With Sistrade implementation it's not only intended to install a printing and packaging industry management solution, but rather to implement a solution which brings a visible return to the company.
Although many professionals still consider ROI (return on investment) a mathematics exercise which suffers constant alterations and has errors, in this case, it means the fulfilled and accounted ROI in the number of months in which it will be returned to begin generating profit. That is, ROI tends to calculate how much time a company has to wait to recover from the effort (investment) in a technology implementation and, thus, respond if the investment is feasible or not.
Calculating ROI with Sistrade
Using an equation to calculate the savings obtained when implementing Estimates (Sales Module), we concluded the following:
If the estimator has an hour cost of about 10,00€, then:
Before Sistrade:
- Time spent calculating an estimate = 15 minutes;
- Total Cost = 2,50€;
With Sistrade:
- Time spent calculating an estimate = 2 minutes;
- Total Cost = 0,33€
At the end of the year, using Sistrade represents a financial gain of 16.000€ and a gain in time availability, which can be transformed in calculating more estimates, that is, for each estimate calculated in the traditional way it is possible to calculate 7 estimates with Sistrade.
So, if the total cost of implementing the system is about 15.000€ then the investment will be paid in less than one year. This calculation doesn't take into account other productivity gains, naturally intangible, such as:
- Immediate response time to an estimate request. How much is it worth?;
- Company's image that now sends fast and detailed estimates: How much is it worth?;
- How much is it worth the time availability that the estimator now has because it takes less time to calculate an estimate?
According to experts, success in ROI for any company that intends to implement an ERP solution resides in the following questions:
Will ERP increase customer satisfaction?
With Sistrade, customer satisfaction substantially increases, since one is now using state-of-the-art and up-to-date technology, with an easy, intuitive and interactive interface. The chance to access the system from anywhere in the world also represents added value to the customer.
Will it decrease management expenses?
Implementing the integrated management system - Sistrade, will directly turn into time reduction on daily tasks, and therefore in a decrease in management expenses.
Will it decrease stock inventory?
With Sistrade, the user knows in real time the existing stock, thus controlling more efficiently warehouse entries and exits. The information that the system generates allows the company to define warehouse exit rules in order to decrease the existing stock and simultaneously to increase stock rotation.
Will it be able to reduce material costs through improvements in purchase management?
Sistrade has a shop floor control module that includes tools for operations control, production follow-up, planning, industrial costing, and other, which essentially allows accurately calculating the real cost of a work order, schedule work orders and at the same time to control the times of involved production processes. Thus, the user can intervene in order to optimize the processes, operations, planning, resulting in an effective reduction of production costs.
Obviously, there are other factors, not so concrete, which can make a difference in adopting a project such as quality improvement, faster and more feasible services obtained with an I.T. investment, although, since they are of difficult measurement, these hardly are accounted when formulating ROI. In this case, the objective is purely economic.
This also explains how BSC (Balanced Scorecard) gains a space in evaluation measurement of I.T. projects since this tool analyses in a wider range the non-measurable profits. Not as a ROI substitute, but rather as a complement.
In conclusion:
For most of the companies that intend to invest in I.T. projects, ROI is not only a mathematical abstraction, but it's also rather a question of survival.
