Business Software and ROI taking Greenax as an Example
Is it worthwhile investing in new business software? What is the return on the capital employed (Return of Investment or ROI)? Bison's pragmatic approach to problem solving uses multi-award winning Greenax Business Software as an example to show how ROI can be successfully estimated and achieved, both in theory and practice.
Bison has adapted the "ROI Analyzer" devised by the Center for Enterprise Research (CER) of the University of Potsdam for use with Greenax. Even at the preliminary evaluation stage, this method provides customers with clear pointers on ROI. A comprehensively structured questionnaire which flags up the customer's needs and current situation is at the heart of "ROI Analyzer". A systematic comparison of the customer's situation with practically tried-and-tested processes and functions yields concrete recommendations regarding optimization potential.
Procedure
The questionnaire deals with every area, from purchasing, sales, warehousing, production and finances through to customer care and business intelligence. To ensure personalized advice, the first step is to select the desired sectors and areas, thus selectively narrowing down the scope of the survey. Questions concentrate on cutting costs and increasing profits.
Success factors
Success models that have been proven in practice and that are based on the features of Greenax provide the basis for a high ROI. Greenax makes it possible to save direct costs by providing automatic procurement, warehouse management, inventory and financial accounting procedures as well as supporting sales through e-shops etc.
The fact that less capital is tied up means that the cost of capital is lower. Automatic warehouse management and processes such as consigning goods to an agent (warehouse at the customer's) and drop-shipping (goods are delivered directly from manufacturer to the customer) reduce average inventories and hence capital commitment.
New processes increase profits through higher sales, for instance by plugging directly into suppliers' and customers' systems, or through central management of leads and opportunities by Sales.
Calculation
The calculated ROI takes into account additional factors such as the typical learning curve for every project which eats into returns after every deployment. Experience shows that there is a time delay before the desired cost reductions and increased profits make themselves felt.
The quality of the computed ROI also depends on the validity of the business assumptions made. Probabilities of occurrence therefore make allowance for the fuzziness of these assumptions and indicated an upper and lower limit on the return that can be expected in practice. Finally, discounting also calculates the compound interest on capital in accordance with the conventional method of calculating ROI.
Results
The absolute level of ROI depends heavily on the situation of the company in question. This is why ROI can only be assessed in the context of specific case studies. Analysis results for a typical commercial enterprise (see Figure) show that investment is amortized within the first 2-3 years and also illustrate the effect of the learning curve, confidence interval and discounting on returns.
Summary
Greenax ROI Analyzer is a practical tool for thoroughly testing out the profitability of investments and systematically ensuring that the introduction of new software is based on sound economic findings.
The distinctive feature of this problem-solving approach is its structured analysis of the customer's needs and current situation by using processes and functions that have been thoroughly proven in practical use.
Greenax's special features are a basic prerequisite for implementing these success models: it is process and sector-oriented, flexible, open-ended and release capable. Greenax therefore meets exacting ROI expectations both in terms of computed values and in practice.
Procedure
The questionnaire deals with every area, from purchasing, sales, warehousing, production and finances through to customer care and business intelligence. To ensure personalized advice, the first step is to select the desired sectors and areas, thus selectively narrowing down the scope of the survey. Questions concentrate on cutting costs and increasing profits.
Success factors
Success models that have been proven in practice and that are based on the features of Greenax provide the basis for a high ROI. Greenax makes it possible to save direct costs by providing automatic procurement, warehouse management, inventory and financial accounting procedures as well as supporting sales through e-shops etc.
The fact that less capital is tied up means that the cost of capital is lower. Automatic warehouse management and processes such as consigning goods to an agent (warehouse at the customer's) and drop-shipping (goods are delivered directly from manufacturer to the customer) reduce average inventories and hence capital commitment.
New processes increase profits through higher sales, for instance by plugging directly into suppliers' and customers' systems, or through central management of leads and opportunities by Sales.
Calculation
The calculated ROI takes into account additional factors such as the typical learning curve for every project which eats into returns after every deployment. Experience shows that there is a time delay before the desired cost reductions and increased profits make themselves felt.
The quality of the computed ROI also depends on the validity of the business assumptions made. Probabilities of occurrence therefore make allowance for the fuzziness of these assumptions and indicated an upper and lower limit on the return that can be expected in practice. Finally, discounting also calculates the compound interest on capital in accordance with the conventional method of calculating ROI.
Results
The absolute level of ROI depends heavily on the situation of the company in question. This is why ROI can only be assessed in the context of specific case studies. Analysis results for a typical commercial enterprise (see Figure) show that investment is amortized within the first 2-3 years and also illustrate the effect of the learning curve, confidence interval and discounting on returns.
Summary
Greenax ROI Analyzer is a practical tool for thoroughly testing out the profitability of investments and systematically ensuring that the introduction of new software is based on sound economic findings.
The distinctive feature of this problem-solving approach is its structured analysis of the customer's needs and current situation by using processes and functions that have been thoroughly proven in practical use.
Greenax's special features are a basic prerequisite for implementing these success models: it is process and sector-oriented, flexible, open-ended and release capable. Greenax therefore meets exacting ROI expectations both in terms of computed values and in practice.