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...?

While looking at ways to increase the value of your company, increasing revenues and decreasing costs are usually at the top of the list.
One way to decrease costs is to be more efficient. We believe that efficiency provides many more benefits than just decreasing costs. Many of our prospects see 2007 as the year to address efficiency...

Efficiency

I like the definition I found in one dictionary - It describes efficiency as the ability to do something well or achieve a desired result without wasted energy or effort.

Automating your processes can eliminate many manual tasks or steps within a business process. If your business processes were to take less time to complete, what would that mean to you and your company?

1) You could use the extra time to improve the quality of your designs. You could use the time saved in a manufacturing process to improve the quality of your products.

2) Shorter business processes usually means you can bring your products to market sooner. Some of the benefits of getting to market sooner include: 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.

3) A shorter business process should reduce your costs giving you more latitude in creating competitive pricing.

Our Thoughts…

We are really into efficiency. As you might imagine, all of us at Ingenuus always on the lookout for efficiency. Since we don’t have a lot of employees, we need to do more with less. We do have an instance of our software up for our use and are using it. Could we use it more? Yes. And, that is our plan for 2007.

Your Thoughts…

How will you address efficiency at your company in 2007? Is efficiency mentioned in your business objectives? Is efficiency a topic at management meetings? Let’s discuss how we might be able to help.