iTECH: Scale Technology to Meet Business Demands
By Bruce Lilly, Contributing Writer
This story appears in the December 2014/January 2015 issue of iTECH, published in the Dec. 15 print edition of Transport Topics. Click here to subscribe today.
Even when investment returns are calculated accurately, there are pitfalls that can keep companies from gaining all of the expected paybacks. One danger is creating ROI numbers based on a full-fleet installation and then deploying the technology to only part of the fleet.
“Incremental installations don’t deliver the same returns as full-fleet installations, because in many cases, there’s a synergy to the technology when used across a fleet,” said Dan Murray of the American Transportation Research Institute.
“There can be substantial benefits from installing telematics in order to communicate with your fleet in real time, but if you have a fleet of 100 trucks, you can’t count on getting the same benefit if you install mobile-comm units on just four or five trucks every few months,” he added. “The math doesn’t work that way. In many cases, an investment in new technology won’t bring the expected payback unless it’s implemented with the entire fleet, or at least a signifcant portion of the fleet in a short time period.”
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There also is the issue of ensuring that the new technology is used as planned. “One of the ways that technology can bring a powerful return is by enabling companies to re-engineer business processes in ways that offer substantial efficiency gains,” said Mark Cubine, vice president of marketing at McLeod Software, in Birmingham, Alabama.
“However, there is a potential pitfall here that occurs during implementations,” he said. “Whenever business processes are changed, some people resist those changes, and this resistance can push the project off track. Don’t lose sight of the original improvement goals that are the basis for the anticipated ROI.”
If the ROI for using a new technology is truly there, one of the most powerful ways to support and even boost the anticipated gains is to accelerate the implementation. “You want to make it happen fast,” said Yves Provencher, director at Performance Innovation Transport, a consultant based in Pointe-Claire, Quebec. “If you’re buying something that will bring a return, you want that return as quickly as possible.”
Deryk Powell of Velociti Inc. emphasized the point. “Too often, people don’t examine the impact of deploying new technology quickly,” he said. “The speed with which you deploy a technology can have a huge effect on the ROI.”
Slower implementations may be less expensive at first, yet more costly in the long term. “A rapid implementation of a solution can not only save you a lot more money, it can in reality completely pay for the extra cost of speeding up the implementation and then some. People don’t think about this aspect of implementing technology quickly, because the flashy features of the hardware and the software get all of the attention.”
On the other hand, there are types of technology that include suites of tools which cannot be utilized all at once. In such cases, the strategy for securing the paybacks is the classic advice of learning to crawl first, then walking before trying to run.
“Our ROI sheet has well over a hundred rows of inputs,” said Chris Oliver of Zonar Systems. “The complete report is very thorough and extensive, but after we present the report we say, ‘Don’t even think for a second that you’re going to do all of this immediately. You need to proceed with operational focus and discipline, because you can’t do it all at once. Let’s start here, take these first five things and move through it.’”
Determining when to spend capital on new technology will never be easy, but ultimately it is manageable.
“Calculating the return on investing in technology requires hard work,” Cubine said, “but people who put in the time and approach it thoroughly usually get it right.”
