Three steps to calculating management system ‘return on investment’

TechMan shares the benefits of implementing a database to improve efficiency and profits

Three steps to calculating management system ‘return on investment’
A garage management system database can be used both to make working with customers more efficient and to maximise the opportunities with prospects, say TechMan. Image: Bigstock.

Garage management system developer TechMan has shared a typical investment dilemma.

“David owns a successful garage with six ramps and five technicians,” said Leo Freebairn, TechMan’s national sales manager.

“Last week he spent £18,000 on the latest diagnostic kit for his garage.

“He made that decision in one day but he’s been considering implementing a new garage management system for over two years.

“He told me ‘I can’t figure out if I’m wasting my money’.”

David knows he can put the new diagnostic machine in the garage and earn money right away but doesn’t see the case for the management system as clearly, Techman say.

“For any business-focused garage owner willing to invest, juggling competing priorities usually boils down to one simple thing – ‘return on investment’.”

It can make searching customer histories or sending reminders simple, while linking to an accounting system and all customer contact history.

To calculate the financial benefit, TechMan suggest garages looks at three basic areas over the last one or two years:

  1. Consider approximately how many winnable jobs were lost because quotations weren’t sent, tracked or followed up properly; multiply that number by average job invoice value and then by percentage profit margin to see ‘lost profit from quotations’.
  2. Look at time that gets wasted performing manual tasks such as sorting spreadsheets, sifting data, looking through job histories, sending reminders or rekeying paper notes into the computer; approximate the number of hours and then multiply that by an average hourly staff wage to find the cost of unproductive time – a management system could cut this by 50 per cent.
  3. Look at work retention for existing customers and establish how many customers miss appointments and don’t rebook, or don’t return for the next MOT or service; multiply that number by invoice value then profit margin in the same way to define ‘lost profit from customers’

Add up the three figures and compare them to the monthly cost of the management system.

“It takes a bit of time to paint this picture,” said Leo.

“But we’ve never yet quoted a prospect where there isn’t a return on investment and we’ve never had a customer that didn’t find the real return exceeded this budget figure.”

To help quantify the return on investment more closely, contact TechMan by telephoning 01604 666720 or find out more by clicking ‘more details’ below.

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