Sometimes it is difficult to decide whether to update to a new version of CAD software. Relying on your gut-instinct is usually not the best way.
To make it easier for administrators to make an update decision, the following process can be used to perform an objective assessment and make an informed decision.
Integration with the existing infrastructure
The systems infrastructure in a company often consists of numerous integrated solutions, such as ERP, PLM, backup systems or the intranet. Almost every company has a mature software environment into which any new software must fit. So if you want to work effectively with a new update, it is important to check how well the new version fits with your infrastructure.
The test phase
First of all, administrators should put the software update through a series of basic tests. If the company has a software maintenance contract, it will of course receive the update automatically. If not, the following alternative ways to cost-effectively test the new version can be considered:
- Using a trial version
- Participating in beta test programs
- Purchasing a short-term rental license
The evaluation process
In order to correctly evaluate the results of test phase, the following points should be included in the testing process:
- Use your own test data
This is because using real-world data is essential to correctly judge the new version.
- Note any changes in the new version
Items such as the menu bar or toolbars can change between versions, and can bring enormous productivity gains in the long-run.
- Identify and evaluate new functionality
Take a close look at any new functionality. Sometimes you will find new tools that offer considerable benefits.
- Obtain a second and third opinion
It makes sense for several users to independently evaluate the software, and then collate the results to get a balanced view from a wider perspective.
- Documenting the results
Create a report of the evaluation results to support the subsequent update decision process.
Advantages on request
The administrator can expect some advantages from a new update, starting with higher productivity through optimized design processes. This enables employees to achieve more in less time. In addition, automated applications reduce personnel costs and increase capacity. More precise designs lead to improved financial performance by reducing production errors. Maintenance costs can be reduced by retiring outdated programs. Other costs can be completely eliminated by creating consistent processes through automation.
Let the numbers speak for themselves
The expected financial gains and benefits achieved from a software investment drive the decision making process of company management, who ultimately want their money invested profitably. Increasingly, decisions are being based on a well-known measure called: Return on Investment (ROI). In other words, the ratio of capital employed to profit earned for the company. A wide variety of factors relating to content, technology and logistics play a role here.
Simple steps to calculate ROI
Assuming that your test results are positive, management must then be convinced to proceed. This is easiest when the numbers speak for themselves. The financial aspects of a software implementation can be calculated:
If you receive your software updates through a maintenance contract then this cost is zero. Otherwise, it is the cost of purchasing the software update.
The cost of the time required by your CAD management and IT to install the software update.
Costs of training organisation
The cost of the time you need to organise a software training course, including tasks such as preparing documents and reserving training rooms, plus the cost of hiring external trainers.
The cost of the time your employees spend attending the training course.
An estimate of the overall efficiency gains achieved after the users have been trained. The savings calculation is important because this figure offsets the software, installation and training costs incurred during implementation.
Where is the return on investment?
To determine the profitability of a software update, a Return on Investment (ROI) analysis is recommended. The figures obtained enable management to make an informed decision to go ahead – including the company’s finance department. You determine the return on investment (ROI) from the data collected above.
A brief look at the above factors indicates that the most important factor is savings! If the savings achieved in the first year are actually greater than the combined costs, the return will be higher than 100%. Therefore, you will recoup your investment on the software update in less than a year. Since most updates are typically in use between one and two years, you need to achieve a ROI of at least 50% to be able to perform an update with confidence.
The decision: Go or No Go
Equipped with firm facts and a calculated ROI, it is now time to convince management and the finance department to go ahead. Experience has shown that this is the only effective way to gain approval to finance software updates. Administrators can significantly increase their chances of a Go decision by making their case based on detailed analysis, anticipated benefits and ROI, rather than emotions or gut-feel.
Making intelligent update decisions requires, in equal measure, user testing, software analysis, and cost calculation. With these items in the bag, an administrator can make sound decisions with confidence.