When youb re contemplating making a substantial purchase decision, how do you know whether it will cost-justify itself?B Well, I put together just this sort of analysis recently for one of our customers considering a new phone system purchase.
Hereb s a few suggestions for any thorough evaluationb &
- Make sure you are clear about the costs you are currently incurring.B Some of these costs may be b buriedb and require a bit of detective work to uncover.
- Ask plenty of questions to develop the b all-inb costs associated with the purchase.B Watch for b hidden costsb that will be incurred for maintenance, improved features/functionality, etc.
- Create an hourly cost for each staff member.B This can be actual cost or lost opportunity cost.B For example, an employee making $60K/annual might cost $35/hour but bill $100/hour.
- Evaluate the estimated time savings per employee for each feature/functionality improvement.B The savings can add up really quickly even if the time savings is only a few minutes per day.
To give you an idea about how this calculation looks using our example from above:
Feature Time Savings=5 minutes/dayB B B B $2.92 ($35/12) X 225 (work days/year) =$657.00
So, just using the lower cost rate of $35/hour results in an annual savings of $657b &only saving 5 minutes per day!B It can be very helpful to go through this exercise when youb re considering implementing any technology improvement.
