Any purchase of business management software – including route optimization software – should include an assessment of how fast you will recoup the cost. That is basic business sense. The difficulty in predicting ROI comes from the fact that there is a widely diverse range of business areas from which the savings that drive ROI will come. And every case is different.
However, it is not unreasonable to ask any potential route planning software vendor for an estimate of how fast the return on investment could be, or where it will come from. So what can you expect?
Every company is starting from a different point of operational efficiency. Those with the most limited route optimization tools – or no tools at all – have the most to gain from route planning and execution software, generally. Size is also a factor. If you have a $10m transport budget, and implementing route planning software saves you 10%, you get a million-dollar saving. But, for many of our clients, a $50,000 saving in the first year is a compelling return on investment, especially when you consider this is a saving that goes on happening every year.
Typically, ROI on a route planning software purchase comes from three main areas that will come as no surprise.
But some areas that generate savings with better route planning and execution are less obvious.
These are just some of the factors that feed into your potential ROI on a route planning and execution software solution. If you are willing to share data on your current operations, we can run scenarios that will model the changes to your distribution patterns and will show, in hard figures, what the potential savings are.
At Paragon Software, our customers experience an impressive ROI usually between 10% and 30% in operational expenses.
Hard examples include Marigolds & Onions, an event planning and catering company in Toronto, which said that using Paragon software has reduced its use of third-party couriers by 50% and reduced delivery labor by 20%, saving $15,000 per month and seeing pay back within 3 months of going live. Frozen Food Express, a US nationwide carrier, says revenues grew 9% in the first six months of implementing Paragon route optimization software because of improvements in the company’s ability to deliver a consistent and reliable delivery service.
Maybe your company’s distribution is struggling to meet growing customer demands. Maybe you are growing faster than your current route planning methods can keep up with.
In most cases, investing in software that drives efficiency in operations prevents you from buying more assets or throwing cash at extra resources. Doing so could save you a very significant amount of money, giving you the best ROI — from the money you didn’t have to spend in the first place.
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