterprise, end users (customers, employees, investors), and the organizational requirements around governance, compliance/regulations, workflows, staffing levels, and the technology stack. Like the foundation of a skyscraper–it needs to support a tremendous amount of weight and never crack under pressure.
Unified customer experiences, enterprise analytics, and knowledge management all depend on consistent, accurate, relevant, and accessible information. And that’s what the IA foundation provides.
And if you need a real world example of what happens when the foundation for your skyscraper has issues, just read about the sinking Millennium Tower in San Francisco.
We have an Information Maturity quiz that might be the first step in self-assessing your foundational capabilities. Or, you can contact us for a free consultation.