The Minimalist's Guide to CAD Software Upgrade Decisions

It's a chore you'll have to tackle sooner or later, so apply this methodology and make your evaluation as quickly as possible.

Author's Note: This is the second installment in "The Minimalist's Guide," an occasional series that shares ways to be a more efficient CAD manager. In each installment, my goal is to condense a complex process into a best practices overview document to help you save time and avoid common mistakes. I hope you'll find them useful.

It's a fact that sooner or later, an upgrade will be released for your CAD software. When that happens, you'll need to make a quick decision about whether implementing the upgrade will be worth the time, effort, training, and expense.

In this edition of the CAD Manager's Newsletter, I'll share my methodology for evaluating upgrades, which seems to work for every type of CAD software. Here goes.

Always Test the New Upgrade

Whatever else you do, you simply must put the new upgrade through some basic testing. Of course, if you have a product support subscription you will get your upgrade automatically, but if you don't, consider the following approaches:

• Use a 30-day trial version to test
• Get involved with beta-testing programs
• Ask your software dealer for a limited-time loaner version.

All these methods can offer you a limited amount of time for testing. The beta version has an added advantage: You'll test new software before anyone else can!

By the way, these methods work great for exploring new software as well. So whether you're evaluating the latest upgrade to your ol' faithful program or just looking to kick the tires on an unfamiliar product, do what it takes to actually get your hands on the software.

Document the Evaluation Process

Make sure you build the following elements into your testing protocols:

Use your own data. Don't use test data supplied with the new software. Instead, use data that you already have, or create new tests using the same types of projects you would normally design. The goal is to see how the software works with a typical cross section of data you would normally use.

Note changes. Any differences in elements such as ribbons, toolbars, browsing interfaces, or content libraries may cause problems for your users. Sometimes an upgrade can seem like a downgrade when old familiar commands change!

Evaluate new features. Take some time to go through the new features touted in the upgrade's documentation. Sometimes you can find a new feature that perfectly fits your needs — those are the features you're looking for!

Get a second (and third) opinion. Once you've identified the changes, new features, and possible problems with the upgraded software, invite a few trusted users to check it out and share their impressions. If they aren't enthusiastic when the software is new, you can bet they won't be excited later on when they have to learn it.

Write it up. Create a summary document along with your decision about whether the upgrade merits further consideration. This writeup will be the basis for continuing your upgrade process — or not.

Work the Numbers

Let's assume that you've reviewed the information in your summary writeup and decided to proceed with the upgrade. If so, you'll need to sell the idea to your management team, and you'll only be able to do that if you work the numbers. Here's how I calculate the financial impact of implementation:

List software cost. If you get your software on subscription automatically, this number is zero. Otherwise, the purchase cost plus tax is the number you want.

Estimate installation cost. This is simply a total of the CAD management and IT time that will be required to get the upgrade installed. First tally the hours required, then multiply by the hourly rates for the personnel involved.

Estimate training preparation cost. This is the number of hours it will take you to prepare documents, reserve rooms, hire outside experts, and anything else it will take to conduct training. This number will be higher than you think.

Estimate training cost. This is the cost of the time your user base will spend in training. Simply multiply the number of users by the number of training hours and the users' labor rate.

Estimate savings. After users are trained, how much efficiency will they gain? Will it be one hour per week, or two, or one-half? Simply multiply the number of users by the hours saved per year (one hour per week is about 48 hours per year when you consider vacation time), then multiply by the user's labor rate.

Note: The savings calculation is very important; this number is the only thing that will pay for the software, installation, and training costs incurred in the implementation.

Find the Return on Investment

The return on investment (ROI) may be determined from the data you collected above. Just follow this equation:



Just a glance at the above equation shows that it is all about the savings! In fact, if your first year of savings is greater than the combined cost, your return on investment will be greater than 100% — you'll be making money on your upgrade in less than a year.

Given that most software upgrades are in use between one and two years, you'll need to have an ROI of at least 50% to make a case for implementing the upgrade (read on for a more specific rule of thumb).

Go or No Go

Equipped with all your data and your calculated ROI, it is now time to make the argument with your senior management staff to secure funding. Based on the ROI, here are my guidelines:

• ROI < 50% — Don't bother. There simply aren't enough savings to justify it.
  
• 50% < ROI < 67% — Maybe. Savings will pay for the upgrade in 18 to 24 months.
  
• 67% < ROI < 100% — Probably. Savings will pay for the upgrade in 12 to 18 months.
  
• ROI > 100% — Yes! Savings will pay for the upgrade in less than a year.

I've come to realize that this line of reasoning is the only way to get upgrades funded by senior management and the finance department. Do yourself a favor and base your decision on ROI, not emotion.

Summing Up

Making smart upgrade decisions is equal parts software exploration, user testing, and cost computation. In my experience there's no way to make an informed decision without doing the homework to evaluate all three of these factors. The good news is that when you apply this methodology, you'll have the concrete information you need to approach your senior management team with confidence.

Do you have any tips for making upgrade decisions? Please e-mail them to me. If I select your tip, you could even win a cool Cadalyst prize. Until next time.