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Show Me the Money
20 Jun, 2011 By: Robert GreenGain management support for your ideas by presenting them in terms of the dollars they'll save.
Editor's Note: This article originally appeared in the Winter/Spring 2011 issue of Cadalyst magazine.
Good managers realize that management is the art of dealing with problems to keep operations running smoothly. But great managers are always on the lookout for problems that they can solve proactively to realize savings and increase efficiency. So it stands to reason that CAD managers who actively find and fix hardware, software, and user problems save their companies time and money, right?
You've probably seen all sorts of problems around your company that you'd like to fix, if only you had the authority to do so. In fact, you probably have a pretty good idea of how to fix those problems — via configuration, upgrading, training, and so forth — if you could get the budget and time. The good news is that the key to gaining the needed approval and authority may be as simple as documenting the cost of those problems and touting the savings you could achieve by fixing them.
The Savings Plan
Start your quest for savings by asking yourself the following questions:
- Where are the CAD processes or procedures that sometimes fail in our environment?
- Are our standards difficult to follow? If so, why, and what can we do to make this easier?
- Which manual procedures could we automate to save time?
- Which programs and hardware don't always work properly?
- How can we train our users to help eliminate confusion and error?
Get a pad of paper and start writing down the answers that pop into your head. You'll be surprised by how many things there are around your office that actually are broken, but you've been putting off fixing. Make this exercise even better by asking your CAD power users the same questions and listening to what they tell you.
After you've collected your answers, you should have a problem to-do list to form the basis of your cost-saving plan.
Quantify Problem Costs
For every item on your problem list, you have an opportunity to create savings — if you can eliminate the problem. The trick is to quantify the savings of each problem so you'll know where to focus your efforts to achieve maximum payoff. Here's an example of how to quantify problem costs.
Problem. Users continue to have troubles plotting because of their confusion about proper page setup and line-weight use.
Quantification metrics. You have 20 users who plot. You estimate that each user averages approximately 1 hour of lost labor per month due to plotting problems. You know that the average CAD user costs the company $35 per hour. Ask your management for the pay rate if you don't know.
Calculation. 20 users x 1 hour (per month) x 12 months (per year) x $35 (per hour) = $8400 per year
Find the Fix
Next, you need to compute the cost of fixing the problem so you can ultimately arrive at a savings figure. Read on to continue our savings example.
Fix. Revise plotting standards, deploy to user machines, and provide a half-hour training session.
Metrics. Revising and deploying standards will take 8 hours of your time valued at $60 per hour. The training class will consume half an hour for each of 20 users for a total of 10 hours.
Calculation. 8 hours (CAD manager) x $60 (per hour) + 10 hours user training x $35 (per hour) = $830
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