A Business Case for a Taxonomy

By Carl Weise posted 08-24-2012 10:17


People often think that the business case for a taxonomy is the same as a Return on Investment (ROI) analysis.  In fact, ROI is only one form of business case.

The most important features of a business case are:

  • They must promise benefits for the organization.
  • They should have a way of measuring or evaluating whether the promised benefits have been achieved.
  • They must be visibly aligned with the goals of your senior management.
  • They must generate trust, confidence and commitment.

This makes them political as well as logical tools.  You must never forget that we are dealing with human beings as well as accountants.


A good business case tells a story, but it is a story that can be connected to reality.  First, it describes measurable features of the current environment.  It identifies a challenge or an opportunity that relates to a business concern.  It explains how taxonomy and metadata work can help address that challenge or opportunity.  Then it connects the audience to a future reality which can be measured or evaluated in some concrete way.

A business case thus has two aspects to it, the 'objective' measurable, quantitative aspect, and the 'subjective' evaluative, qualitative aspect.  No business case is complete without presenting both aspects.

The qualitative aspect connects you with what people who have goals that the business cares about.  The quantitative aspect gives you measurable indicators to give you and them confidence about the relationship between your actions and those goals.  The qualitative aspect gives context and meaning to the numbers.  The numbers give confidence.

If you just have numbers, only the accountants will care about them, and the analysts will argue about what the numbers mean.  If you just have qualitative evaluation, nobody will be sure how much of your story is just spin, unconnected to reality.

Taxonomy work, like much information and knowledge management work, is only part of the back-end work that makes enterprises effective.  It is often difficult to show direct causal connections between measurable parts of the business, such as sales, and the use of a taxonomy.  Many factors can claim credit for improvements in sales.  This is why a business case is as much about politics as logic.

The quality of a business case depends on:

  • Your pre-existing reputation for getting results, and stakeholder confidence in your abilities
  • Your ability to make your case on business issues that senior executives and operational managers care about
  • Your ability to show a convincing connection between the taxonomy and metadata work and those business issues
  • Your ability to describe credible measures and evaluation mechanisms for the success of your project
  • Your visible and continuing commitment to achieving the promised results - this builds and feeds reputational and continuing trust.


Quantitative analysis ensures your project is grounded in reality, and has measurable impact in changing that reality.  The most typical quantitative approach is the so-called ROI analysis - how much dollar value do I get out of this project from the dollars I have pumped in?  Numbers look objective, so they inspire confidence more than opinions do.  This approach is superficially attractive, but for many areas of information and knowledge work, the things you can measure and count do not necessarily mean what you think they mean at first glance.  Countable stuff is visible stuff.  The real impact of information and knowledge work is what goes on in people's heads and cannot be completely monitored. 

For example: If the average time for information search is halved, does this mean that employees are spending the released time productively?

If teams are accessing and reusing documents from other teams, does this mean there is more mindless copying going on, and less innovation?

If the average time to answer a customer query is shortened, does this mean that the customer is satisfied with the quality of the answer?

If the cost of producing proposals is shortened, does this mean we are writing better proposals and winning the projects?

If the employees can always find what they need through the taxonomy, does this mean there is less social interaction, informal knowledge sharing and trust building going on?

Anybody who does quantitative research knows that the same set of numbers can always tell a number of competing stories.  This is why qualitative analysis must always accompany quantitative analysis, to understand what the numbers mean on the ground, in real human situations.

Some improvements in the organization - especially at the operational level - are much more open to quantitative analysis and translation into dollar value.


Qualitative analysis connects you to what is important to people - the things they attribute value to, and the things that will drive their decisions and choices.

There are three qualitative steps you need to consider in developing a business case.

Your first step in a business case connects your project to the things that are important to your senior management as well as to your operations managers, and the decisions they have made or need to make for the business.

This is why your stakeholder analysis is so important at the start of the project, because this is part of what stakeholder analysis does - uncover what is important to key influencers and beneficiaries of your project.

The second qualitative element in your business case relates to ingoing communications and reporting.  A business case is only the beginning of an engagement with your sponsors and key stakeholders.

A business case contains a promise, and so you need to manage communications with your stakeholders as you go through the project, indicating what is happening and what progress you are making against the promised goals and outcomes.  Don't wait to the end to report back, you may need additional support and understanding long before that.  Successes - whether planned or unexpected - need to be picked up as they happen, and then communicated.  Collect stories from the field when you can and communicate them.  You will also use these later to explain your project's impact.

Hence your business case must contain progress markers and generate a communications plan.

The third qualitative element in a business case is the reporting back at the close of your project.  Your case needs to explain to your sponsor and stakeholders exactly how your project outcomes will be measured and evaluated.  This shows that you are serious about achieving outcomes for the business, and not simply spinning a tale.

Your final evaluation should contain both quantitative measures (e.g.  improvement in the speed/success rate of finding information in the sale team during a proposal process) as well as qualitative measures (e.g.  to what degree the improvement in information access has made a positive contribution to sales).

It is a mistake to simply rely on quantitative measures.  People only care about numbers because of the story they tell.  Collecting concrete examples from the field and giving a qualitative evaluation of the numbers is what completes the circle on your initial promises for the business - you have your empirical, grounded data, you have examples that people can relate to, and you can report on the views of key people in the decision making system about what all this means for the business.

Some improvements in the organization, especially at the strategic level, are much more open to qualitative analysis than quantitative analysis.

Tell us about your experience in writing a business case for your taxonomy project

Tell us about your success in managing a taxonomy project.

I will be speaking at the following events:

September 10th, 2012  AIIM’s 1-day ERM Practitioner class in Tulsa, OK (Contact the Tulsa Chapter of ARMA to attend)

September 18th– 21st, 2012  AIIM ECM Master class in Amsterdam

September 25th– 28th, 2012  AIIM ECM Master class in Silver Spring, MD

#metadata #Taxonomy #TaxonomyandMetadata #ElectronicRecordsManagement #ECM #ERM


11-28-2012 04:19

Sorry Carl but I was very disappointed that there actually was no "case" for taxonomy given the title
perhaps you should have called it a business case that does not depend on ROI
I was excited to think that I may learn something about presenting a solid case to support the adoption and implementation of a corporate wide Taxonomy management system enabling and controlling effective RM at all levels

11-13-2012 10:31

Carl, Your post is great reminder to include the "soft" benefits in addition to ROI when making a business case. Thanks for that!