CAD Management Finances, Part 427 Jul, 2006 By: Robert Green
Analyze your CAD plan through finance and ROI.
In the past three issues of the CAD Manager’s Newsletter (click here for archives), I’ve discussed how to approach CAD management from a financial angle and have given you some metrics to help keep score. If you haven’t had a chance to read the first three parts of this series, please take the time to do so now because I’ll be building upon the concepts presented in them for this installment.
This week, I’ll give you some practical advice on how to build a CAD management plan that takes advantage of these financial skills. Even if you don't consider yourself a financial CAD manager per se, you should analyze your CAD management plan from a standpoint of finance and ROI (return on investment). Here are some ideas and general guidelines you can use to go over your CAD management plan from a business perspective.
Indisputable management truth #1. Management loves it when you save money! One of my earlier recommendations was to generate a list of cost-savings ideas and quantify how much money you can save with each idea. If you haven't made that list yet, do it now and keep it handy because we’re going to revisit it in just a moment. By having your ideas in list format, you can't help but focus on cost-savings potential and you'll be less tempted to segue of into other CAD management endeavors that may not provide savings opportunities. Having a cost-savings list also ensures that you'll never forget a great idea.
Now that you're armed with a list of great cost-savings ideas, the question becomes what should you pursue first. In order to make that decision, let's go to the next topic.
Indisputable management truth #2. Management loves it when you get things done fast! Use this truth to your advantage by looking through your cost-savings list in a particular way.
- First, go through your cost-saving list and decide which items can be accomplished the quickest.
- Second, go through your cost-saving list and decide which items will take the longest time to accomplish.
- Third, rewrite your list with the easiest items to accomplish first and the hardest to accomplish items last. Do the best job you can prioritizing the items left in the middle. The items at the top of your new list are now the best cost-savings ideas that can be accomplished the fastest.
Save Money Faster
Indisputable management truth #3. Management loves to save money and the faster they can save it, the more they like it! I call this need to save money with a fast return the “faster-cheaper” paradigm. That being said, if you can show management a cost-saving idea that you can implement quickly, your management realizes real cost savings and fast return. They'll have no choice but to recognize you for being a brilliant savings strategist who gets quick results. Those who save quickly are hailed as managers who “get results” and “do the impossible” because there are very few cases where cost savings lead to faster business processes.
It's no accident that I've had you rewrite your cost-saving list in a way that emphasizes cost-savings ideas that can be accomplished quickly. There are few things I can guarantee, but I'll guarantee this: If you bring cost-savings ideas to the table and make them happen fast, you'll get management's attention and you'll have their continued support. Why? Because you're making their business more profitable.
The Technology Sales Angle
As a CAD manager you use technology to work cheaper and faster but technology is sometimes an area that senior management doesn't understand. By using the faster-cheaper paradigm, you're selling the concept of advanced technology in financial terms with which senior management is very comfortable.
I always advocate keeping as up-to-date as you can with new technology and finding the cost-savings potential in new software and hardware for all CAD managers, but to make changes our ideas must approved. By justifying and presenting your cost-saving technology ideas using the business metrics of cost savings and time savings (faster-cheaper), you’ll be much more likely to convince management that your ideas are valid.
CAD Financial Success
I hope you found this series of newsletters on CAD management finances useful in your day-to-day CAD management environment. I strongly recommend that all CAD managers sit down and generate a list of cost-savings ideas and analyze them for their faster-cheaper potential. In fact, it would be worth your while to go back and reread this entire series of newsletters and see how much more sense it makes now that you're thinking about things from a financial perspective.
In the next couple of newsletters, I'm going to revisit a topic that we haven't looked at in some time: outsourcing. I receive a number of questions and phone calls about outsourcing, so it's time to revisit this issue. Until then.