The 13 Areas of Cost for a DAM System How to measure the TCO of a DAM, and be successful in implementing one Buyers of Digital Asset Management (DAM) systems often wonder: “What is the total cost of a DAM system, and how can I construct a good first order estimate for the total implementation costs?” This is a great question. It often comes from buyers at larger companies, but the answer actually applies to organizations of all sizes. The intent of this white paper is to provide insight and guidance, based on over 15 years of digital asset management experience and considering both the vendor and buyer sides, into commonly identified areas of DAM cost. These cost areas exist regardless of your choice for acquiring an installed, or hosted, or Software-‐as-‐a-‐Service (SaaS) or open source digital asset management system. There are 13 areas of cost for a Digital Asset Management system. Some of these are more obvious than others. But, in general, you will be well served to consider all of them as you consider acquiring one and are engaged in a product or vendor selection process. 1. Software This is an obvious cost area. Of course this varies from vendor to vendor, and between hosted/SaaS offerings, where it is bundled into the overall fee structure, and installed software where it is typically an explicit line item or set of line items. There is no software cost for an open source DAM, but other costs still apply. As with many kinds of software, the actual cost will likely depend on: • Scale of system • Features, modules or services required • Availability, redundancy or disaster recovery requirements • Number and different kind of users of the system • Number of CPUs used to run the system (depends on the pricing/license model) • Type and term of license (e.g., subscription, annual, perpetual, etc.) Software can be a significant initial or up-‐front cost, which is why in many cases organizations find hosted or SaaS so appealing – it is an operational expense, amortized over time, rather than a one-‐time capital expense. However license models are changing, even for installed software, and annual fee approaches are becoming increasingly common. 2. Maintenance Maintenance is usually an annual cost related to the software that entitles the buyer to fixes, enhancements and upgrades to the software, including major new releases, over the course of the year. Sometimes, especially for lower end or shrink wrapped software, there is no maintenance fee and instead there is an “upgrade cost” where you are essentially re-‐buying a new version of the software often at a significant discount to the new software price, but for some it may feel like a new cost all over again! For hosted/SaaS models, maintenance costs are rolled into the monthly or annual fees. Maintenance fees typically range from 18%-‐25% of the list or final software price (it varies), and in some cases are tied to levels of technical or business support (discussed later). 3. Technical Infrastructure (Computers, Networking, Storage) Again this is an obvious cost area, though the actual cost may be elusive. You pay for it in one form or another even in Hosted/SaaS, where it is implicitly bundled into the cost of the service and thus not as visible, or explicitly in the cloud, where you’re buying on demand “compute” or “storage” services (typically monthly) and paying for bandwidth (also typically monthly) based on some measure – typically the volume of bytes uploaded, downloaded, or moved. The actual cost of the technical infrastructure required to run a DAM will vary from vendor to vendor, and depends on a number of factors. These include: • The scale of the DAM system – how many people or automated processes is it supporting? • The number, size and type of assets – this is probably the most difficult areas of cost to estimate up front. In many cases you won’t know exactly how many assets you’ll have, the total size or average size of certain types, or how many of a given type (e.g., video assets). In many cases your organization has existing archive, or file store(s) or CDs/DVDs that can begin to help you in estimating how much storage you’ll need. • Types of workflows and operations – To understand how much computing power and bandwidth you’ll need will depend largely on a deep understanding of your workflows, then on the type and size of files you’re teams are working with, and the kinds of operations that will be performed on the files either by humans (e.g., editing) or by automated processes (e.g., transforming or transcoding, moving, editing, etc.). For example transcoding video from one format to another or transforming lots of images from one format to another are compute intensive operations and may require powerful computers to meet your needs. As well, you may find that determining bandwidth costs to be very difficult – especially in some of today’s current cloud-‐based pricing models which are often based on the movement of the file into/out of or both the storage service. It can be very expensive, especially if you’re working with video and large graphics files, and have to move them around a lot. • Availability, redundancy or recoverability requirements – you will need duplicate and in some cases additional hardware to enable the system to provide various levels of availability, redundancy or recoverability. Some may argue that virtualization technologies will reduce this cost. Not necessarily. Virtualization is still “a work in progress” and many systems falter as virtualization is employed. Achieving optimal distribution of loads and processing across virtualized servers has proven elusive for several of the DAM vendors. And in some cases it is not their fault – examples exist of the virtualization technology inexplicably faltering or performance significantly decreasing as the system is scaled. It is already well documented that for applications or systems that have a lot of I/O, virtualization can diminish performance. And in the cloud, many of the current cloud infrastructures have limitations built in. In most cases, it is best to work with the vendor to determine the optimum configuration your installation will require. If you are going to put the system in the cloud (e.g., for your open source DAM), you’ll have to do your homework not only on the different cloud services (e.g., Amazon EC2, Microsoft Azure, Rack Space, etc.) but also on their pricing models and determine which fits best for your budget and DAM system. 