Get Approval to Purchase Enterprise Shipping Software
Posted by Rachel Rodenborg on Wed, Aug 10, 2011 @ 03:10 AM
Consider this scenario:
The shipping department of an enterprise organization brings concerns of operational inefficiencies, errors, and production issues to its management team.
The management team reviews the concerns and agrees that something should be done. The shipping department is charged with finding a solution.
The shipping department identifies a solution to purchase.
The management team sees the price tag associated with the solution and steps on the brakes.
The inefficiencies, errors, and lost productivity continue per the usual without consideration of what these issues cost the organization each year.
Rinse and repeat next year.
Sound familiar? If it does, you’re not alone.
Enterprise shipping departments often know where their processes are inefficient and costly—both in wasted time and in the costs of shipping errors. Most shipping departments recognize that they have an issue and raise a red flag to management. Most shipping departments are willing to do the research to find a workable solution that will reduce or eliminate their problems.
So, what’s the problem?
Getting over the hurdle of the cost associated with the solution.
Most shipping departments aren’t good at communicating the hard costs associated with their errors and inefficiencies as justification for the cost of the software they propose purchasing. Without a clear quantifiable cost associated with the issues a shipping department raises, management is unlikely to approve the purchase of the solution they so desperately need.
The Solution
The key to this issue lies in identifying the issues that are costing you time and money and then assigning a real cost to them. Once you know how much each issue costs your company, you can do the math and find a total cost of those errors over the course of a year.
For example, let’s say you know that you have an average of 46 shipping errors a month and that the average cost of each error is $152. Using these figures, shipping errors are costing the organization $6,992 per month on average. That’s $83,904 per year.
Once they know the total cost of their errors each year, the price tag of the shipping solution—let’s say $30,000—are considerably more palatable. Not only will the example organization recoup their initial investment in just over four months, they will put the additional $53,904 in savings back in their pocket by year end.
Coming to the table with an identified shipping solution, its cost and how that cost compares to the somewhat “invisible” costs of the errors currently experienced by the shipping department will dramatically increase the likelihood that management doesn’t immediately go through sticker shock and say no to your proposed solution.
Want to learn more about how to estimate the affects of your shipping errors on your bottom line? Check out this post.
Learn how your enterprise shipping software can help you eliminate costly shipping errors. Watch the on-demand webinar, Seeing (Shipping) is Believing today.
