Let's work together

Tell us about your project and we'll get back to you soon. All fields are required.

Calculating ROI of a CMS

Date Posted: Thursday, 26 September 2013 14:49
Posted By: Kerry Butters

There’s little doubt that choosing a good CMS has several business benefits, including improved productivity, automated workflows and much more. However, in order to justify the cost of a CMS, it’s often necessary to work out the ROI for the finance department or CEO.

Whilst in the past, this was dependant on the overall cost of the CMS, including installation and licensing, there are now different models which can be used which are more cost effective for some companies, giving rise to less hard-and-fast rules on how ROI should be calculated.

calculating-roi-of-your-cms

For the most part, this is due to the rise in popularity of cloud-based CMS, which often allows a company to pay a monthly fee for the software to be delivered per user, rather than an initial capital outlay.

However, this doesn’t mean that the finance department won’t need any answers, for the most part those wanting to implement a CMS will have to justify it.

Justifying the business expense

One of the difficulties with calculating ROI for CMS lies with calculating cost-savings when it comes to staff efficiency. Bearing this in mind, is it better to calculate savings based on staff cuts or on how opportunities can be maximised on due to increased productivity?

For the most part, the latter is preferred, although the CEO might not agree with you in the first instance. However, it’s important to highlight where costs can be cut in other areas, such as outsourcing of content and suchlike before laying off half the workforce with the submission of a spreadsheet.

This means that it’s wise to look at all aspects of what staff actually do and how a CMS can improve on this and increase productivity in existing staff.

Think about:

Once you have worked out the time that can be saved on tasks such as this, think about where the time saved can be best spent. This could be on new product launches, training, increased traffic to sites, social media management and more. The time that can be saved by editorial and technological staff can be substantial so make sure that you carry out a survey of all staff time before calculating ROI. This can be done by supplying time sheets.

SEO and CMS

Most good CMS include options for SEO and this is something that, without a CMS, can be very time consuming. Measure how long staff will spend on this and get demonstrations from CMS vendors to see how much time can be saved.

This more automated SEO, which can improve tagging and keyword optimization, can also increase traffic quite dramatically, so work out percentages and how they relate to conversions.

For example, if the CMS was to improve search traffic by an average of 10%, then the conversions gained could equate to a rise in revenue. Further to this, improved search onsite and better engagement could push this up even more and traffic monetized by advertisers.

Soft and hard ROI

Whilst hard ROI (improved efficiency, savings made by dollar, lowered computing costs, less office expenses etc.) is easier to calculate than soft, it’s necessary to carry out both.

Soft ROI includes as much about productivity and user experience as it does cost saving and if you consider that a more productive workforce is a happier one, then a few benefits immediately become clear.

A happier workforce delivers:

  • Increased productivity, so bosses get more for their money when it comes to staff
  • Lower turnover of staff
  • Less sick days taken
  • Improved collaboration, leading to better team work

Whilst it’s not a simple matter to measure how these will save a company cash in the long term, it is relevant and should be included in the overall ROI calculation. A report that looks at ROI is never going to be an exact science, as like business plan finance, it relies heavily upon estimates.

However, intelligent estimates can be made that can address this and justify spending on CMS. Really it comes down to how well the report writer knows the company and where it’s lacking and how it can improve, which should be included in the planning stages.

Pulling it all together to calculate ROI

Once all of the possible efficiencies, cost savings and potential revenue increases have been identified, the next step is to pull it all together to produce a coherent and comprehensive report.

This should be as detailed as possible and take everything into account when it comes to making a solid case for the need to invest in a CMS. Take new technologies into account and whether the CMS vendor wants to tie you into a lengthy contract, or whether it can be purchased on a monthly basis and justify this too.

Include risk assessment and how long it will take for the company to gain ROI on the investment. 

Compile these together and come up with a final ROI figure that can be used to evaluate the CMS investment.

Other recommended articles

How a Social Feed Can Contribute to Business Success

86 percent of marketers said social media was pivotal for business. Discover how a Social Feed within a CMS can contribute to business success.

How to Create the Perfect Mobile Landing Page

What makes the perfect landing page to drive action on mobile

What Mary Meeker's State of the Internet Report Means for Marketers

In June 2016 Mary Meeker's State of the Internet Report was released to the general public, and as usual contained valuable marketing insights that should be considered when planning your marketing st ...

The new Elcom website is here

We’re excited to announce our new website is here! We’ve given it a complete overhaul – new site architecture, content and images wrapped up in a cleaner look and feel.