4. Installation and Configuration For both installed and hosted/SaaS DAM systems, vendors typically charge for this service. It may include initial metadata definition, user interface (UI) branding or configuration, security model definition, user migration or setup, and other configuration services. There may also be costs for building out support for your specific workflows, especially if the system supports automated workflows, rules or business process management (BPM) capabilities. Not included here, but a cost nonetheless, is the metadata definition work that MUST be done prior to implementation or configuration at this point. Most DAM buyers and their organizations commonly overlook this cost area. And overlooking the metadata definition work, can be costly! This work, which again should be done prior to initial installation/ configuration, may involve brining in external consultants who can help you discover, determine and structure a metadata model appropriate for your use cases and workflows. This is money well spent, but keep in mind that you'll need a system that can evolve the metadata model – as it is a living structure that changes over time as your business and use of the DAM changes. 5. Customization Most organizations, particularly larger ones, have specific needs for specific features or capabilities that the software out-‐of-‐the-‐box is missing or is unavailable via configuration. Often the vendor will add them at a cost (sometimes to win the deal). This is not only for installed software, but can often be for hosted or SaaS implementations as well. It is common for organizations that opt for SaaS to want some kind of connectivity with a corporate system – typically a security system like LDAP, Active Directory or a single sign-‐on (SSO) service or possibly other ERP, web content management system (CMS), or marketing automation system. In some cases, they’d like a specific feature or capability added to the hosted system in support of their particular workflows. Customization can be a significant cost, and must be considered carefully. Frequently, though, organizations go this route because of the value or need for the capability. The risk is in the vendor’s ability to deliver the feature as needed in time for your system launch. Furthermore, it is critical to observe that customization potentially has a hidden cost – who will maintain the customization (your organization? the vendor? your 3rd party system integrator?) and at what cost? Does it or can it get rolled into the base product or a component, or not? What happens with upgrades to the base product or component – is there a cost you have to pay to move it forward and keep it compatible? This is a fair set of questions for both SaaS and installed versions, and another important item to keep in mind. 6. Integration Does the DAM system need to integrate with any other system(s) you have or is it to be another silo? Many DAM implementations have to talk to a variety of other software -‐-‐ from creative tools and video editing suites to security/authentication systems, to Web CMSs, to ERP and billing systems. Can the system integrate? What is the cost to integrate? What is the ongoing cost to maintain the integration(s)? Who will do the initial integration and who will maintain it? All of these questions, like those with custom feature development above, need to be carefully evaluated and budgeted. 7. Migration Migration is the term used to describe movement of both your assets (files) and metadata (descriptions and information about the files) from an existing system or systems to the new one. Will you need to move your assets from an existing DAM, legacy home-‐grown system or archive to the new system? Do you have racks of video tapes? Or CDs and DVDs filled with images that you want to include in the DAM? Or do you have a whole bunch of files on a file store that you’ll have to move into the new system? You need to consider what the cost to convert, prepare or otherwise ready content for movement into the new DAM system will be. This is typically a one-‐time cost that varies depending on two things: first the volume of existing assets or files, and the complexity of the existing and desired metadata that needs to be migrated or created for the assets. Keep in mind that video can take a lot of time to prepare and may need to be staged over a longer period of time. In many cases the vendor can offer migration services, and has substantial experience in doing so. As part of your preparation, be sure to check into this and get references who are willing to discuss their experiences with you. 8. Initial Product Training There are several elements to training. It is best to break this up into what we’ll call “initial training” and “ongoing training” (discussed below). The initial training cost area includes two areas: First, the cost to get a few key people in your organization fully up to speed on the system so you have resident DAM experts or “DAM Masters”, and second, the cost of training your initial set of end users on the system as configured for your workflows, processes and organization. Let’s focus on the first training focus area the “resident DAM experts” or “DAM Masters”. In almost every successful DAM installation (hosted/SaaS or on premise) has one to three people (depending on the size and breadth of the organization) who are the DAM Masters. They fill a role that oversees the DAM from a combined business use and technical implementation perspective. Key responsibilities of DAM Masters are to: • Solicit, vet and resolve all enhancement requests and modifications to the system • Expand and update the metadata model (assuming the system supports that capability after it's initially established!) and definitions • Enforce consistency of metadata (“metadata quality assurance”) – are people using the same terms, controlled vocabulary, keywords, etc. to describe the assets so they can be found later? •
