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Investing in Palm handhelds: a return on investment analysis (continued)

The company has provided its mobile employees with Internet-enabled Palm VII computers and software from GearWorks (at http://www.gearworks.com). Cell phone costs were getting to be "astronomical," according to Kurt Anderson, the company's director of operations. Instead, the company turned to Palm handhelds to track their trucks and truckers.

According to Anderson, "Estimating conservatively, we expect to eliminate 75% of annual cell phone charges on top of a 40% annual reduction in overall administrative costs, specifically from handling exceptions when pickups or deliveries run late."

Now, that's a meaty set of numbers!

How to think about your own ROI
As you've seen in this article, companies are deriving benefit from Palm handhelds in many different ways. In the case of McGinnis Lockridge & Kilgoe, a Palm solution actually replaced laptops. In many cases, a Palm solution isn't replacing another technology, rather, as with data collection, it's replacing a task previously done laboriously by hand. You know your own business best. Before I started writing this article, I never would have listed "cutting down on cell phone charges" as a benefit of a Palm enterprise solution, but for J&B Wholesale, it was a huge win.

So, when you're thinking about your own ROI or trying to figure out what your ROI might be before you invest in Palm handhelds, keep these guidelines in mind:

  • Ask yourself if you're replacing a previous process or if you're enabling something entirely new.

  • If you're replacing a previous process, figure out what that process costs and then figure out what it might cost with the Palm solution.

  • If your previous process was done by hand, there are bound to be mistakes or incomplete data. Factor in what mistakes cost and what opportunities will open up if you have complete data.

  • If you're enabling something entirely new, get a handle on what benefits come from being able to accomplish that new activity.

  • Here's where it telescopes. Now that you've derived the benefits from being able to accomplish that new activity, determine what new opportunities will open up from that. For example, if you're now able to check your email on the road, what are the other things you can do remotely? Cycle this over and over until you see the entire chain: possibility leads to capability leads to possibility. And then, for fun, attempt to quantify.

  • Don't forget to factor in the dollar value of time saved. Even if you save just a few minutes a day, multiplied across a year, across all employees, it's still a big number.

  • Now that you've figured out the dollar value of time saved, figure out the opportunity value of time saved. Either you'll be able to do more of the same task, so add that to your model, or you'll do other tasks or be more responsive to customers and constituents. What's the actual dollar benefit of that?


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