Client Service Center

ROI or VOI - How to measure your investment
Published on by CS3 Technology in Blog Posts

 

By:  Sheri Blaho

I have been working on a very complex sale for the past few weeks.   The company is swamped with excessive paper work, manual tasks, and spreadsheets that  backup even more spreadsheets.  Additionally they have two systems that are obsolete.  One system is actually an old DOS based application.

After reviewing all their processes, I documented them all and assigned estimated hours of time that is unnecessary if only they had correct systems and tools in place.  To my surprise, their management team did not feel the Return on Investment (ROI) was logical even though the team members had confirmed the hours. They just wanted a price and will buy on cost rather than "return on investment" or "value to improve."

Compare this to another client that I am working on at the same time.  Part of their business philosophy is what they term Value on Investment, beyond the typical ROI.    Hallelujah!   A client that not only "gets it" but one that embraces financial measurement as part of their overall business model.  They understand that soft dollars and intangibles need to be considered during any purchase process.

Specifically, they note the impact on employee satisfaction and employee retention.  They understand small things that improve the customer experience contribute to client loyalty.

Whether you are buying ERP software, HRMS software, computer hardware, phone systems or desks it is important to measure the true value: the value beyond how much it will contribute directly to the bottom line.

CS3 has embraced a sales methodology for years that does just that.   We examine all business processes and find hard dollar savings  (i.e. how to minimize inventory levels, how to decrease days in AR and how to eliminate unauthorized overtime).  We go to the next step and look for the soft dollar savings also (i.e.  duplicate entry of data into various spreadsheets, providing information to employees via phone or paper that could be readily made available online or an email alert.)

The soft dollar or labor savings can free up your staff.  That will allow them to accomplish more work and focus on more strategic activities that will help your business to grow.

Seem pretty logical. 

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