Return on investment is an important consideration when making a major purchase. In most organizations, financial directors and board members will reject out-of-hand proposals that are presented without a potential return clearly stated in dollars and sense.

Sometimes the ROI metrics are easily quantifiable – consider upgrading from HPS to LED street lights. You already know the direct cost of replacement and the difference in energy consumption; it is easy to project when the investment will be amortized.

What about returns when the gains are less tangible? How do you sell the board on, for instance, a software product that improves data models and work flows like TST offers, but does not pose a readily obvious investment return?

How do you quantify those intangibles in a meaningful way?

The general answer is that you have to paint with a broader brush. That said, simply making sweeping assertions about efficiency gains won’t work. Apply these three rules when building your business case:

  • Separate out the tangibles. This is the easy part. Find the components where there is an identifiable metric. Consider the elimination of an entire class of redundant transaction entries, especially when the number entries per year, and the average time per entry. Those are easily measured and relate to a direct cost-benefit analysis. The more of those you can find, the more credible the case.
  • Admit that the intangibles are just that. If something doesn’t lend itself to simple financial metrics, say so. Do not be afraid to point out that a better digital plant model will make the E&O side of your utility operate more efficiently; but that nailing down every possible impact just isn’t possible. Speak to the frustrations of the E&O staff and how these ‘intangibles’ will improve their quality of life. Life is full of intangible interests that are realized intrinsically; for instance, the potential gain from a student learning a particular language or math skill is inarguable, but the value of that skill cannot always be directly measured.
  • Put a number on everything. If you cannot put a financial ROI on, for instance, “a more comprehensive mapping model”, you can still quantify the benefits with a reasonable range of numbers so the expectations of those benefits can lend to themselves. For instance, if your gut feeling is that improved maps can make line crews 2 – 5% more efficient, and engineering personnel 15 – 25% more efficient, use those values establish a range: 2% of annual crew cost plus 15% of annual engineering cost for the low number, and 5% of crew cost plus 25% of engineering cost for the high number. By doing so, you’ll have shown that you have you’re your homework.

Buying software that works well means investing in business process improvement. With software comprehensive enough to impact many staff across the many departments of a utility, there are many facets of defensible financial gain. By investing the time to properly quantify and express the fiscal as well as intangible benefits in detail, it is assured that the preparation will pay off.

Let us help. Schedule a demo and we’ll show you all of the areas where work flow automation can improve the efficiency of your utility.