ROI

When analyzing returns on investment [ROI], there are generally 2 key areas to analyze - hard costs and soft costs. In the case of business process management, most people are looking to shorten cycle times.

Hard costs are those costs that happen all the time and are relatively easy to document. If a process used to take 20 days and now it takes only 10, you ought to be able to come up with some real dollars.

Soft costs are ‘soft’ because either they don’t happen all the time or you will have some difficulty putting a dollar value against them. A mistake could cost you very little or be devastating - what number do you put in an ROI analysis? If you just wish to be more organized, what number do you put on that?

Our Thoughts

Hard Costs

We have identified some places to look for hard costs:

• Shortened cycle times
• Automation of certain steps within a process
• Ease of use
• Removal of duplicate steps or activities
  

Soft Costs

It is more difficult to put dollar amounts to soft costs. This becomes very subjective, but we can identify some places where efficiency can lead to:

• Shorter time to market = More revenue, More market share, More traction in the mind of the consumer, More easily position your products, Begin developing a ‘barrier to entry’ for competitors sooner, Etc.
• Product Quality
• Shorter processes should reduce product costs
• Mistakes & errors [A while ago, a customer owned up to a $2M mistake]
• Improved Company Image
  

Our solutions provide solid returns on investment. Examples: On the low side - the payback on managing the creation of legal documents can happen in about 6 months. On the high side - Our largest customer [a contract manufacturer] saves $1 million a year.

What are your thoughts...?