Life Time of Business Experience over a Cup of Coffee
Straight to the point, he said. “I’ve a problem. I run a fleet of trucks. I want to know if the tyres of my truck have been efficiently used or not. I want a software built for that.” we smiled, because, we knew we had to say a “no” in the most generous way. That’s the way we are. We believe, if a software has to be build, there has to be 2 reasons.
Primarily, there should be an ROI (Return on Investment). This is because customised software doesn’t come cheap.
Secondarily, there may not be a positive ROI, but there is a will power to be the first in the industry with an industry changing idea.
If it’s either of this, it ignites us to say yes to a project. But, if it’s a combination of both, it becomes our passion!
So, naturally, on the progression towards a no, we asked, “Why do you want to build this software”. To which he replied, “I want to be a technology driven company, and that’s how the future is going to be, for all the industries”. Good enough answer, but, we have experienced, that for any successful businessmen, at the end they go in search of ROI, once they have invested some amount of money. The conversation went on and gradually, with not much of a reason to say no, we replied, “we don’t think it is feasible, but lets see if there is any ROI to doing this project.”
How many trailers do you have?
75 trailers. Each trailer – 18 tyres. Each trailer runs on an average – 8000km per month. So an average tyre should run for 80000km (at various positions of the trailer and if treated well).
So, that means, about 1620 tyres a year. Each tyre, at a cost of Rs.15000. The total cost of just procuring tyres for 75 trailers is about Rs. 25 million (just the cost of tyres). That’s mind blowing!
On an average, if a trailer, changes the tyres at 10%-20% early, which is very common, the loss is about INR 4 Million annually. Now, the impact on the trailer, driving with bad tyres is another loss. It may be a bad road, a bad driver or various other factors. There is another 20% more losses attribute to this “just tyres”. With a target of reaching 400 trailers (200 reached, when we wrote this), it would mean a neat loss of more than 10 million, annually! Now, that’s an ROI.
The combination of ROI and passion for technology!
The rest is history, we build the said software in less than 4 months. It should have been less time, but there are lessons learned even here. This realisation of an ROI ran into few other projects as well.
This experience has taught us that, to get an optimised and best ROI;
- There should be adaptability, a company should be ready to keep adapting with changing technology.
- There will be lot of resistance, but to swim against that, is the test of your will power.
- There needs to be an ownership from the customer’s end. A CEO or the owner would be ideal.
- The more difficult part is the continuity of the software. You need to make sure that the software you designed with passion must keep running.
- Software saves you money. The ROI is not immediate, but gradual, and exponential once you break even.