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Implement and update the folder/collection hierarchy for consistent access Implement new business rules, policies, and in some cases automated workflows within the system to facilitate business processes around the system Function as more than a librarian or governance provider for the assets Potentially manage user organization and access to functionality in the system Potentially provide internal training and problem resolution as well (see 10. Business Support below) This role is often divided between several people who work as the governing council or DAM Masters to make sure the organization has smooth and ongoing system operation. They are not necessarily IT people, because they need to understand how the DAM is applied to the business and across groups including potentially external agencies, partners, and users. Nor nor are they strictly marketing folk assigned to babysit the DAM as they also have to understand, sometime technically how the DAM works, and how to get things accomplished with it. The DAM Master is thus a core person or team and needs to be able to understand both the business needs, workflows and processes of the DAM’s various stakeholders, as well as the technical architecture and capabilities of the DAM system. In essence, these people “own the DAM” and are responsible for its proper function, use and success within the organization. With this lengthy but essential introduction, the key question is: Do you have the right people in your organization to serve as DAM Masters in the first place? You must ask and assess this critical question. It’s very important, because it directly affects the initial training cost. In many cases organizations don't have these key people on staff and instead have to hire them. Or perhaps they do have some with relevant skill sets, but they’ll need to be “grown” and trained. In some cases organizations outsource these skills/roles from a 3rd party (e.g., a system integrator), or from the DAM vendor. Once you identify who is going to serve as your DAM Masters, you can identify the cost – whether it will be new headcount, outsourced headcount or service, or purely training fees for a few key people in your organization. Establishing the DAM Master role is critical success factor for your organization’s use of a DAM – without it, it is highly likely your DAM project will wither and die, because no-‐one “owns” the DAM and the requisite skills to manage and expand its use. The second Initial Training cost area is initial system rollout and end-‐user training. What will it cost to roll out the DAM and train some number of end users on their workflows with this new tool? Their training needs are different than the core DAM Masters. You will have different roles with different workflows requiring a different training focus – e.g. a "search and download" user vs. a librarian/metadata manager vs. a creative user. Most organizations train and rollout in phases – sometimes to a core set of users, sometimes internally then externally (e.g., agency partners), sometimes geographically (e.g., US first then EU then Asia/Pacific, etc.) As you can see Initial rollout training costs have to be included in the overall cost planning for the DAM. 9. Ongoing Product Training This is often a hidden cost. Training is needed almost every time the vendor updates the core DAM features, or certainly when you purchase new capabilities or modules. It also is needed as you roll out new capabilities, changes to the metadata model or existing workflows, or roll out to new parts of the organization (e.g., a new geographic region, and it’s likely language issues). These ongoing product training costs are critical to include for the ongoing successful use of the DAM. In some cases, the training materials themselves – videos, screen recordings, best practices, and presentations – can be stored in the DAM itself and offered to users immediately when they log in. The cost here is the cost of developing and delivering the training, and the staffing of this role. Do you need a full time trainer? How do you develop your course materials? How frequently do you need to train? Do you need regional or language specific training? Will the vendor or your system integrator provide this training? All of these questions must be addressed. In frequently these ongoing training costs are overlooked as a cost of the DAM. Keep this in mind as well. 10. Business Support Business support is another commonly unaccounted cost area. Business support is an organizational cost. It is the extended organizational infrastructure (people, organizational structures, and technology/systems) that need to be put in place to maintain both the proper functioning of the DAM as it relates to the business (i.e., how the DAM maps to the business, validating proposed changes to the system, adding new capabilities, rolling out to new users, etc.), and the proper governance and communication across your extended organization. While business support is absolutely essential and required in global companies with multiple regional users (e.g. a global product or services company, manufacturer, consumer product provider or media/entertainment company) or for that matter any company that works with Ad agencies on a global basis, it is also critical for small-‐ and medium-‐sized organizations to establish an appropriate business support infrastructure and business support team. Business support includes the DAM Masters and training roles referred to in both Initial and Ongoing Product Training above. However, it expands beyond those to include the expanded team of people that play a role in supporting the DAM. Keep in mind that organizations use a variety of organizational structures to support a digital asset management system, especially if it on a global, enterprise-‐wide or broad basis (e.g., integrates with external agencies, partners, distributors, retailers, etc.) For example, an organization might employ a structure that uses regional experts who provide business level support in the local language, and serve as contacts between the region’s end users and the DAM Masters, funneling requests inward, and answers and education outward. They might outsource the business support function to a third party who provides the DAM Masters, training and more back to the entire organization. It might be a cross-‐functional team including IT, marketing, agency members, regional experts and others. Because of the variance in how organizations may implement business support for their organization, costs vary widely. They may depend on the size of this