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we make it RIA Raffaele Mannella – managing director [email_address]
Measuring the ROI of choosing Flex for Enterprise RIAs How to estimate the benefits and the final Return on Investment of adopting Flex to develop or re-design Rich Internet Applications to be used by the internal staff of a company 360Flex Conference Milan 7- 9 April 2008
-ex post evaluation and forecasts: different purposes
-tangible and intangible benefits: collecting hard and soft data
-be conservative, be credible!
What is the impact of Flex
impacts on the ROI numerator
impacts on the ROI denominator
A worked example
Enterprise Rich Internet Applications In this presentation the term “Enterprise RIAs” refers to RIAs to be used by the internal staff of an organization to perform the operations Possible ent.RIAs are: CRMs, ERPs, salesforce automation platforms, banking operations platforms Definition
The “Walled Garden Syndrome” of enterprise RIAs caused scarce availability of data, examples and case histories However, as the ROI methodology synthesizes in one index only all a series of “sensitive” data, its disclosure is often accepted by companies Data availability
Why should we make the effort? (Ex ante & ex post): deciding feasibility, comparing alternative solutions, reduce uncertainty, lower expenses but most of all: promoting our RIA project in such a way that it results credible and reliable to senior managers! Why evaluate
The ROI as a “final” criterion ROI is a powerful methodology to synthesize in one indicator a structured and complete analysis of benefits and costs. ROI (%)= Net project benefits/Project costs x 100 Benefits Cost Ratio (BCR) = Project benefits / Project costs ROI & BCR
Evaluating the benefits Measuring vs. forecasting Ex post evaluation: based on ROI measurement system which normally requires 3-5% of project budget; input data are collected in terms of surveys, questionnaires, interviews, on-the-job observation, performance monitoring Ex ante evaluation (forecasting): input data come from past experience, similar projects, internal/external experts, standard values, a PILOT PROJECT
If you get positive answers, convert output data to monetary values of:
by using actual and standard values, wages, historical costs, experts’ estimates, related items
Tangible or hard data The traditional measures of performance: Output Units produced, units sold, # visa processed, etc. Time System downtime, time to completion, efficiency etc. Costs Unit costs, sales expenses, variable costs etc. Quality Scrap, rework, rejects etc. Tangible benefits
Intangible benefits The so called “intangible” benefits Some benefits cannot be easily converted in monetary values: +customer service, +collaboration, +organizational committment, +job satisfaction, +customer satisfaction, -complaints, -conflicts
Youthru makes the selection process more effective also for the candidates as it gives them the opportunity to highlight certain aspects of one’s personality and attitudes which cannot be adequately expressed by a textual resume. Calculating the ROI index BCR=1 ROI=0 BEP (BENEFITS=COSTS) In enterprise applications ROIs in the region of 100 to 700% are quite frequent. When a specific need has been identified and a performance gap exists, ROI values can be very high* BEP ROI value *ROI for technology project, Roulstone & Phillips, BH 2008
Real-world Flex case Application: a platform for common banking operations operation executed: depositing a check on a c/a A pilot project revealed these simple data: * Oracle forms (simple html , 1 click=1 page) Previous app.* Flex. app. Measured output: saving # of clicks 17 7 -59% Execution time (sec.s) 25 11 -56%
Alternative choice of hard data should be based on reasonable assumption, in order to avoid benefits overlapping and double counting.
In this case, time saving has been used to quantify the benefit, instead of output data
Real-world Flex case
Data collection * a 2-year useful life was forecasted for the application Real-world Flex case Project cost (full cost) € 6,000,000.00 # dedicated operators 400 Cost per hour (full cost) € 20.00 Cost per year € 14,080,000.00 Annual saving € 7,884,800.00 2-year saving* € 15,769,600.00
Youthru makes the selection process more effective also for the candidates as it gives them the opportunity to highlight certain aspects of one’s personality and attitudes which cannot be adequately expressed by a textual resume.
Benefits of this kind, when hardly measurable, are listed among the intangible benefits. However, before doing that, we can evaluate related items…
Real-world Flex case
Final calculation BCR=benefits/cost=7,884,800.00/3,000,000.00= = 2.63 ROI=net benefits/cost= 163% Real-world Flex case
Youthru makes the selection process more effective also for the candidates as it gives them the opportunity to highlight certain aspects of one’s personality and attitudes which cannot be adequately expressed by a textual resume. Considerations respect an alternative technology Flex probably represents the best choice for interaction and enhanced user experience, which increase the ROI formula numerator And a formidable alternative to decrease development costs (cross browser testing alone, takes 20% of total development time in ordinary IT projects) Flex impact on ROI