Quality management software can complement an organization’s overall quality program by providing real-time tracking metrics, process analysis, document management and archiving, and regulatory agency compliance, among many other things.
Whether or not an investment in quality management software will pay off for an organization depends in large part on its size and complexity, the level of detail contained in its quality management system, and the manufacturing processes employed by the company. When used properly in the appropriate applications, quality management software can generate a substantial ROI for the business.
These software systems can help a business improve its bottom line in a variety of ways:
- reduced overhead and administration costs,
- improved productivity,
- reduced off-spec production,
- production rate increases,
- input material cost reduction,
- risk mitigation, and
- targeted capital investment.
It can also provide benefits to an organization in less tangible ways, by helping it comply with regulatory agency requirement reporting, improve customer service, and demonstrate compliance with standards during audits.
Reductions in overhead costs are possible with quality management software because it provides an automated database for the storage and retrieval of documents, can be automated to assign tasks, send follow-up reminders, track progress and task completion, route documents for approval, and escalate issues when needed. Fewer clerks and central office staffers are needed to manage the filing storage and retrieval systems, or administer calendar-based tasks. If training and competency testing is included in the software system, scheduling, testing, and reporting can all be done automatically, reducing training staff requirements.
Improvements in production and processes can be obtained using quality management software through the data collection and analysis modules of the application. Data from every area of the manufacturing facility can be pulled in to the program, and can be tracked and compared in any way a business sees fit, in real time if desired. With such capabilities, a business can see where production bottlenecks exist, where defective products are being generated, where raw material usage is too high, and where throughput could be increased. These shortcomings can then be monitored and targeted for improvement with selective capital investments or management oversight.
Quality management software can help a business stay on top of its obligations to regulatory bodies and auditors by providing automatically -generated compliance reports, performing internal self-audits, and having all materials available in one centralized location for review. It can improve customer relations by escalating complaints to the appropriate level of management for rapid mitigation. In doing so, it may be possible for an organization to reduce its legal staff, retainer fees, or lobbying costs.
Return on Investment
Determining the ROI of quality management software involves first benchmarking processes and determining where the software could provide benefit, and then placing a value on that benefit. If, by implementing the software, a business can reduce office staff by one person, that has a value. If one defective part can be eliminated out of every 10,000, that has a value. If productivity can be improved and overtime costs reduced by four man-hours per day, that has a value. Value can be based individually on specific software modules, or can be calculated based on expected synergies from a complete software package.
When determining the cost side of the equation, in addition to the software itself, it is important to include the engineering, implementation, and software maintenance costs, as well as any training that will be needed, and the temporary loss in production as employees get up to speed on the new processes. The software may have an annual licensing fee. There may be a required service contract fee. It may be necessary for the company to partner with a local vendor to perform system backups or hardware upgrades. All of these costs must be included to get an accurate assessment of the software investment’s ROI.
Calculation methods for determining ROI vary within each business, but however it is calculated, it will be very obvious whether quality management software is a worthwhile investment for a business. If the calculations show that it is, it is important to invest in only what is needed from a software standpoint. It is unnecessary to invest in a wholesale custom solution if off-the-shelf software will work. Money is wasted buying a complete turnkey software program if only certain modules are needed to get the value of the benefit.
Most importantly, the business must be sure to go back and reassess the processes once the new software is in place and functioning to ensure that it is getting the true value it anticipated from the software. If the benefits do not meet projections, those responsible must be held accountable for the deficiencies in the system.