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Clarifying Web costs.

What associations are spending for their online presence.

"It depends" was never a more appropriate response than in answer to the question of what it costs to develop and maintain a Web site.

"Often when we're asked about Web costs, we find we have to talk in specific scenarios, because that's the only way to really make sense of it," says Don Dea, co-founder of Fusion Productions, Webster, New York, a meeting and Internet design and technology company. He is co-author, along with Fusion Productions President Hugh K. Lee, of World-Class Web Sites, a 1998 ASAE Foundation study identifying best association Web management practices.

"Web hosting is really the only Web activity for which there are no real surprises - and that cost typically ranges from $50 to $500 per month, depending on the size of the site, the level of activity, and the type and number of applications," says Dea. Site maintenance, development, and support, on the other hand, can only be known through benchmarking, he says.

"When you talk Web costs, it's not one price fits all," says Lee. This is definitely the case for associations, for which differences in staff size, budget, strategic goals, and membership composition are all factors in what each does - and spends - on its Web site.

A sampling of sites

Even so, what are some associations spending - and for what site features? Here are brief scenarios describing five association strategies - the tactics they've tried and the budgets they've tallied - for developing and funding their Web activities.

* According to Clay Mickel, associate director of communications, the Chicago-based American Dental Association's 1999 Internet budget - including all hardware, software, staffing, and online access for its 400 staff members - is $1.2 million, which represents almost 2 percent of ADA's $65 million annual operating budget. An additional $125,000 is currently being sought for a total Web site redesign. ADA, which serves 144,000 members, now has five employees devoted full-time to the Web, another three who spend large parts of their time on it, and as many as 10 others who also do some Web work, says Mickel.

* The National Association of Purchasing Management, Tempe, Arizona, set its Web budget for its current fiscal year at $95,000 for site development, including a complete redesign; $30,000 for hosting and maintenance; and another $33,000 earmarked for creating Web-delivered tools and job aids. According to Terri Tracey, NAPM vice president of electronic product development, an additional $150,000 is allocated for Web personnel, including a full-time manager, a full-time coordinator, a quarter-time graphics designer, and a half-time student. All totaled: $308,000 for the 65 full-time staff, 20 part-time-staff association with a $19 million animal operating budget and a membership of 45,000.

* The International Facility Management Association, Houston, which has 42 staff members serving a membership of more than 16,000 and an annual operating budget of $9.5 million, is currently dedicating 4 percent of that total to its Web site development budget, says Pamela Ewton, IFMA director of technology. Included is the cost of the association's distance learning opportunities, the continued development of a search engine, creation of an online conference that will offer audio of the top 30 sessions from IFMA's annual conference, other new online opportunities, and the salaries and overhead of the association's two full-time Web development staff.

* Ginny Shipe, executive vice president of the 7,300-member Real Estate Brokerage Managers Council, Chicago, has a staff of 12 and an annual operating budget of $2.1 million. Her association officially launched its Internet/intranet site this past May using a projected budget of nearly $130,000, which includes development of the site's architecture and graphics, a secure server, and a members-only section, as well as sections for education, publications, directories, and news. Another $20,000 is budgeted for 2000 for maintenance and "some extras we might want," says Shipe. This doesn't include the salary of her director of information systems, who is devoted full-time to the site.

* Among the many smaller-staff associations that rely on volunteer help for their Web efforts is Automotive Trade Organizations of California, Irvine, which supports its 800 members with a staff of three and an annual operating budget of $350,000. Will Woods, CAE, AuTO-CA executive director, says his association's Web site launch last year was accomplished thanks to a volunteer who continues to do virtually all maintenance on the site, which includes legislative information and links to legislators.

Currently Woods's volunteer is loading large volumes of archived text documents compiled by the association's legal counsel to use as an online resource for members. "I've tried not to think about not having a volunteer to do this, because I know it would be a considerable cost," says Woods. This year he budgeted $500 for Web hosting and maintenance - about the same as it cost the first year. As for projected expenses for the next several years, Woods estimates as much as $10,000 annually depending on possible site enhancements and additions, including banner advertisement opportunities that might offset some of the cost.

