TCO vs. ROI
The difference between
"I can't afford to" and "I can't afford NOT to"

• Payback
• Return on Investment (ROI)
• Total Cost of Ownership (TCO)

These are terms that have been around for decades and are active concepts for those companies who spend their money carefully and wisely. While these ways of measuring the benefits of a particular deployment are in vogue, now that there is a slowdown in the economy, the reality is that they have always been a determining factor in what kinds of implementations a company undertakes.

What metrics does your company use? How does the organization determine whether or not to give the green light to an IT project? Regardless of whether you use ROI, IRR, TCO, NPV, or some other acronym or financial concept, the whole topic boils down to one question during this downturn: "What solution will have the most positive impact on the bottom line of the company in the shortest period of time?"

If you are asking yourself, "Where can I find the biggest 'bang for my buck'?" the answer lies in a solution that will immediately improve the way your company operates, immediately changes the way information is shared among workers, and immediately changes the way the organization thinks about its customers, partners, and suppliers.

dataSIGN will help you apply BEST PRACTICES to improve the way your company does business, and in a very short period of time.

The typical dataSIGN implementation obtains a first year cost savings of $55,275 and an on-going annual cost savings of $104,775.

Points to Ponder:

How about all the other people in the organization that support production?  Sales, Purchasing, Accounting, and even administration personnel are another form of indirect labor.  How efficient are those people?  If they're spending time looking for and retrieving information to do their job function, are they doing it efficiently?

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• Will ERP help us to improve customer satisfaction? How? How much and when?
• Will ERP contribute to increasing our market share? How? How much and when?
• Will ERP decrease our operating expenses? How? How much and when?
• Will ERP help to increase revenue? How? How much and when?
• Will ERP decrease our inventory investment? How? How much and when?
• Will ERP shorten our order-to-delivery cycle time? How? How much and when?
• Will ERP help us keep pace with or surpass our competitors? How? How much and when?
• Will ERP shorten our time-to-market? How? How much and when?
• Will we be able to reduce our material costs through improved supply base management? How? How much and when? The Purchasing function typically contains both materials and outside process purchases. Cost savings are realized through group or bulk purchase, shorter lead times, better inventory turns (due to tighter management of inventory levels), fewer physical inventories required, and an overall improvement in the efficiency and organizational level of the Purchasing department.
• Have we appropriately defined responsibility and accountability for these business performance improvements?
• What are the metrics for measuring performance improvement in both tactical and strategic areas?
• Other areas that contribute to the cost savings are shop floor tracking, quoting, and efficiency gains throughout the company.

Depending on your company's current manufacturing processes and management practices, you may save more or less than the amount shown in this example.  Even small improvements in critical areas like direct and indirect labor and on-time deliveries can lead to huge cost savings and additional dollars to the company's bottom line.  They all add up!

Gather the costs associated with continuing to do these items inefficiently and compare that to the cost of the new system. You might be surprised on how dataSIGN will pay for itself in the first year!