Are you currently on the hunt for a new technology platform to better engage your field crews, collect data and/or mobilize processes? Take a few minutes to review or learn some best practices for calculating return on investment (or ROI)!
Savvy solar logistics and operations managers know that each initiative they take on requires consideration of upfront and indirect costs, as well as projected savings. However, it is human nature to judge the worth of a solution by its price tag even though it does not always correlate with whether you are getting the most value out of your solar software.
While it does take longer to go “beyond the sticker” and consider other factors (such as the platform’s ROI, pricing model and any associated ongoing costs), it is certain to result in a much more realistic and dependable selection process.
In this article, we will explain the kind of preparation that needs to be done before measuring the ROI of solar field software solutions before diving into some calculation tips to get you started.
Preparing to Measure ROI
When it comes to measuring ROI, you are essentially comparing the size of savings or benefits to the cost of the given solution. Before breaking out the spreadsheet, it is worthwhile to go through some qualitative analysis and gather the base data on both the savings and costs sides of the ROI equation.
Start by identifying and estimating the financial impact of the challenges that you are trying to solve in your particular business. Here are some steps to follow:
Interview key personnel and ask them what their key challenges are, as well as what the biggest time wasters in their area of solar operations happen to be.
Develop a list of key challenges and prioritize them based on the potential impact it would make if that challenge was heavily minimized.
Describe your top 3 challenges in more detail and brainstorm with related teams on how to improve the process, remove unnecessary steps and eliminate bottlenecks. Again, keep in mind that the financial impact of each challenge may come from direct labor, materials wasted, delays or the loss of opportunities downstream.
When you’re trying to estimate the true price-tag of the solution, it’s important to consider the following aspects:
Subscription Cost: Your solution will most likely be a Software as a Service (or SaaS) platform. These platforms’ pricing models vary, but you will usually be able to estimate the cost of the base solution on an annual or monthly basis. Take a look at this article to see which pricing model might be the best for your company.
Cost of Onboarding and Training: These costs are often underestimated and can become quite significant if not well understood. Depending on how user-friendly and streamlined the solution is, the configuration, training and onboarding process can take anywhere from months (for traditional solutions) down to only 1-2 weeks (for modern, cloud-based solutions). If you decide upon a mobile-first solution, these often require even less initial training for the end-user as the user interface and experience is designed similarly to familiar, everyday consumer apps.
Ongoing Configuration and Management: Again, this can vary wildly depending on the quality of the solution. Legacy solutions require highly-trained and costly IT resources to make the smallest of configuration changes, while up-and-coming zero-coding solutions (like Scoop) increasingly enable business managers and team leaders to make their own tweaks.
Once you have done the above brainstorming and fact-finding, you’re ready to dive into the ROI calculations. As a place to start, we’ve provided some categories below in expandable boxes that you you to follow below. Keep in mind that these are just starting points meant to stimulate more discussion and thinking within your team.
As mentioned earlier, ROI is essentially a division of total savings or benefits by the total solution costs. This number is often presented as a multiple.
As a rule of thumb, a solution needs to produce at least 10X ROI (i.e., where savings are 10 times larger than the costs) to be worth the implementation risk. Discuss with your senior management to understand your company’s level of risk tolerance and refine the figure as needed.
Although the calculations can be tedious, performing this due diligence will help you become more confident in the solutions that you vet and ultimately enable you to present the best solution to your executive team. Remember, even if the cost of a solution seems absurd as first, figuring out its true ROI for your solar company could make the greatest difference!
Scoop® Solar is a unique solution that incorporates mobile and cloud technology to create an intuitive field-to-office experience for your increasingly decentralized, liquid workforce. By connecting your data and existing software with easy-to-build, easy-to-use WorkApps™, your team can access, input and sync data from a mobile phone or desktop, wherever they are