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Return on Investment (ROI) is an important
calcuation for any purchase, especially productivity tools for software
development. Many purchases for IT products simply are necessary.
If your customer needs a website then you you need a web development
tool of some kind. Other purchases are not so straight forward.
For example: tools that promise improved productivity, alot of hype,
and very little in the way of metrics to reveal benefits you have
gained. To make matters worse, the non-tangles of higher quality,
better customer trust, and more referrals can be the result of tools
or processes. Finally, many purchase and implement such tools to
find them unwieldy, burdening, and too complex. Eventially, use
is abondoned altogether.
| When evaluating a productivity tool, you should
consider the following costs: |
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1)
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Product |
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Items 1 and 2 are fixed costs. Item 3 is the cost
associated with the time it takes for an individual to become
proficient with the tool. Due to individual aptitude and the
complexity of the tool this value varies greatly. Item 4 involves
the cost of tool use added to each project. Item 5 is costs
you are experiencing now due to weekness that the tool or process
will mitigate or eliminate. |
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2)
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Training |
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3)
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Ramp Time |
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4)
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Use Time |
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5)
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Non-Conformance/Savings |
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| Consider the purchase of the xyz tool with the
following costs: |
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1 |
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$5,000 tool cost |
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Assumptions: Items 1, 2, & 3
are fixed costs per individual. Item 4 & 5 are per project.
Lets arbitrarily say each project is an average of 4 months
long. Proper use of the xyz tool will eliminate non-conformance
costs - item 5.
The difference between item 5 & 4 gives a savings of $3,000
per project. Since the average project takes 4 months, the company
using the xyz tool will break-even after 3 years. |
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2 |
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$2,000 training |
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3 |
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$20,000 ramp time cost |
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4 |
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$2,000 use cost |
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5 |
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$5,000 non-conformance est. |
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| Now consider Practicum |
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1 |
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$1,500 PRACTICUM Cost |
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2 |
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$1,500 PRACTICUM Training |
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Training is thorough and empowering |
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3 |
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$2,000 ramp time cost |
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A person with 2 years of IT development experience can become
proficient in 1 to 2 months. |
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4 |
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$200 use cost |
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5 |
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$5,000 non-conformance est. |
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Practicum pays for itself in the first project. |
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