It’s Technology Acquisition Time: Do You Know Where Your ROI Is?

While our continuing efforts to find and deploy the “next best technology” to improve our work processes is deeply embedded in our managerial “DNA,” what appears to be the “best” can come at a steep cost, which may not be fully recoverable or meet expectations about its value for productivity gains.

There’s been a “tool” that financial managers have used for years to define the potential value of an acquisition of capital equipment, real estate, and other tangible operational benefits. It is the ROI (return on investment) assessment.

I have adapted the tool for use with technology acquisition assessments for warehouse and distribution center productivity improvements. This adaptation includes the areas of performance and costs that are unique to this environment.

Beginning with this article, I will discuss the elements of this ROI, with particular attention to the human worker cost “tradeoffs” with automation replacements.

But first, a question ...