Want to write a compelling business case for asset tracking and management?
Simply follow these six easy steps.
In this article...
Step 1: Name the Problem
A business case is a document that communicates the reasons why your organization should invest in solving a specific problem.
Start simple and describe your organization’s ‘pain point’.
For example, “We lose $100,000 worth of tools and equipment every year and it’s severely impacting our company’s profitability.”
The problem statement is central to the business case.
If decision-makers don’t see a significant problem, they won’t want to take the time or spend the money needed to implement a new asset tracking system.
Step 2: Identify the Solution
Ensure you have a strong solution lined up that you have thoroughly investigated.
Provide your decision-makers with key information that will demonstrate how the solution you offer will help eliminate the problem.
In this example, you might start by saying that “Asset tracking with a solution like GoCodes has been proven to reduce lost and stolen tools and equipment by up to 90%.”
Step 3: Show the Costs
In many organizations, there are defined goals that stipulate how long a project can run before the initial investment amount is paid back.
This metric is typically one year or less for smaller projects.
Your business case should clarify the total costs of solving the problem, as well as the length of time you would need to refund that initial investment.
Your financials should include the purchase of asset tracking software, as well as any needed hardware, and training and implementation costs.
If the total costs for the project come in well under $100,000, then your project will generate a significant net gain and become a worthwhile investment for your management team.
Your Project Investment Costs may look something like this:
Hardware $10,000
Software $15,000
Training $5,000
Implementation $5,000
Total Investment $35,000
Annual Saving $100,000 (reduction in lost tools)
Annual Benefit (Saving-Costs) $65,000
Step 4: Highlight Secondary Benefits
There is usually a range of benefits to be derived from implementing an asset tracking and management solution. Use them to bolster your business case, too.
Some common examples of secondary benefits that you can include in your business case (and which we explain for you here) are:
1. Improves operational efficiency – Asset tracking allows for the instant update of tool information and immediate sharing, enhancing project efficiency as tools get to the right project sites at the right time. It also eliminates unnecessary tool purchases that can result from insufficient & out of date spreadsheet information.
2. Business process automation – Asset tracking automates processes like equipment inspections, calibrations, and maintenance checks for improved safety and compliance.
3. Automates the asset register for accurate accounting – Asset tracking software allows for easy accounting and reporting on all equipment, for accurate, accessible information.
4. Equipment lifecycle planning and management – It becomes easier with asset tracking software. Decision-makers can easily see what the business owns and what will be needed in the coming year.
Step 5: Provide a Case Study Example
Invite the asset tracking company that you’ve recommended to provide a case study from a business similar to yours.
The case study should illustrate the turnaround that was achieved when the comparable business implemented asset tracking.
Learning how asset tracking helped the comparable business to reduce loss and increase profitability will educate stakeholders and help you achieve their support for your business case.
Step 6: Offer Other Alternatives
Businesses sometimes hit fallow years.
During these times, even investing in a sound solution like GoCodes can be met with resistance by decision-makers.
That’s why it’s important to offer your management team options.
These could include:
- trialing the software for one year,
- tabling the solution for one year and continuing on with lists and spreadsheets,
- using poly labels versus metal labels on tools and reducing label costs, or
- asking the asset software provider for a better deal on a three-year contract.
Providing options helps drive flexible thinking and ensures that the best decision for the business is made.
