- Does this purchase solve a problem or make my existing situation better?
- Will I realize additional value from the purchase?
- Am I keeping with the times and leveraging the latest technology?
Here in the Cleveland area, the weather is turning chilly and golf season is for the most part over. It is a time when players assess the past season’s performance and potentially think about being fitted and buying new equipment.
It is not a small consideration, as a full set can cost in the thousands.
Better players are going to evaluate their entire game - off the tee, from the fairway, in the rough and bunkers, and on the greens - to see where an equipment change could benefit them most.
Personally, I am evaluating my short game and examining if new wedges with fresh grooves and different lofts may take a couple strokes per round off my card.
One constant in my mind will be “Will I realize a return on any investment I make?”. That is, will I benefit from new technology?
Is that the Holy Grail, or are there things in my swing that need tuned as well?
Will I end up going back to the old wedges and regret the financial outlay?
For answers, check back with me at the end of next season!
70% Not Satisfied
The main takeaway was that nearly 70% of respondents that have a TMS were not satisfied.
In the follow up article, we offered some words of advice to those 7 out of 10 respondents.
A logical subsequent poll, drilling into some reasons for dissatisfaction, was conducted a few weeks later. We asked “How much ROI did you realize from your TMS implementation?”
Return on Investment
ROI is a key element of the business case for TMS, or any technology, projects. And admittedly ROI can be measured in many ways, objective and subjective, but generally does the dollar investment payback within a defined timeframe?
Main takeaways:
- We are not surprised that nearly 60% of respondents said they fell FAR SHORT of ROI projections. Potential reasons:
>>> The shipper bought in to the sales pitch of the vendor and took their ‘expected benefits’ as gospel;
>>> In order to get the budget for the project, savings potential was inflated to justify the expense;
>>> A poor implementation led to underutilized functionality and therefore poor solutions;
>>> Poor training and change management led to users employing workarounds or reverting to ‘the way we always did it”.
- Nearly a third of respondents were able to EXCEED ROI projections.
>>> Very encouraging, and indicates that the shipper, and likely a competent implementation partner, fully vetted the solution, did the analysis to determine the payback, how it would be achieved, and demanded excellence in implementation and ongoing usage of the technology.
- 14% of respondents did NOT figure out ROI before implementation.
>>> This one is difficult to interpret, but apparently some shippers simply see TMS as a cost of doing business. Or it is seen as cost avoidance in transportation. That is, they know there is benefit but have difficulty in quantifying the numbers because current processes and tools do not accurately reflect reality.
- 0% MET ROI projections.
>>> Along with two largest populations in our poll, this is not surprising as more often than not in spite of the work put in (or not), hitting a number in the future is difficult. Our guess is that most fell short of projections.
Exceeding Expectations
So how does one at least meet (and hopefully exceed) ROI projections?
- Don’t rely on what someone else says you should expect. Do the analyses, be honest with expectations, know how your business can and will change over time, make sure the organization understands expectations, and commit to continuous improvement.
- Be vigilant about the implementation. Engage key stakeholder support. Beware scope creep or functionality givebacks. Understand any and all implications of design and build changes.
- Don’t get handcuffed by a deadline. An estimated Go-live is estimated. The reality is that you may be able pull the schedule forward or you may have to delay. Either way, it better be justified and fully vetted.
- Communicate expectations to the entire team including your integrator and vendors. And constantly refer to the project charter and ROI, so that every decision is made with your objectives in mind.
- Design your solution to drive ROI versus simply automating current state.
- ROI should be viewed from multiple lenses, not just financial. If customer service is improved by X% does that drive additional sales? Is visibility of product in transit considered a key metric? If so, include those in your definition of success.
