TCO and ROI for PpcSoft iKnow
"The successful producer of an article sells it for more than it cost him to make, and that's his profit.
But the customer buys it only because it is worth more to him than he pays for it, and that's his profit.
No one can long make a profit producing anything unless the customer makes a profit using it."
- Samuel Pettengill, U.S.Congressman 1930's
Total cost of ownership (TCO) is a financial estimate to assess direct and indirect costs, in this case related to software. The price of the software is only a small part of the total costs of ownership during its whole life-cycle.
The return on investment (ROI) is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested.
TCO Considerations
When purchasing software, it is important to consider
| - Direct cost | The price you pay when purchasing the product |
| - Hardware | Do you need to upgrade your hardware to use the software ? |
| - Installation | Time wasted on difficult installations (especially for many users) |
| - Configuration | Do you need to configure it ? Can you do it yourself, or do you need external help ? |
| - Customization | Do you need to customize it to use it ? How much ? |
| - Training | How much time does it take to learn the software ? |
| - Usability | How easy is it to use once you've learned it ? |
| - Stability | Does the software fail ? Does it lose data ? Does it crash Windows ? |
| - Maintainability | Does bugs get fixed ? Does it improve in time ? Does it radically change ? |
| - Support | If it fails, if you have problems, if you need help - can you get help ? |
| - Future | Will the vendor and the product be around for the next 10 years ? |
| - Culture | Does the software work the way your people work ? Do you have to change your company to fit the software ? |
| - Lock-in | If you choose a certain software, what is the cost of switching later ? |
| - Productivity | Does the software give you improved productivity, or was it higher without the software ? |
- Value |
Considering all of the above, does the software give you enough value to justify the costs? |
PpcSoft iKnow
| - Direct cost | $249 per user, including support & maintenance the first year |
| - Hardware | PpcSoft iKnow is designed to be efficient on older hardware (but Pentium 4 or better recommended) |
| - Installation | Simple installation / no installation / enterprise MSI installation are all supported |
| - Configuration | No configuration needed; works out-of-the-box |
| - Customization | No customization needed or allowed; works out-of-the-box |
| - Training |
Built-in tutorial to get started in 10 minutes (and built-in examples)
Designed to be as intuitive and simple as possible to use (less training needed) License allows people to use PpcSoft iKnow on their personal computers also for training at home |
| - Usability | Ground-breaking usability for beginners, intermediaries and experts |
| - Stability | Very strong focus on stability - especially avoiding losing your data (automatic backup to temp directory) |
| - Maintainability |
Bug-fixes and minor updates are included
Major updates approx. once a year (for better scheduling). Focus on minor interface changes to avoid the need for re-training. |
| - Support |
E-mail support directly from the application.
Great built-in help. Designed to eliminate need for help ! World-class support (very important to us) - fast and accurate world-class e-mail - human experts will be assigned the issue - no need to go through several levels of support |
| - Future | PpcSoft is a small company, but it has been in business for more than 6 years, and PpcSoft iKnow is our flagship product ! |
| - Culture |
PpcSoft iKnow is optimized for knowledge workers who spend a lot of time in front of a computer.
PpcSoft iKnow is optimized for knowledge - that means text, not pictures. PpcSoft iKnow is not for everyone - let some of your people try it out to see if it fits your culture and way of working We don't want you to buy it if you won't use it - we want happy and satisfied customers for the long run ! |
| - Lock-in | PpcSoft iKnow uses a simple text-based format which can be converted relatively easy, minimizing switching costs
In fact, you can open your data anytime in a text editor like MS Notepad, and directly read and edit your knowledge. |
| - Productivity |
This is the main purpose of PpcSoft iKnow - to increase your productivity
PpcSoft iKnow has been designed to be extremely easy to use and very effective |
- Value |
Ease of use * Powerful functionality * Strong stability = high productivity ! Example (simplified): - Price/Cost: $250 / 250 work days (50 weeks x 5 days) = $1 a day - Salary/Cost: $25 per hour = $0.40 per minute - less than 3 minutes a day If you save 3 minutes a day using PpcSoft iKnow, it is worth the price ! |
ROI
Using the simplified example above;
- if you save 2 hours a year at $25 an hour, your ROI will be 20%.
- if you save 10 hours a year at $25 an hour, your ROI will be 100%.
- if you save 20 hours a year at $50 an hour, your ROI will be 400%
The smartest investment you can make is in your employees.
- they create your products
- they help your customers with problems
- they keep your company running
- they spend their most valuable asset - their time - on your company
- they are the only thing that your competitors can't duplicate
Help your employees help you - give them the best working conditions and best tools available !
PpcSoft iKnow is a small, but potentially very important part of this....
The greatest cost when investing in new software for knowledge workers is usually their time, often many times the software cost.
How long does it take to learn the software, how much time is lost due to errors and crashes, how much time is lost or saved due to the user interface etc ?
How much time is saved by using the software ?
How much is your time worth ?
