Skip to main content

ROI Calculations and the real world

In business to business sales, it is key that the sales consultant understands the full value of the Return on Investment for the purchaser.

There are beautifully designed models which clearly indicate the financial savings that will create bottom line advantage for the purchaser.

We do it too.   When selling Time and Attendance and Employee Self Service there are very clear savings, with T & A the key is better control reduces costs, and with ESS there is significant time saving .   We have done calculations on ESS that a 500 employee company can save upwards of 12 man months per year, by implementing ESS.

Terrific!   But the question is what do you do with that time.   A strong selling point for most people management solutions is that it allows the management to become more strategic, as the software solution reduces the administration overhead.   And it does, in some companies, but when it doesn't, there are reasons.

Some are:
  • A lack of forward thinking and planning
  • Ineffective change management - users, management and staff all need to be part of the process
  • Ineffective project management - this is a partnership between supplier and user that can become a blame battle, instead of a clear path towards an effective solution
  • Rather than using the extra time available more effectively, the remaining workload gets spread over longer time periods (Again, forward planning can help with this)
  • The staff were so overworked before that the change is in allowing them to go home at 5.  This, of course, can have a very positive effect on morale.
  • Failure to launch 1 - the project takes so long to get going that internal savings are expended on the implementation phase
  • Failure to launch 2 - the staff do not feel empowered during the implementation process and are not fully on board with the project, and so continue to utilise old processes with the new solution
  • The model used to calculate the ROI uses assumptions, and variations in the project are not factored into the model
  • The input data is not aligned with the purchaser's business model, and makes a decision based on incomplete information
  • And sometimes it is just the wrong solution!
While project and change management do add cost to rolling out solutions, they are worth it, if done effectively.   Then watch that ROI.....



Links and References

Accsys PeopleWare

Note

Thank you for reading Teryl@Work.   Should you wish to use any of the material, please acknowledge this blog as the source.

Popular posts from this blog

Agile workers & workspaces - a new way of working..

Being an agile worker is still a work in progress…
Is flexibility now a reality in the workplace?And is it really working? We keep renaming it – remote, activity based and agile work being some of the current terms. The assumption of control over one’s own time and deliverables does look like a great way to work and live, and it seems to be is a high priority for those entering the business world. There is also the development of the agile work space, where people come to the office each day, but don’t have a fixed work area.We used to call it hot desking back in the day and it met with mixed success.Today, office designers have started to create work spaces which are intended to encourage innovative thought, cross departmental collaboration and improved productivity. My research indicates that the mix of engaged and disengaged employees in an open plan workspace does not always have the desired effect of the positive workers influencing the culture.In fact, a case study of a senior execut…

Setting Budgets and Targets

Does too much of a stretch impact motivation?    Over many years of setting (and trying to achieve) targets and budgets, getting the balance right between stretch and motivation remains a challenge.

I love Jim Collins and Jerry Porras and their BHAGs in their great book, Built to Last, but if the goals are seen as unachievable too early in the business year, what then?

Is there a way for businesses to achieve success without budgets and targets in place?

Two old favourites " You can only manage what you can measure" and "People do what managers measure" suggest that they can't.  I am sure there must be successful businesses with different methodologies, but most of us need to work towards something.

With that in mind, I think there needs to be stretch, and there needs to be a sense of achievability.

Why would you race against Usain Bolt unless you think you could win?

The same goes for budgets and targets, people need to believe they are possible.

So how do you…

The Gig Economy - HR and other issues

The Gig Economy has emerged as a topic of discussion and I understand that Intuit has posited that 40% of US workers will be independent contractors by 2020.  That is 3 years away! What is a gig employee?  Uber, Lyft, and Airbnb all utilize gig employees as the delivery mechanism for their apps.   While they are all clear that they are just an App and don’t employ the gig employees, governments and employer bodies are analyzing the risks and reports are indicating that they are significant. As a contract worker, which is how Uber defines their drivers, there is not an employer/employee contract in place.    While Uber, and other similar companies, create the mechanism for people to deliver a service, they consider themselves brokers, for want of a better word, and not employers. The UK is looking into the situation and considering legal structures .  The concerns are particularly when people have a single source of income, although they are not formally employed.  This leaves them in a …