Whether spending hundreds, thousands, or more than a million dollars, the same compelling reasons exist for having a Web presence, says Dea. "Even small associations with limited Web funding can drive interactivity and have a valuable, sophisticated site." (See sidebar, "Beyond Web Technology.") He advises small associations in particular to think about what's most important to their members. "Choose the two or three applications surrounding the primary purpose of the association that you can support and then spend more on the front end building those key functions. Even with a small budget, you can provide a forum for discussion or a directory of member e-mail addresses that will facilitate networking. Your directory doesn't even have to be searchable, though it definitely should be kept current," says Dea.

NAPM is one example of an association that got its Web start by focusing on a few things at a time. It initially launched a bulletin board early in 1995 and then migrated to a Web site several months later. "We jumped into the Web with the attitude of using minimal funding to develop a pilot site, evaluating it and getting feedback, and then adjusting and enhancing it based on that feedback. The initial site was developed in-house and was very basic," says Tracey. Since then, NAPM's Web site has gone through five redesigns - two mini-upgrades and three extensive makeovers - with another complete redesign planned for late this year.

An early adopter of the Web, NAPM was among the organizations that earlier on fell prey to inexperienced Web site designers and hosts. "When they quoted pricing and timelines for building applications, they were always way off, meaning more expense and late deliverables for us," says Tracey. "Over time, our biggest expenses haven't gone into staffing or hardware, but into allotting enough for a quality redesign and continual enhancements."

Anticipating Web expenses

Other association executives can likewise offer some cautions based on experiences resulting in Web costs that exceeded their initial expectations.

Customization was the culprit for Public Affairs Council, Washington, D.C., which launched its site in July 1997. "Our initial budget was only $35,000 because we expected to pay for our vendor to use largely off-the-shelf Web software," says Douglas Pinkham, PAC president. "Our actual out-of-pocket costs the first year were $65,000," he says. The biggest surprises were the increased expense for software customization, training and marketing, and the time required to manage content development and vendor services.

"When working with a site developer, keep in mind that you're dealing with a pre-set level of services. Inevitably something is almost what you want, but you often still need to at least tweak it to fit your needs. You might look at someone else's site and say, 'I want to do that,' but you actually want to do it a little differently because your members will need to receive it differently or for some other reason specific to your organization," Pinkham explains.

When ADA initially launched its site in 1995, consultants worked side by side with staff "because there simply were no in-house skills in 1995," says Mickel. "We still rely on outsourcing more than we'd like to because we can't recruit employees with those skills. In fact, our most troublesome Web-related cost is for consulting help to do things for which we're authorized to hire full-time staff but which the competitiveness of the labor market prevents us from doing." And consulting fees are escalating rapidly, adds Mickel. For the kind of Web support ADA requires, the going rate in Chicago is about $150 to $200 per hour, he says.

Even for what's done in-house, the real costs of the Internet can often be buried. "Your webmaster may save money by making a very simple online registration form, but you may pay for it in membership or education when someone has to re-key the information because the initial process wasn't designed for automation," says Dea. He cautions that while you may try to capture cost savings on the front end with what seems like a simplified process, it may actually result in spending more in other areas of the association. In the example here, says Dea, "you might be better off to pay to automate the form in the first place. Sometimes spending the money up front may head off greater expenses further on down the line."

Containing Web costs

Because a big part of cost savings is reducing expenses, what have those with Web management experience learned about containing Web costs - or if not always containing them, at least calculating them close to the mark?

* Define your purposes and priorities. First of all, think seriously about the purpose of your Web site before you launch it, because this will help you determine what you need to spend up front, says Terry Feinberg, chief executive officer of Tri-County Apartment Association, San Jose, California. "If we had been driven on the Web by our members, I think we would devote significantly more resources to our Web efforts," he says.

"And if we were a group of computer graphics professionals or a cause-related philanthropic organization that needed to get its message out to a wide audience, what we would be doing with our Web site would be vastly different. But we have a regional membership that isn't looking to us for a strong Web presence. So in our case, we're using the Internet as an extension of what we're already providing and communicating elsewhere. Understanding our purpose and priority has helped us design a site that is fresh and dynamic, but simple," Feinberg says.

