Calculating Return on Inversion
See how docQ Documental Suite can help your organization to save costs and efforts in managing documents.
Assessing the Return on Inversion is one of the most common practices, to have a pretty good idea of the payback of the project, that is, when I get to save money and how much can I save in the next five years.
The process described below, clearly shows savings amount, when optimizing: storage, management, searches and other related elements.
- We are going to do a very simple exercise on the casuistry of most businesses, regardless of sector, as far as document management is concerned. Thus, we will turn into something tangible, what seems to be an abstract and imprecise.
- Focusing our calculations in a company of 50 employees, in which a very reasonable amount of 100 documents is managed with an administrative role, gaining the interprofessional minimum wage (645.30 €) we want to know our investment on document management.
- Basing on an average of 2 hours and a half per day managing documents, the daily cost of this task is around 15.53 €. In order to provide global figures, we will turn our calculations annual, so our annual cost on these type of tasks, per one resource is of: 3,416.15 €
We must also take into account the time invested on looking for those "lost" documents or misplaced and storage space, so a good summary for a scenario in which the paper is the main character would be the following: annual cost on document management including lost documents and storage, of 5,757 €. This far from negligible figure, must be supported by most companies year by year, without being referred to any business plan or budget or to any specific role.
On the contrary, if our organization is aware of this expediture and considers optimizing their resources to the maximum to be able to focus on their core business, we will raise the second scenario that includes using a tool like docQ.
- On this second scenario we have taken for granted 2 elements: docQ application for capturing and storing all documentation of your organization and a scanner with a reasonable scanning capability (40-80 pages per minute).
- In this new context, human intervention is limited to the placement of documents in the scanner, except the case of unusual circumstances. This is one of the crucial benefits we must quantify. Then, let's calculate costs derived from records management in the same work environment detailed above.
- Having added to the amount of documents managed (100) and to the processing time (1.5 seconds to place documents in the scanner), the time spent everyday on classification and data extraction manually by our staff, the annual cost derived from these tasks, with the new system is of: 178.40 €.
Thanks to the application, we can also quantify the savings from searching documents, again using the figures above:
- Number of people who have to search for documents a day: 5
- Average documents a day: 10
- Time it takes to find a document: 10 sseconds, thanks to the different options implemented for automatically search
While in the 1st scenario, we had to add an average amount of lost documents to our calculation, thanks to this system, that figure is zero, resulting an overall cost derived from searching documents, of: 189.79 €
Thus, with the new system the sample company exposed would spend: 3,641.81 € less than with the paper-based scenario.
Once we have seen the 2 scenarios, it is time to determine the investment needed for the launch of the solution shown in the 2nd scenario. We have calculated that the investment for the 1st year is of: 4,850 €, thus, ROI calculations will be as follows:
(figures shown are based on a calculation with a 5 year limit)
- Total savings generated by the project within over 5 years: 17,753.81 €
- Total costs generated by the project: 7,850.00 €
- % ROI (Return on Investment to 5 years): 226.16
- ROI: 9,903.81 €
- Payback: Year 2
A ROI of 226.16 means we have done a great investment, not only recovering the money invested, but also occurring benefits.