How Much ROI Does Enterprise Shipping Need?
Posted by Rachel Rodenborg on Wed, Sep 28, 2011 @ 12:39 PM
I recently got an email from one of my dedicated readers with an enterprise shipping question that I didn't immediately have a good answer for, so I thought I would offer you the question and see if you can help me come up with a reasonable answer.
The reader (who shall remain anonymous to protect his identity) writes,
Three months ago, I was tasked with finding a new shipping system that would make my shipping department more productive and would eliminate the need for shipping staff to move from platform to platform as they processed shipments. I was instructed that any solution I presented would have to demonstrate clear return on our investment.
I looked at all the options and found the one that would work with our internal systems. It was cetralized and allowed us to ship with any carrier from one terminal. The price tag for the system was $50,000.
I estimate that the system will improve our throughput by at least 50%. It's likely that we will be able to reallocate some of our shipping staff to other areas of the company if we implement it. What's more, by my calculations, we would recover our initial investment in six months or less.
I presented the system to managment and while they like the idea, they're dragging their feet. While they agree that my calculations look right, they are still concerned about ROI. What can I do to convince them?
My immediate thought was that the company was concerned with the cash outlay on the front end, even though they will recover those costs within 6 months.
Okay, readers--what do you think our friend could do to help move things along and improve capacity in his shipping department? I look forward to your input--feel free to leave comments below.