Do-It-Yourself ROI
We’re noticing recently that finding a DTC systems vendor that can actually assist its prospective clients with doing an ROI study isn’t as easy as it should be. In other words, companies interested in purchasing or upgrading major systems may have difficulty finding DTC vendors who have a way to help them figure out how they’re going to pay for that new system.
As a company looks to update its major systems, departmental management is required to prepare a formal feasibility study and estimated cost savings. This is not a small order—what we see consistently is that replacing order management systems, telephone ACD, and e-commerce platforms requires major capital expenses for many businesses.
If vendors want to sell more software, they need to become far better at helping customers understand how the installed application will make their businesses more efficient. Just how will that significant help expand and grow the business? What are the tangible savings? We’re talking about head count savings; inventory turn improvement; reduction in expenses such as maintenance or outside programmers; reduction in the cost per contact, call, or order; reduction in the number of critical errors; improved cash flow; more targeted mailings at the category level.
What are the intangibles the buyer can expect from installing the system? Those might be anything from improved customer service to flexibility in management reporting from data-mining applications. The benefits will be different from company to company depending on the capabilities of the prior and new systems.
The question is, how does the purchaser determine what the benefits will be, and whether they will be worth the cost. If a vendor can’t help provide the information, that obviously leaves more work for the company to do.
It’s a complicated topic, but the scale of possible expenses in purchasing major system makes it that much more important to pay attention to. For more ideas on how to proceed with an ROI study, contact us and we can share with you an article that we wrote on the subject.
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