organization and degree to which automation can be used instead of people. Both are required and different structures work for different organizations. A good communication infrastructure is required as well – to communicate changes and education outward, and gather requests and needs inward. While there is no “right way” to provide business support for DAM, there are best practices (which is a topic for another white paper!) One of them, however, is setting up the business support function in the first place. It is essential that it be set up and implemented, and for that matter, budgeted and accounted for as a critical expense, if you want your DAM to be successful. One related statement must be made here: Digital asset management is fundamentally different than content or web content management, and it requires a different support structure (and training). This is so frequently misunderstood by people in organizations who think they can apply their WCM knowledge and skill sets to DAM and be successful. In general, you can’t because DAM is distinctly different. What it does, how it functions, what it needs to be successful are all different from that of a Web CMS. Perhaps an existing WCM support infrastructure can be utilized, but it doesn’t substitute for one that is dedicated to the DAM and the workflows, business processes, training, etc. that are required for its success across the extended enterprise. In summary, Business Support is an important cost. It is critical to establish and maintain this organizational infrastructure that is largely specific to the DAM. In is essential to the success of any DAM, and often the area that kills DAM or media asset management efforts if it is not properly addressed and furthermore, supported with senior management support and push. 11. Technical Support Technical support would appear to be an obvious cost area. Keep in mind that there are two kinds: vendor provided and internal (i.e., help desk). On the vendor side, it is typically included in the maintenance fees, but there are often levels of support and quality of service agreements (e.g., basic; 24x7x365; on site, etc.) that may be additional cost for the higher level. Internal technical support cannot be overlooked. Internal technical support costs will depend on the size of your organization and complexity of the technical implementation of your DAM. Large organizations typically have a help desk that handles a range of application questions. Small and medium-‐sized organizations my only have the DAM Master(s). In either case, with DAM, technical support from the help desk or DAM Masters can be augmented by both an online help system that is often included in the DAM product, or instructional assets such as video, audio, Powerpoint presentations and Flash animations, that are developed and deliberately stored in the DAM to facilitate training and ongoing learning/help. This is a best practice of many successful digital asset management implementations. In both cases the DAM Masters typically provide internal second or third line of support behind the front line help desk and instructional assets. The cost then of technical support is a combination of what is paid to the vendor for support of a given level, and the costs of maintaining a help desk or internal experts. It can be offset with good training, online help systems and relevant instructional materials stored in the DAM. 12. Hosting Hosting costs apply to SaaS, Cloud and to managed services approaches to DAM implementation the system. The difference is with a managed service, you own the hardware and software licenses, but you pay for it as either an external third-‐party service or internal shared service (e.g. provided by IT or a marketing operations group via a line of business or departmental chargeback). Hosting fees will vary depending on the approach taken. As discussed earlier, cloud approaches require that you do your homework to determine the best model for implementing your DAM on either a public or private cloud. If you’re choosing a SaaS approach, the vendor may be using cloud services and therefore you’re largely shielded from them as the vendor will roll those into their SaaS business model and cost structure. But even with SaaS what you pay for may vary from vendor to vendor. Subscription fees, fee per user, additional storage, additional bandwidth, additional modules or functionality and length of contract, discounts and price breaks, all vary and factor in to the total SaaS cost. 13. Project Management Project management is the thirteenth and final cost area. Surprised? Did you have it on your list of costs? It too is commonly overlooked or unaccounted for. It is especially important to account and budget for in larger implementations. However, regardless of the size of the implementation, someone – either you or the vendor and often both to align resources and schedules from both sides – is going to provide project management during discovery, implementation, testing, and rollout phases. Make sure you account for it. Summary We have attempted to bring to the fore and to your awareness, the total costs for a DAM system implementation, and some of the considerations you may need to be aware of that reside behind each of these costs. Note, however, that all of these costs are the financial costs. There are many others that are measured in terms of risk, time, and effort, and will also need to be balanced and traded off as you move through your DAM and vendor selection process. For example, if customization or additional features are required, what is the risk that it/these will be completed on time and fit the needs of your organization? This cost needs to be weighed from a risk perspective, and may lead you to trade off functionality or other areas of cost, or approach other vendors who provide lower risk. As mentioned all along, these costs vary from vendor to vendor and it's important in your selection process to get as close to an apples-‐to-‐apples comparison between vendors. While this is not always easy, ask the questions, build your comparative matrix, and then discuss, weigh, and tradeoff the costs, risks and rewards in your decision making process. It is our intent to help you consider the total costs both financial and otherwise. In our experience, an educated buyer is our most successful DAM customer.