Pitching ROI – Step 2: The windup … and the pitch!
By on July 29, 2019
Welcome back for week two of our three-part series on using ROI to make the case for your QMS purchase. If you missed Step 1, where we talked about changing your workplace image from compliance boogeyman to compliance champion, you can check it out here. This week we’re looking at pitch selection, that is, how to decide which information is most likely to tilt the odds in your favor when presenting to the decision makers.
Step 2: The windup … and the pitch!
Now that you have a more receptive ear in leadership, you must make the most convincing pitch possible because you may only get one shot at it.
“Compliance ‘investment’ comprises quantitative and qualitative elements,” says Jonny Frank, a partner at StoneTurn, which is a global advisory firm focusing on regulatory, risk and compliance issues. “Quantitative investments include the salary of compliance officers, additional resources to perform controls and investments in technology. Qualitative costs or investments include, for example, business opportunities lost due to significant perceived risk.” (source)
With such a wide range of possible subjects to consider for your pitch, Mr. Frank recommends starting with the most pressing and significant risks rather than trying to develop a single, comprehensive ROI metric for an entire compliance function. In being selective, you will be able to work with other managers and leadership to help identify and quantify potential returns on investment for them.
Think about where you see the greatest potential for Qualtrax to generate meaningful, demonstrable ROI for your organization. Do your best to make it resonate by eliminating acronyms and jargon that are specific to compliance that leadership may not immediately understand. Go into the meeting armed with some real numbers to show that you’ve done the legwork and already thought through how the Qualtrax system will benefit your organization in your particular area, as well as across departments.
It can be very helpful to have some real-world examples and some data-based estimates for cost savings in your back pocket for when leadership asks you for some hard numbers.
Here are a few examples of how existing Qualtrax users have quantified ROI, along with a method to estimate how much your organization could realistically expect to save. Keep in mind that when you’re doing these calculations, you should keep your estimates as accurate as possible. In other words, don’t pad your stats by saying you spend more time in audit prep than you really do to make the savings look better on the front end. You may be asked to prove your math when you get the system up and running!
Calculate savings based on hours saved in audit prep
Almost all of our customers experience a significant reduction in the time it takes them to prepare for and undergo an audit. We have reports ranging from 50-80 percent reduction in audit prep time! Whether your organization has only one major audit a year from your accrediting body or monthly audits when you factor in customer and internal audits, that time savings can be converted into dollars.
Brenda Jackson with the North Carolina Department of Agriculture and Consumer Services talks about reducing audit prep time by 50 percent, saving an entire head count (new hire) and other benefits of process automation.
“A surprising improvement that we found was our internal audit time was greatly reduced,” Brenda Jackson, Quality Systems Manager for the North Carolina Department of Agriculture and Consumer Services says. “I recorded about a 50 percent reduction in internal audit time. We were able to look at most equipment records, find training records, find method verification or validation, all with just a few clicks at our desktops and audits started going really fast. We also found that they were more thorough, simply because we could find the information. We found a great deal of improvement simply by managing ourselves with a good process.”
To calculate a ballpark figure for how much this reduction in prep will save your organization, estimate how many hours each member of your team spends in audit prep every year. Next, calculate the average cost of an hour of audit prep by adding the hourly rate for each employee (a bit of extra math is required if you’re a salaried employee) and dividing by the total number of team members.
When you multiply the average number of hours by the average cost per hour, you come up with a figure that represents an approximation of how much your organization spends on audit prep each year. When you cut that figure in half, estimating a rough 50 percent reduction in prep time, you arrive at the approximate ROI in savings coming back to the company by allowing yourself and your team to spend that time and those dollars focusing on other mission-critical tasks, which can also be presented as an increase in team productivity.
Use this template to help calculate your potential cost savings from reduced audit prep.
Calculate savings based on reduced need for additional personnel
In some cases, growing organizations or those with growing workloads, are considering adding another full-time employee to help keep up with the growing need for testing and training, as well as oversight and management of the audit process.
The hiring process alone takes up a lot of resources as employees are pulled away from their regular tasks to sort through resumes and conduct interviews. Add to that the cost of an annual salary and benefits and you’re looking at a significant recurring investment. Furthermore, leadership is counting on that new hire to deliver the anticipated results or they’ll find themselves in the expensive hiring process again.
Qualtrax has a built-in testing and training application, as well as an intuitive document management system that can significantly reduce, if not nearly eliminate the need for extra expense. Both Brenda Jackson, referenced above, and Bryan Szpunar at DCL Pathology, were able to eliminate the need for an additional employee by using the system to automate testing and training, while simplifying the audit process, thereby allowing those resources to be allocated elsewhere in the organization, which can be an incredibly powerful argument for bringing in a QMS.
“I would estimate that we’re mitigating needing an extra [full-time employee] of personnel,” Bryan Szpunar, Operations Manager at DCL Pathology says. “And that’s not a low-level FTE either, it’s more of a leadership level. [Using Qualtrax], we’re able to utilize several of us who oversee quality rather than having an entirely different department dedicated to that.”
Bryan Szpunar, Operations Manager at DCL Pathology talks ROI with Qualtrax
Calculate savings based on increased process efficiency with customizable workflows
Another valuable strategy could be to think through processes that are currently done manually that could ultimately be streamlined for efficiency and time/cost savings through Qualtrax’s fully customizable workflow function. These opportunities may not immediately be obvious to you, but if you take some time to think about this and prepare your recommendations prior to your meeting with leadership, you can come up with some very creative ideas that not only provide ROI, but also highlight your value to the organization as a problem solver.
Qualtrax is unique in that our software gives you flexibility to get creative and design workflows that will fit your existing processes. You are able to create as many as you want at no additional cost to you. Many of our customers have taken advantage of this powerful tool to realize some impressive results.
Michael May, of Cornet Technology Inc., designed a workflow to streamline the process of accepting returned products back to his organization. He has calculated that this workflow saves his organization more than $65,000 a year.
Michael May talks about the value of custom workflows in the Qualtrax system
Other customers have built workflows to manage paid time off, ensure timely delivery of critical documents to the parties that need them only when they need them, and remove barriers to multi-departmental processes by allowing documents to travel seamlessly between interested parties while providing visibility to exactly where a process is in the pipeline. The possibilities are literally endless.
As you think through your existing manual processes, consider asking other members of your organization about processes that they would like to automate. That paid-time-off request workflow would certainly put a smile on your HR Manager’s face! The more people and departments that you can tie into the value proposition, showing that Qualtrax will be an asset beyond the compliance team, the more likely you will be successful in securing the backing of leadership to bring a QMS on board.
Good luck honing your pitch! We’ll conclude this series next week when we look at how to secure buy-in from your leadership team and address some of the most common objections to funding a QMS purchase.
Read part 3 of our Pitching ROI Series: Step 3: Getting Buy-In
Category: ROI