* Don't get too glitzy. You can also eliminate the bells and whistles. Diane Dow, Internet services manager of the American Society of Cataract and Refractive Surgery, and the American Society of Ophthalmic Administrators, both of Fairfax, Virginia, recently spent $1,000 to add a feature that would provide the capability to do simple surveys online, with the ongoing capability to change questions as often as desired. Originally she wanted to ask questions so that responses would automatically form a pie chart, but she found that option too expensive. "That's always something we could add later if we see that enough members are accessing the surveys," says Dow. For now, members still get the information, albeit without the graphic.

* Do it yourself. Many have likewise learned that ongoing maintenance of their Web sites can be more cost-effective when brought in-house. Michele Morgan, webmaster for the National Kitchen and Bath Association, Hackettstown, New Jersey, says NKBA previously had a large site maintenance bill of $3,000 to $5,000 each month. The association recently switched host providers and brought its maintenance in-house.

Doing so, however, has required more attention to staff training on the specific software that supports association Web activities. Currently $8,000 of the $87,000 NKBA has budgeted for its Web-related activity is for staff training. "New software - software you don't even realize you need until you go to do something - will inevitably become part of the picture. A training budget is essential, especially if you're doing your own site maintenance," says Morgan.

* Account for site maintenance. "As important as training staff is ensuring that they spend the necessary time it takes to keep your site updated," says Alan Curtis, vice president of MemberWare Technologies, Rockville, Maryland. He helps associations plan and design their Web sites, and one of the biggest mistakes he sees associations make is not keeping their Web sites fresh. "So often you go to a site and read promotional copy for an event that has already passed," says Curtis. "Content maintenance is imperative, but it's so easily missed." Subsequently, many associations miscalculate the costs associated with maintenance - whether done in-house or outside - including the time it takes to write new copy, convert existing copy, and delete old content, he says.

Typically, Curtis notes, organizations assign the ongoing updating of Web site content to a junior person with little authority to make demands on the various people responsible for writing the information for their respective departments. What is generally assigned as an add-on to an existing junior-level job becomes much more than that as the person must continually follow up on requests to get people to provide the material. In the end, costs go up because the organization inevitability loses control of a lot of information and must hire other staff - if even temporarily - to clean up the content of the site.

Curtis suggests, "It is better to begin with a half-time person, giving them the tools, training, and authority they need to follow through. If you do this at the outset," he concludes, "you have a much better chance of controlling the site and controlling costs. Depending on the complexity of your site, the number of changes that need to be made on a regular basis, and how often the site requires updating, it may actually cost you less to outsource the work. It's worth making the comparison."

Forming Web partnerships

One way some associations are getting the most bang for their Web buck is by forming Web partnerships. The International Facility Management Association is currently at work with several other associations with similar goals and membership types to offer online education, says Ewton. She was able to secure development funding from IFMA reserves to build the structural foundation, and the association is already in the midst of course development - currently outsourced costs averaging about $40,000 per course. Five courses are scheduled for completion by year's end and another two are planned for mid-year 2000. Pooling staff and financial resources with these other groups will provide an even greater benefit, Ewton notes.

"Each participating association will commit to developing one course per year, including course funding and development and securing subject matter experts. They also will be able to take advantage of the system that IFMA already has in place, thus saving on start-up costs. Ultimately it will also cut IFMA expenses," claims Ewton, who estimates a savings of at least $400,000 during the next three years as a result of being in partnership with other associations that will share the expense of course development for the online university.

The Tri-County Apartment Association's first attempt at a partnering arrangement brought home the truism that you get what you pay for. "Being late coming to the Web," says Feinberg, "I thought I'd try to have our site developed at no cost. In a nutshell, we launched our site about 18 months ago under an agreement with our Web provider that it would develop and maintain our site in exchange for our marketing its hosting and design services to our members," says Feinberg. Part of the problem resulted when the provider branched into another direction of online business and put its focus elsewhere, notes Feinberg. "They were late with everything and the site was never fully implemented, but since we weren't a paying customer, we weren't a priority. In turn, we became reluctant to market their services."

