Sunday, March 1, 2009

Real life example of ROI – now it is your turn


vicinity software
I wanted to share a real life example of ROI and how yours truly ignored it for months if not years. I think I can also tie this into your business and formula manufacturing.
Last week we cut over our phone and internet service to CBeyond – a publically traded telecom based in Atlanta. While I was satisfied with my previous carrier my internal phone system was outdated and we had limited ability to change features without a series of expensive site visits. The phone system had to go – I knew that for years.
One day a month or so ago a solicitor for CBeyond stopped by my office. I used to get these visits into my office every couple weeks and I routinely dismissed them as an inconvenience. For some reason this time I gave them my card and told the salesperson to send me some information. What was I thinking?
Wouldn't you know it? Two days later I received a packet of information in the mail and a couple pleasant emails. Before I knew it I had an appointment with this salesperson in my office to talk about what they could do to help me with my business.
It was not until that face to face meeting that I had stopped long enough to see what I was doing with my existing system. I was paying my previous carrier about $1,500 per month for services that I did not need and did not receive services that I wanted. The salesperson was successful in showing me that I could get what I wanted for about $500 per month but I would have to change phone systems. Little did he know that a new phone system is really what I needed.
So like most people I bought myself some time and sent the salesperson away. In the back of my mind I was looking for why this deal was too good to be true. What is the catch? I had every intention of ignoring the data right in my face and continue down the path of my existing system. Honestly – I was not sure how much a new phone system would cost and was not interested in the change at this point.
I did not have all the data yet and was not ready to make a decision - much less a change.
A couple weeks later I was in a conference with some Microsoft Dynamics ISV owners - much like myself. The topic of internal phone systems came up and I asked the question - Has anyone heard of this new provider? Immediately a friend spoke up saying it was the best thing he had done in years and they were very happy. When I asked further about the physical phone system he replied that it was ridiculously inexpensive and he gave me the name of a consultant that does all the work.
48 hours later I had a quote for a phone system from Logic Speak ($3,000 for a 10 phone system) and we were off to the races.
The problem has been solved and we are a better company for the change. The total cost was $3,000 up front plus $500 per month in services.
Compare that to $1,500 per month. That is an ROI of 3 months! Every month after the first three months I am making $1,000 per month – and I have more flexibility and more control. THAT is a positive ROI.
So how is this relevant to formula manufacturers and how can you use my experience in your business?
How old is your existing ERP system? Did you replace it with the Y2K conversions? If you system is 10 years old you really should look around. You have gotten your value from your existing system and you may find that changing is not as expensive as you might think.
So here is the blueprint that I used for my phone system that I think is relevant to selecting an ERP solution.
  1. Identify if there is a need that has to be addressed – for me it was a better phone system
  2. Quantify that need – what cash will it bring into my company if I make the change? – for me it was reducing my phone bill from $1,500 to $500 per month – for you it may be reducing inventory or identifying low batch yields
  3. Talk to others about your issues and hear their solutions – search the web and find companies that specialize in your business. They have solved the problems before – leverage on what they have done.
  4. Engage with a professional that understands your business and can deliver the change that is needed. Be open and honest about what you are trying to accomplish and give the professional a chance to work with you to find a workable solution.
For me the key was in leveraging people that had been through the process before. I gained confidence in the hardware supplier immediately. He knew what he was doing. From there I let the professionals do their thing and got out of their way.
The result for us is a state of the art phone system that meets our needs today with a local service provider that makes our problems go away in short order and for a reasonable rate. I could not ask for better than that.
So if you are not getting what you should out of your existing system and you think it is time for a change then follow the steps above. Feel free to reach out to me and of course check out our solution at Vicinity Manufacturing . If you want to try out our phone system just call us at 770-421-1777 – we are a better company for the change.
I also feel it is important to share the names of people that have helped me in my successes.
John Stulak – Ethotech - Microsoft ISV friend who just switched to CBeyond and gave me the courage to move forward
Andrew Griffin – Cbeyond sales representative – he did all the right things at the right time
Jared Kee – Logic Speak Inc. – provider of phone system and the guy that made this work
So here is your take away:
  • What are the top 5 pains that is costing your money?
  • What is the value of solving those pains?
  • Who out there has solved these pains in the past?
  • Why am I waiting to solve these pains if there is a positive ROI?
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