Return on Investment

Abstract

Builders face constant pressure to do things faster, better, and cheaper. Technology investments allow little margin for error. New software solutions not only have to be simple to install, operate, and maintain but they must start paying for themselves straight out of the box. Return on investment (ROI) is not a mathematical abstraction; it is an essential matter.

Overview and Summary

Adoption of productivity-enhancing scheduling software by builders is often hampered by concerns about costs, security, and complexity. TracTime was designed to address these issues head-on. The result is a full-featured, multipurpose scheduling system that provides builders with great features: scheduling by lot or communities, prepared and customizable reporting, remote connectivity, email, secure Internet connectivity, business intranets and support for mobile devices ï¿½at an affordable cost with none of the hassle.

Finding the Value

Through our sales effort we have found that most potential customers we contact are excited about our product. But the truth is that in many organizations there are really two buyers: the department manager, who focuses on the product; and a second, hidden group of corporate officers and managers, often called the capital-budgeting committee, who focuses on the economics of the product.

Some companies like to distill into dollars and cents the reasons they want to purchase our product. Often we can get good historical data from current customers to help with these calculations. Other times the customer, working with us, can reduce our descriptions of the product to such economic terms as productivity gains, reduced operating expenses, and overtime savings.

Virtually all the companies surveyed reported that deploying TracTime had already led to dramatic gains in business value, as reflected by:

Increased response time to problems in the field
Increased communications with trades and scheduling responsiveness
Increased responsiveness to homebuyers needs and requirements
Improved productivity through reduction in task work and increased output
Additional time to focus on core business issues, and not on disruptions caused manually shuffling paperwork

Return on Investment Calculator

Average time savings per week:

hours

Average hourly wage:

per hour

Average monthly wages recaptured:

$1,290.00

Average yearly wages recaptured:

$15,480.00

Average wages recaptured for two years:

$30,960.00

Cost Benefit Analysis

A Construction Scheduling system, if used effectively, could conservatively reduce the construction cycle time per house by 12.5 days. Carry-per-day is estimated to cost at least $100.00 per day, per house, based on current interest rates and other factors as supplied by various management personnel within the production building companies. These estimates will fluctuate based on various factors such as interest rate changes, the cost of homes in each Division and how many days, if any, can be reduced from a schedule. Not every Division will realize the same level of benefits of a construction scheduling system. Based on these general estimates, the above tangible cost savings are possible.