A prospect recently challenged me to show a return on investment of two to two and a half years. For the majority of my career a 'good' return on investment (ROI) was two years, a great return was one year, and an unbelievable return was six months.  Today with our SaaS offering we're seeing customers regularly returning on their investment in four to five months, so it may be time to revisit how we think about ROI calculations.

We're going to be using our Food Connex systems in this example.  Our Enterprise on-premise application and our Cloud SaaS model.  Typically our first year cost for an Enterprise customer would be $40,000.  This includes the initial software licenses, server and equipment, installation and training.  With our SaaS offering first year costs are typically less than $7,800.  That dramatic drop in the solution cost results in a dramatic improvement in ROI.

We spoke with one of our customers, Jesse from Schaller and Weber, at the Fancy Food Show and asked about the return he sees.  He estimated that he is personally saving five hours a week doing purchasing.  I didn't ask his pay rate, so we'll use the average provided by the Bureau of Labor at $36. 

Before we do the math take a moment to remember that we're only talking about the savings from one person in a company that has automated their Sales and Order Entry Team, Inventory Management and Purchasing, and Picking and Invoicing Teams.

Only considering Jesse's time:
$36 x 5 hours x 52 weeks and Jesse is seeing a $9,360 return on a $7,800 investment.
Which gives us an ROI in less than a year (10 months) for the entire project, based on the time savings of one person.

I know, I know -- it seems like unbelievable hype, but take a moment to let it sink in.  The SaaS model reduced first year cost by 80%, so your wait for ROI can be expected to reduce similarly.

If you still have the 'old' mentality that you'll be waiting two or more years to see a return on food business management software you need to be ready to reset that thinking and take a look at SaaS offerings like Food Connex which can (almost) immediately bring returns.  Click the image below for a quick primer.



 

 

 

 

 

 

 

 

Issue 646 - Checking those Resolutions.

Last year we were early to declare our New Years Resolutions 2018. A lot has changed over in 2018, but I believe it's not quite too late to make sure we have addressed some of those resolutions.

Read more ...