Project Management

Justifying the cost of any solution through tangible savings is the quickest method to obtain management approval. However, quantifying cost savings presents some unique challenges, as not all of the savings are apparent or can be easily measured.

Before cost savings can be estimated, it is important to understand the current processes or “As-Is” state of the business to create the baseline needed for any comparative analysis. Then, when looking at the “To-Be” business processes and related costs, it is important to look beyond the obvious and consider all the areas that will be impacted.

Both direct and indirect costs need to be considered. Key areas of savings are:

  • Time savings, and increased utilization of resources
  • People savings
  • Reductions of inventory and space
  • Improved customer service
  • Improved quality

A high percentage of projects using automated data collection typically see paybacks between 3 months to 2 years. Even when the estimated ROI does not meet desired rates of return, it is possible to justify solution costs as an investment in business improvement that can have longer-term returns and which is important to the growth of a company.