Calculating API Wizard ROI

ROI Thresholds

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ROI is represented as a percentage.  The following is a general, gross-industry guideline regarding
 

• Fair ROI: An ROI close to 0% to 15% is often considered fair, indicating that the investment is paying off but not significantly impacting the bottom line.

• Good ROI: An ROI in the range of 15% to 30% is seen as good, showing a more substantial benefit that justifies the investment.

• Great ROI: An ROI above 30% is usually regarded as great, indicating that the investment has made a significant positive impact on financial performance.

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Assessing Costs and Calculating Benefits

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Assessing Costs

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Software investments typically involve several types of costs: the purchase price of traditional or subscription licenses, ongoing support fees, training expenses for staff to effectively use the new tools, and implementation costs.
API Wizard costs can vary from only a few thousand USD to 100,000 USD or more depending on the number of users.  

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Calculating Benefits

• Time Savings: API Wizard significantly reduces resource hours by simplifying and streamlining data processing, speeding up workflows and reducing the demand on staff time.

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• Quality and Compliance Improvements: API Wizard helps improve data accuracy, which helps optimize process efficiency, minimizing mistakes and rework. 
   

• Cost Savings: API Wizard decreases labor costs and minimizes error rates, which leads to additional labor cost savings. Typically time savings is converted to cost savings by using a 'burdened resource cost' and multiplying that by the number of resource hours saved.

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Example 1: ROI on Small API Wizard license

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Overview:
 

This analysis evaluates the return on investment (ROI) for a small API Wizard license used by three users to enter and update Sales Orders. The license costs 4,000 USD per year on a subscription basis.  The users spend 50% of their time doing Oracle work.  Please note that currency in the example below is all in USD.
 

Assumptions:
 

• Usage: The license is utilized by three users for Sales Order entry and updates.

• Cost: Annual subscription fee of $4,000.

• Employee Working Hours: Each user works 40 hours per week across 47 weeks per year, totaling 1,920 hours annually.

• Task Allocation:

  • 35% of time spent on entering new orders (2,016 hours per year for three users).

  • 15% of time spent updating existing orders (846 hours per year for three users).

  • 50% of time spent on other tasks (2,880 hours per year for three users).

• Efficiency Gains with API Wizard:

  • Time spent on new sales orders is reduced by 60% (savings of 1210 hours annually for three users).

  • Time spent updating orders is reduced by 90% (savings of 778 hours annually for three users).

  • Total Time Savings: 1,988 hours annually for three users.

  • Burdened Cost Rate: $25 per hour (including salary, benefits, and overhead).

• Financial Impact:

  • Total Savings: 1,998 hours saved * $25/hour = $49,950.

  • Net Savings: $49,950 (savings) - $4,000 (cost) = $45,950.

• ROI Calculation:

  • Formula: ROI = (Net Savings - License Cost) / License Cost * 100%

  • ROI = ( 49,950 savings – 4000 cost) / 4000 cost * 100% = 1149%

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Conclusion:
 

The implementation of the API Wizard license for three users shows a significant ROI of 1149%, highlighting the efficiency and cost-effectiveness of the software in streamlining sales order processes. This strong ROI underscores the value of investing in the API Wizard software to enhance productivity and reduce operational costs.
 

By any metric, this is a substantial savings and easily justifies the API Wizard license.

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Example 2: ROI on Medium API Wizard license

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Overview:
 

This analysis evaluates the return on investment (ROI) for a mediums-sized API Wizard license used by thirty users to process Oracle data in the areas of item maintenance, procurement, and finance. The license costs 22,500 USD per year on a subscription basis.  The users spend 50% of their time doing Oracle work. Please note that currency in the example below is all in USD.
 

Assumptions:
 

• Usage: The license is utilized by 30 users across 3 departments for item maintenance, procurement, and finance activities.  This might include, for example, tasks such as item entry and maintenance including BOMs (item instances) and routings (work definitions) purchase order entry and maintenance, AP Invoice entry and maintenance, supplier entry and maintenance, and receipt application.

• Cost: Annual subscription fee of $22,500.

• Employee Working Hours: Each user works 40 hours per week across 47 weeks per year, totaling 1,920 hours annually.

• Task Allocation:

  • 50% of time spent on Oracle tasks (19,200 hours per year for fifteen users). 

  • 50% of time spent on other tasks (19,200 hours per year for fifteen users).

• Efficiency Gains with API Wizard:

  • Average time savings on Oracle work of 50% (savings of 9,600 hours annually for three users).

  • Total Time Savings: 9,600 hours annually for three users.

  • Burdened Cost Rate: $25 per hour (including salary, benefits, and overhead).

• Financial Impact:

  • Total Savings: 9,600 hours saved * $25/hour = $240,000.

  • Net Savings: $240,000 (savings) - $17,000 (cost) = $223,000.

• ROI Calculation:

  • Formula: ROI = (Net Savings - License Cost) / License Cost * 100%

  • ROI = ( 240,000 savings – 17,000 cost) / 17,000 cost * 100% = 1312%

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Conclusion:
 

The implementation of the API Wizard license for three users shows a significant ROI of 1312%, highlighting the efficiency and cost-effectiveness of the software in streamlining sales order processes. This strong ROI underscores the value of investing in the API Wizard software to enhance productivity and reduce operational costs.
 

By any metric, this is a substantial savings and easily justifies the API Wizard license.