Should cost be One of your key purchasing decisions for Digital Solutions?
Over the past several weeks I have been asked repeatedly if cost was a key decision point to digital applications we purchased and implemented in our manufacturing and distribution sites.
My answer has always been the same. Cost was NOT part of the decision. ROI (Return on investment) was a key decision point once proof of value was completed. Why would we not invest in something that pays for itself plus some? If could invest $1000 today and achieve a $7000 dollar return 12 months, would you make the investment?
Proof of value was always completed with an actual pilot process of 90 days at an actual site. This allowed us fail fast and minimize investment risk. We expected a 30% failure rate. It also allowed us and the vendor to better understand one another's capabilities. We began testing many technologies that were operable and could deliver the stated technical objective, but the vendor capabilities were not for ready for prime time.
The next criteria was speed to value (Think Big, start small, Scale Quickly). How fast could we and the vendor implement the solution across multiple sites? Part of the ROI is the cost you will incur to implement. If every operator requires 40 hours of training, and you do all the physical installation work and testing; cost go up and ROI goes down. Vendors that could support and even do these activities at speed reduce the cost and up the ROI.
Highly intuitive UX design was the next criteria. Meaning we could provide a mobile device and application to an operator with little to no training and they would begin to drive value and productivity improvements.
There were many other criteria such as systems security, interoperability, etc. But anything that did not pass the first three of ROI, Speed to Value and intuitive UX design died in the innovation funnel.
So if you are struggling in the justification space because of cost of the solution, go back to your ROI. Its the best way to bring on stakeholders. Proof of value and running a 90 test will create a lot confidence when you have data to back up the ROI. Stakeholder move past cost and focus on ROI with you.
Looking for anyone struggling in the justification space to provide comments of questions to above.