SIMMS Inventory Software Solution ROI

The main point in calculating ROI (Return on Investment) on a new software solution is to see if it makes financial sense for your business. While cost is a key consideration when evaluating software ROI, usually the financial benefits far outweigh the costs.

Below you will find a brief overview to calculate or project ROI. There is more detailed information on the Internet and this article is just a brief overview.

ROI Formula

ROI = Payback/Investment x 100 = x%

Payback = total amount of money earned

Investment = the amount of resources generating the payback

For example: if you invested $10,000.00 in software and in turn it created $20,000.00 in revenue, then the calculations are:

$20,000.00/$10,000.00 x 100 = 200%

Even though the ROI formula is basic there are numerous tangible and intangible cost factors in calculating true investment costs and true payback.

simms roi

Investment Factors

Hardware Replacement

New software in many cases means new hardware in order to properly take advantage of your new asset.

What is the point in having the latest and greatest software while your staff loses valuable time waiting for the system to respond? Consider this example: if your staff has to wait an extra 15 seconds when they press enter or click when you extrapolate the dead time it is simply amazing. Click response time should be instantaneous.

Business size is also a major factor. The number of users dictates server size and power required. Other considerations related to hardware include IT staff, backups, bandwidth, security and maintenance.

Purchased versus Hosted

SIMMS Hosted services are in a Citrix environment, which is the gold standard of internet security. Users simply open a browser and enter their user id and password.

Hosted services will drastically reduce initial hardware costs with several benefits that many simply could not afford on a smaller scale. With our SIMMS hosted options you can usually continue using your existing computers. The advantages are simple:

  • SIMMS Hosted includes bandwidth so there is no need to have an expensive on-site internet connection.
  • SIMMS Hosted includes backups -- we use specialized backup servers.
  • SIMMS Hosted includes Enterprise Software. In addition to SIMMS software we use SERVER 2008, SQL 2008 Enterprise and Citrix. Enterprise-grade software runs faster but is only cost effective on larger scales.
  • SIMMS Hosted is run on top-calibre hardware. We use Quad Xeon processors with maximum RAM. When you add in the Enterprise Software mentioned above you are looking at an easy six-figure investment to duplicate.
  • You have access to unlimited bandwidth.
  • If a server blows up, it is our problem and expense.
  • Conserve capital for expansion when the full benefits of your new system kick in. You pay $n per user per month.

Staff Training

Staff training has to be factored in. Also, during implementation of a new system there will be a brief dip in productivity during the switch.

Payback Factors

Competitive Advantage

With our integrated solution and wide array of features you can do things your competitors cannot. The easiest way to project the payback is to think of deals previously lost because a competitor had features you did not or a client whose needs were just out of reach. You will be able to close deals you could not even consider with your old system. These types of payback factors should be part of your ROI projections.

Improved Efficiency

SIMMS is 15 years old and has been thoroughly tested in the trenches. We have many features that will save time while improving accuracy and enhancing inventory control.

To figure out potential savings compare the screens in SIMMS with your present system. Then compare work flow. The efficiencies will be become obvious. You will find that some staff will have up to 20+% of their time freed up as SIMMS handles large transaction volumes with ease.

Example: If you have a person who processes sales orders for eight hours a day, with the SIMMS Fulfillment Module they can do the same work in less than half the time. The differences are that dramatic. From this example, the time savings and the subsequent revenue a staff member can generate should be factored into your Payback.

New Revenue Streams

When you have the right tools and platform you can handle any twist your clients and marketing gurus come up with. We briefly touched on how our robust serial number tracking could give some marketing campaigns an added dimension.

We'rem sure you already have some great new revenue streams ideas tucked away that simply can't be implemented with your present system.

When doing your Payback projections you have to eliminate the limitations of your present system and put them out of your mind. Look at the landscape through a different set of glasses.

Read More

Collapse