The bottom line, Feinberg states: His association got 75 percent of its site development, nearly two years of hosting, and a good education, at no cost. Meanwhile Feinberg went through the request for proposals (RFP) process a second time - still seeking an arrangement whereby the association would receive a cost break, but definitely looking to pay something this time so that it would be treated as a client. His association's new site launches at the end of this month. "We're using the same company that produces our membership database for our site design and hosting," says Feinberg. "The added benefit is that this will ensure that our Web activities integrate with our membership database, allowing members seamless access to our members-only section of the site and allowing us to incorporate online ordering for products and event registration." Because this company isn't in business specifically for Web design, Feinberg is also negotiating an arrangement with another Web company to offer discounted Web design services to members, with a revenue-sharing arrangement for the association.

Testing your Web provider

At some point in the process of strategizing, developing, or maintaining your association's Internet presence, you'll inevitably need the services of a Web services provider. Association executives interviewed for this article agree that pushing providers for the specifics of their proposals and quotes can save you time, money, and headaches.

"Really question your provider," says ASCRS's Dow. "When they say it will take them a week, does that mean a week's worth of eight-hour days, or that it will take them a week to get around to it? Ask them to give you a breakdown of everything included in their quote, since rates vary dramatically depending on task and from one provider to another."

"Review contracts closely," adds IFMA's Ewton. "You may think that everything you want to do is included in the start-up costs, and it may not be." Likewise, when hiring a development company, make sure it has experience with your type of systems, understands your organization's philosophy, and listens to your plan of direction, she says. "Reputation isn't always a reliable reason for making your choice. Check references and make sure those organizations had the same type of work done, since performance can vary depending on the task."

When evaluating a potential new Web services provider, NAPM's Tracey advises working on a small project first, if possible, rather than entering into a full-blown site development or redesign.

Finally, Lee, of Fusion Productions, says that one good way of sizing up potential Web services providers is by looking at the number of questions they ask and what types of questions they're asking. "Realize that in an industry as young and as rapidly evolving as the Web is, many providers may be doing something for the first time," says Lee. "Articulate what you want, and avoid using common buzzwords like knowledge management and one-to-one marketing when you prepare your RFP.

"Don't be surprised if a vendor asks you many questions about what results you want; what unique behavioral or cultural issues within your association may affect how you want certain applications to work, feel, or look; or what reports you will need the system to provide. In fact, if you don't get about a dozen questions from a provider about what your needs are and what you're looking for, it's not a good sign from the start."

Resources for Calculating Costs

Especially when first developing a Web site, the options - and what each might cost - can be mind-boggling. Online help is at hand along with some ASAE publications.

Here are two among a multitude of Web sites that will ground you on the topic of Web expenses.

* MemberWare Technologies, Rockville, Maryland, helps associations plan, design, and reengineer their Web sites. Included on its Web site is a list of suggested Web site features for associations that charts various options and tells if it's typically a one-time cost, if it requires ongoing review and revision or other technologies, and whether the option has revenue-generating capability.

* NetMarketing, an online industry publication that tracks and reports on Web-related costs, conducts a monthly survey of Web developers to compile its Web Price Index. The monthly study makes comparisons by way of three hypothetical companies of various sizes and at various stages with regard to their Web needs. The publication also tracks Web trends, such as salaries and price ranges for services depending on geography and other factors.

Benefit from the ASAE bookshelf by referring to the books recommended here. To order publications, request by product number (indicated below) from ASAE's Member Services Center by phone, (202) 371-0940; fax, (202) 371-8315; or e-mail, Shipping is additional.

* World-Class Web Sites, by Don Dea and Hugh Lee. Use this easy-to-read guide to evaluate your association's current Web site or to help in the initial design stage of a new site. By referring to case studies of selected Web sites, you can perform a diagnostic check-up of your own site and how you might capitalize on it. Request product AMR218074, priced at $21.95 for ASAE members and $26.95 for nonmembers.

