Can a magic formula help estimate your CMS project?
Myths about the overall costs of web content management are alive and well
This week I got the age-old question from a vendor friend about how much a CMS implementation should cost relative to the licensing fees. It’s a good question, and one we hear a lot from prospective clients. What should organizations expect to spend on a CMS implementation, anyway?
If only there were a magic formula.
Well, it turns out, there is. As far back as I can remember, web content management experts have provided guidance on the expected ratio of licensing costs to services costs. The specific ratios vary, but the one I hear most often is that organizations should expect to spend 3–5 times the cost of their CMS license on services for implementation. I’ve also heard 1–2 times and up to 7–8 times the cost.
Helpful, right? Well, not really. I’ve been surprised to hear this formula still being used when sizing up web content management projects.
While this ratio may have had merit back in the day, the idea of using a multiple of licensing costs is nonsensical in today’s digital age. It’s a carryover from when a technical mindset drove decision making and the project was simply about “installing” a CMS.
I’m not sure it was ever based on empirical data. I hold it in a special place, along with other mythical truisms, such as the infamous “three click rule” in user experience. The more these “rules” get repeated, the more credible they seem.
Giving some guidance can be good
I’m all for “rules of thumb” to help set expectations for large web content management projects. At the very least, however, they need to be vendor and scenario-based. We have seen them useful in some cases as a starting point for setting a baseline minimum investment expectation—especially for organizations that haven’t quite come to face the reality that it’s going to be a large investment beyond the software.
Looking at the bigger picture, however, starting with the idea of a license to services ratio sets organizations down the wrong path. It reinforces the CMS implementation as a technical consideration rather than determining how the platform should be integrated into the business.
Well-intentioned software sales representatives, of course, will want this ratio as small as possible. Licensing deals are still typically inked before the services contracts are determined, and the more expensive the total cost of ownership looks, the less likely you are to “drive that CMS off the lot.”
I talked to one global organization years back where a vendor representative set expectations for an implementation at 1–2 times licensing costs (which had already been heavily discounted). In the end, the organization signed on the dotted line for the software and put out a services RFP with a non-negotiable $250k budget for what was probably $1 million worth of work. I can’t imagine that one ended up in a good situation.
Where the wheels start to come off
But let’s look at some of the “flies in the ointment” if we are going down this path of a magical ratio for estimating projects.
First of all, the industry would need to come to common understanding of what activities an implementation includes. Does this include digital strategy, content strategy, user research, journey mapping, migration, translation, project management, third-party integrations, custom application development, mobile, training, measurement, and experience design? All of them? Some of them? Or is this just technical services?
What timeframe would we be talking about? Is this ratio for an initial project to get a minimum viable product up and running? Or is it a full three-year total solution to build out everything desired and fully onboard the organization onto the platform?
Does it matter if an organization has one website or a hundred? What about 10,000 as one of our clients discovered a few years back?
With more and more blended teams, should this ratio also account for internal time? We have a large project going right now with our agency team members working alongside a very large client-side team in a fully integrated fashion. Should the internal costs be included in the ratio or just outsourced numbers?
If we are using 4x as the rule of thumb and the vendor slashes the price of that enterprise WCM license from $500k to $250k in an end-of-year sale (as one organization I talked to reported), does this mean their implementation costs are suddenly reduced by $1 million?
If you select an open source solution with no licensing costs, any implementation costs multiplied by zero probably sounds swell.
So, you’re saying I may need to roll up my sleeves and scope this thing out?
None of that is helpful of course. As my vendor friend commiserated, attempting to figure this all out is like trying to nail Jell-O to a wall.
Our estimating frameworks for large-scale CMS projects have gotten pretty sophisticated over the years. While we don’t use a magic ratio, we have enough comparable projects and an understanding of the vendor landscape that we can usually size things up quickly for prospective clients.
In doing this, we break it into categories over time, looking independently at strategic planning, design, development, integration, content, and training.
The reality is that enterprise web content management initiatives today are about a lot more than just “implementing” a website. Organizations are nesting these solutions into bigger digital transformation initiatives, enterprise content and experience projects, and complex IT roadmaps.
Treating your implementation costs as another SKU alongside the licensing costs only reinforces all the worst CMS habits that we’ve spent the last decade trying to improve upon.
Don’t fall for the CMS cost myth when embarking on your next web content management project.