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Solution - ROI and ROO
Atlantic Global customers have enjoyed hard line savings and operational benefits through our suite of software products and services. Although there are many benefits we can measure, it is good to take stock of some of the less tangible benefits, which can be delivered. Rather than use the Return On Investment to reduce the cost base, as processes become more efficient, use the increase in people´s available time for more value-add activities and realise a Return On Opportunity. This paper will detail some of the key functional components of the Atlantic Global suite of products and link them into the business processes that can be made more efficient.
Return on Investment (ROI)
Return On Investment (ROI) considerations are often about corporate maturity and culture. If a portfolio of projects is competing for discretionary spend, factors like Net Present Value (NPV) together with ROI are more important than ROI alone.Traditional ROI analysis is useful for supporting bottom-line questions such as "How much will I earn back on my investment?" and When will I achieve payback?"
This type of quantitative, financial based requirement for return is a very compelling driver for change yet is only part of the overall picture, when looking at potential tangible and intangible benefits. Therefore ROI can be a useful, but not a totally compelling argument. The rationale behind any project carried out by a commercial organisation should either be to deliver cost savings, improvement in revenues or both. However it is only effectively managed projects that retain a link to strategic initiatives that can deliver on the above. Cost savings can either be delivered by reduction in headcount or these cost savings gained through efficiency improvements can be used to improve customer service or vendor management or less tangible measures, such as training, mentoring and the like Now let us consider this type of additional measure: Return On Opportunity (ROO).
Return on Opportunity (ROO)
ROO analysis helps organisations define and quantify potential top line benefits, benefits from deploying new business processes, including revenue, market capitalisation, an increased customer base and decreased attrition. ROO analysis is most effective when it crosses departmental boundaries, integrates disparate capabilities and provides capabilities that an organisation didn´t have or had not addressed before. All good companies invest to move forward or consolidate against the competition; non-investment is equated with a company moving backwards or retrenching. Thus leading edge or early adopters of technology may utilise ROI and ROO methodologies, but not necessarily. The followers, who are the majority will apply ROI/ROO analysis and scrutinise spend, so any potential solution must offer short, medium and long term benefits.
Potential Areas of Benefit
The types of intangible benefits emanating from a solution implementation can be in such areas as:
- Mergers and acquisitions
- Business process re-engineering
- Cost reduction programmes
- New product launches
- Six Sigma programmes
- Prince2 deployment
- Business improvement programmes
- Training programmes
- Reorganisation impact
- On-shore/off-shore analysis
What can be lost or missed after successful project delivery is the application of the derived cost savings, the money and time to value-add activities.Below we will set out how we see potential savings from the use of Atlantic Global solutions can be applied to certain activities.
Atlantic Global has spent time talking to its customers to gain a better understanding of the benefits gained from the implementation of its solutions.
Typically there are efficiency gains to be made in such areas as:
- Project status reporting
- Project planning, staffing, resourcing & control
- Milestone reporting
- Scenario modelling & planning
- Programme & project management - change & cost management, contractor management, project plan analysis
We found that such processes can be improved by factors of up to 70%. Our analysis has led us to the conclusion that for an individual project or programme manager we can save up to 161 man-days worth of effort on the above tasks, per annum.
As above for delivery staff working on the projects we have found that tasks such as:
- Time recording
- Expense management
- Work scheduling & prioritisation
- Progress & assignment meetings
The Atlantic Global solution set has proved that once successfully implemented, organisations can save time and money on tasks required to manage and monitor portfolios of projects, measure actuals against plan, milestone management and the implementation of key strategic objectives. If you are a central services department or an internal IT department, maximising on efficiency gains helps the organisation save money or embark on more projects. If you are a professional services organisation, the time saved could be used to deliver more projects to more clients, thereby increasing revenues and profit and customer satisfaction. With these potential savings just consider the areas where value-added activities could take place:
- People - improve team performance, more training, more mentoring
- Process - consistent approach with more attention to detail
- Productivity - more delivery of projects on time and within budget
- Profitability - no budget overruns, increased customer facing resource
- Performance - more streamlined processes, less time spent on time & expense capture and reporting, more time on project tasks
- Partner satisfaction - more customer satisfaction
- Power of information - real-time visibility, accountability and dashboard reporting