* Association Technology Trends 1997. Reviewing the current state of technology used in associations, this study thoroughly examines the development, use, and financing of Internet activities within associations. The study assesses the technology use of nearly 1,200 associations and is designed as a management tool for association executives to benchmark or compare the technology use in their organizations with that of similar entities. Request product AMR213572, priced at $48 for ASAE members and $58 for nonmembers.

* Associations On-Line: Making the Most of the Internet. This ASAE background kit is a collection of articles from ASAE publications and other sources relevant to the subject of association Internet use. It includes an overview of the subject, case studies of Web site development, and discussions of Internet marketing applications, legal issues, and staff use issues. Statistics from ASAE surveys are provided as well as an extensive list of other resources - including many Internet sites. Request product AMR121118, priced at $55 for ASAE members and $66 for nonmembers.

RELATED ARTICLE: Beyond Web Technology

High-powered technology is only half of what's behind today's truly sophisticated Web sites. "The real level of sophistication goes beyond the technology tools used to how associations are realizing and understanding the depth of impact the Web can have," says Hugh K. Lee, president of Fusion Productions, Webster, New York. "A sophisticated discussion forum goes beyond your ability to throw something up on your Web site and let it rip to how the association is collecting and using what comes from it."

Fusion Productions Co-founder Don Dea uses the example of frequently asked questions, or FAQs. "When I think of a sophisticated use of FAQs, I'm not talking about a list of answers to common questions about association membership. I'm talking about incorporating the forms of artificial intelligence an association has the ability to provide. By taking the huge body of learning captured in all the questions members ask and the discussions that transpire - at meetings, through e-mail lists, and elsewhere - you can then collect and compile it and make it available to everyone at once. That is the real power of the Web. What, for instance, has been discussed among your members about ethics in your profession or industry? That might be a good discussion to share on your Web site," suggests Dea.

Personalization and use of relational databases to build member profiles is another example of pairing a sophisticated technological tool with a savvy approach to marketing to and serving your members, says Dea. "The hard costs for these are the energies of the association to develop the blueprint and architecture to organize content and to understand how to index each element," says Dea. "Data mining is about how you look at what you know. It entails asking the right questions, forming hypotheses, noticing trends, and looking at member demographics. You start taking your data and cutting it in different ways to see who might be interested in what."

Although a complex undertaking, you can keep such a process manageable by incorporating one element at a time, says Dea. "Take your association's news, for instance. Break it into key segment areas of who would be interested in what. Build your database around that, and then use the power of technology to deliver your news to members based on their personal interests. This process will get your organization conditioned to thinking about that kind of segmentation so that it can make this same thing happen with all your association's collective knowledge and wisdom."

One example of a sophisticated association site with regard to the technology employed and its implementation process is that of the Reston, Virginia-based American Institute of Aeronautics and Astronautics, which last month launched its Aerospace Resource Center. Among other things, ARC includes a relational database that houses AIAA's membership database, products, and services, and a citations database of electronic copies of scores of scholarly papers from the aerospace industry throughout the world from the past 20 years. Included among these papers are the 4,000 to 5,000 papers presented each year at AIAA conferences.

"This represents a huge endeavor," says Steve O'Leary, program manager of AIAA's Electronic Information Services, a separately funded Web and technology research and development arm of the institute. "AIAA conferences are the venue where most new information within the industry comes from. By offering such a repository of information that is searchable, researchers from around the world will benefit."

While initial plans were to launch the center at the end of last year, delays occurred when association staff realized the complexity of the project and what it required in terms of mapping the architecture of the database. "it wasn't until April of this year that we even let our vendor start programming," says O'Leary. With regard to the Web, he says, "It sometimes can be like opening a jar and finding endless possibilities inside."

Karla B. Hignite is a freelance writer and editor based in Richmond, Indiana. E-mail:
COPYRIGHT 1999 American Society of Association Executives
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Title Annotation:associations' establishment of Internet World Wide Web-based addresses; includes related article on Web technology and Web sites providing information on Web development cost options
Author:Hignite, Karla B.
Publication:Association Management
Date:Oct 1, 1999
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