SAP TIPS AND BEST PRACTICES
Improving ROI for government organizations
Scott McCready
05.06.2003
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Return on Investment for government organizations is an interesting area and one that could involve writing a book. However, let me try and touch on the major highlights:
No Taxes
Government institutions do not pay taxes and as a result cannot depreciate their investments over time. This means that the initial costs of a project tend to be much higher for government than for private companies that can depreciate many of those costs over several years. Therefore it is important to try and move some of these costs out in time to improve your ROI. Work with your supplier to get better discounts on hardware and software and be willing to pay more for support and maintenance. Other strategies that you may require to improve your ROI is to:
Lengthen your deployment times
Be very selective in how you use professional services. For large projects use most of your professional services budget to get help in designing the optimal system configuration. Pay particular attention to using as few boxes and processors as possible since this will drive not only your software and hardware costs but also support and maintenance. Size your system for current needs not future requirements. Boxes and storage are getting cheaper all the time; Look to size your system as tightly as possible.
Invest in training -- this will lower your ongoing costs
Finally make sure you account for all of your benefits. There is no such a thing as an unquantifiable benefit. For example a social services agency we work with deployed a system that allowed a greater percentage of disabled people to work. We suggested that part of their benefit of their system is the taxes that those people would now pay. Also the savings in any government funding they were also getting such as social security payments. Even payments for psychological counseling and the cost of prescriptions for depression all were factors taken into consideration. Finally we asked them to put a price on the happiness of an individual that can now be independent that could not be before. Although ROI is not designed to come up with such a measure it did make everyone stop and pause because government is so much more than just the numbers but until you run the numbers it is sometimes hard to realize just how much more.
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