Practical Return on Investment
Over the years a considerable number of Enterprise Mobility projects failed to get off the ground because of failure to secure project funding due to weak business cases. This article will explore the specifics of practical Return on Investment, including and avoid falling at the first hurdle through a lack of understanding of the expected ROI. It will include suggested methods of calculating this and incorporating it into the ROI calculation.
This guide will explore tangible benefits that can be proved after deployment and how they are achieved. It will then walk through an example, which is based on a real company, and draw conclusions on the benefits that can be confidently used in a business case.
In a process based environment, it is possible to map out your current workflows and create a model of how the implementation of a mobility solution will impact upon these.
Let’s consider some of the features of mobile solutions. Listed below are some of these:
· Remote dynamic data capture
· Vehicle tracking
· Workforce visibility
· Real time status updates
· Workforce reporting
· Spare parts ordering
· Work planning
· Signature capture
· Same day invoicing
· Process compliance
· Dynamic database updates
· Event costing
· Technical data distribution
· Intranet access
· Best practice
· Automatic job closure
· Work audit trail
· Work order/job dispatch
· Health & safety procedures
· Time sheet reporting
These mobility features offer a wide range of benefits, and yes they’re all real. They all offer business improvement; many of them offer cost improvement by reducing fixed overhead or increasing revenue. Many of these benefits are indisputable as contributing to business improvement, but few of them can be absolutely relied upon as part of your business case. Why? Proving their realisation after the project deployment is very difficult. Firstly we must separate these features into those that would benefit your business the most and those that can be measured and therefore provide a tangible return on investment.
So what could be determined as a measurable benefit?
Improved Customer Service
Customers retained equals revenue protected
Better KPIs / performance
Event cost reduced and revenues protected
Fixed overhead reduced
Increase competitive advantage
Improved data integrity
Administration and re-work costs reduced
Improved workforce moral
Empowered workforce; reduction in training and recruitment costs
Improved management data
Strategic decision making
Above are generic examples of where organisations have recorded tangible benefit, post implementation. There are two factors common to all these examples: Firstly, they’re all incontrovertibly real and make a difference in terms of profitability; but secondly, they are all more or less impossible to put a value against prior to deploying the solution! Having said this, it is my experience that many supporters have tried to implement and met with some severe resistance following boardroom scrutiny. Not that I am suggesting you should ignore any positive change that mobility solutions can bring, however, if measurement is difficult then by all means include these in the business case, but not in your return on investment calculation.
Most businesses target productivity improvement and headcount reduction/refocus through saving minutes-per-case of the remote workforce time. This is a good approach provided that appropriate due diligence is undertaken, see the example below which has in the past caught out many managers.
“So if we remove the necessity for our Inspector to hand write a 15-minute report by providing him with a PDA on which he can collect the same data in 7 minutes, we can create sufficient excess capacity for each Inspector to do one extra job per day!”
Well…maybe, but are you sure you can turn that extra capacity into extra productivity?
Or will your Inspector just go home earlier?
What we need to do for a solid business case is to focus on real, tangible, easily measurable benefit:
Here are some fundamental examples:
Elimination of manual process
Reduction in staff time to complete
Reduction in material overhead (stationary)
Reduction in fuel costs
Reduction in voice telephony (replaced with data)
Reduction in communications costs
Reduced billing cycle
Cash flow improvement
These examples are areas where we can demonstrate a realistic quantitative approach by the production of sufficient incontrovertible evidence to justify the investment – obviously this needs to be a bigger number than the solution’s Total Cost of Ownership! It also needs to give the board confidence that this really is a major step forward in improving the business.
Using this simple but practical process to calculate your own return on investment should assist in securing board funding for your project. So why not start the process today ? However, be aware that once your enterprise mobility project is deployed you will probably be asked to prove you have realised your business case, so make sure you follow through by instigating all your proposed actions of your business plan.