How can you measure the ROI of metadata management?

2 Calculate your costs and benefits

The second step to measure the ROI of metadata management is to calculate your costs and benefits. You need to consider the total expenses and revenues that you incur and generate from metadata management, as well as how they compare to your baseline scenario without metadata management. Common costs include software, hardware, personnel, training, and maintenance costs of metadata management tools and processes. Benefits can consist of savings, revenues, or value-added from metadata management outcomes and benefits. For example, you can estimate the value of data quality by multiplying the number of data errors by the average cost per error. Additionally, you can estimate the value of data literacy by multiplying the number of data consumers by the average revenue per consumer.

3 Compute your ROI ratio and payback period

The third step to measure the ROI of metadata management is to compute your ROI ratio and payback period. The ROI ratio is the percentage of net benefits divided by total costs. The payback period is the time it takes for the net benefits to equal or exceed the total costs. For example, if your metadata management project costs $100,000 and generates $150,000 in net benefits over two years, your ROI ratio is 50% and your payback period is 1.33 years.

4 Adjust your assumptions and scenarios

The fourth step to measure the ROI of metadata management is to adjust your assumptions and scenarios. How sensitive is your ROI calculation to changes in your inputs and outputs? What are the best-case and worst-case scenarios for your metadata management project? How can you mitigate the risks and uncertainties involved? For example, you can use different discount rates, growth rates, or error rates to see how they affect your ROI ratio and payback period. Or you can use different levels of adoption, usage, or impact to see how they affect your costs and benefits.

5 Communicate and demonstrate your results

The final step to measure the ROI of metadata management is to communicate and demonstrate your results. How will you present and explain your ROI calculation to your stakeholders and decision-makers? How will you show the evidence and impact of your metadata management project? For example, you can use charts, graphs, dashboards, or stories to illustrate your ROI ratio and payback period. Or you can use testimonials, case studies, or examples to showcase your metadata management outcomes and benefits.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?