more offline.

umesh

more offline.

umesh

That is a very difficult question. It’s different for every industry and product. Also, very different depending on if you are talking about an upfront or specialist implementation.

I spent about 9 years developing ROI’s for upfront CFD software to help customer justify a purchase. Most all of those were pretty standard $$ justifications based on amount of time and material costs stripped out of the traditional physical prototyping and testing process. For example: if you can strip prototype iterations from 10 down to 4, just figure out who (Engineers, Designers, lab technicians, etc) put how many hours at what burn rate and pop out a pretty easy answer.

That is usually enough to get a sufficient ROI… but it is way lower than the real ROI. But, these are the numbers that EVERYONE will believe.

The bigger ROI is often harder to get people to buy into. For example: What if the widget you make is made out of copper, weighs 10 pounds, and you find a way (through CAE) to strip that down to 4 pounds. Oh, and lets say there is a yearly production of 100k widgets per year. Those kinds of material cost savings can add up millions and millions of dollars.

A harder one (but also often gigantic one) is time to market. Sales & Marketing folks should understand and totally believe this… but often people in Engineering or other departments don’t buy it as easily. For example, if you can shorten the design cycle to 4 months from 6 months. those 2 months could mean that you beat the competition to market and immediately become the eclipsing leader. Or, they could simply mean that you have 2 more months of revenue for that product line… which all can be attributed directly to using CAE rather than prototyping and testing. Both of these can be HUGE depending on the volatility of your particular market and kind of product.

The good news on this time-to-market bit: most professional marketing folks should be able to give you fairly real and accurate estimates of additional revenue to be had by early product releases: often in $$/week or $$/month.

Good luck and feel free to contact me offline if you’d like to bounce some ideas for your particular situation: 401-441-6699.

That is a very difficult question. It’s different for every industry and product. Also, very different depending on if you are talking about an upfront or specialist implementation.

I spent about 9 years developing ROI’s for upfront CFD software to help customer justify a purchase. Most all of those were pretty standard $$ justifications based on amount of time and material costs stripped out of the traditional physical prototyping and testing process. For example: if you can strip prototype iterations from 10 down to 4, just figure out who (Engineers, Designers, lab technicians, etc) put how many hours at what burn rate and pop out a pretty easy answer.

That is usually enough to get a sufficient ROI… but it is way lower than the real ROI. But, these are the numbers that EVERYONE will believe.

The bigger ROI is often harder to get people to buy into. For example: What if the widget you make is made out of copper, weighs 10 pounds, and you find a way (through CAE) to strip that down to 4 pounds. Oh, and lets say there is a yearly production of 100k widgets per year. Those kinds of material cost savings can add up millions and millions of dollars.

A harder one (but also often gigantic one) is time to market. Sales & Marketing folks should understand and totally believe this… but often people in Engineering or other departments don’t buy it as easily. For example, if you can shorten the design cycle to 4 months from 6 months. those 2 months could mean that you beat the competition to market and immediately become the eclipsing leader. Or, they could simply mean that you have 2 more months of revenue for that product line… which all can be attributed directly to using CAE rather than prototyping and testing. Both of these can be HUGE depending on the volatility of your particular market and kind of product.

The good news on this time-to-market bit: most professional marketing folks should be able to give you fairly real and accurate estimates of additional revenue to be had by early product releases: often in $$/week or $$/month.

Good luck and feel free to contact me offline if you’d like to bounce some ideas for your particular situation: 401-441-6699.

very nice blog..

i am managing a team of expert CAE in a very dynamic company. One thing which we are asked is how do we measure ROI for CAE tools. Many know the qualitative value of it, however, would like to know the $ value of the work we do. do you have any suggestions on how to measure an ROI on a typical CAE project?

very nice blog..

i am managing a team of expert CAE in a very dynamic company. One thing which we are asked is how do we measure ROI for CAE tools. Many know the qualitative value of it, however, would like to know the $ value of the work we do. do you have any suggestions on how to measure an ROI on a typical CAE project?