How to build a business case for Smart Lockers
An overview of how to build a strong business case for introducing smart lockers into your business. This step-by-step guide walks you through how to determine key drivers for change, the data you need to collect and how to calculate quantifiable ROI. It’s a must read for anyone looking to improve how their deskside IT support operates in the 21st century.
An overview of how to build a strong business case for introducing smart lockers into your business. This step-by-step guide walks you through how to determine key drivers for change, the data you need to collect and how to calculate quantifiable ROI. It’s a must read for anyone looking to improve how their deskside IT support operates in the 21st century.
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HOW TO BUILD<br />
A BUSINESS CASE<br />
FOR SMART LOCKERS<br />
A step-by-step guide <strong>to</strong> impress your boss<br />
1
CONTENTS<br />
Introduction<br />
Preparing your Business Case<br />
Step 1. What are your key drivers <strong>to</strong> implement <strong>Smart</strong> <strong>Lockers</strong><br />
Step 2. Key data <strong>to</strong> help <strong>build</strong> your <strong>business</strong> <strong>case</strong><br />
Step 3. Gaining your <strong>Smart</strong> Locker costs – and benefits<br />
Step 4. Calculating your ROI<br />
Prepare your Executive Summary<br />
Step 1. Prepare your Executive Summary<br />
Step 2. The Power of Persuasion<br />
Step 3. Describe the Situation<br />
Step 4. Detail the Solution<br />
Step 5. Explain the Costed Options<br />
4<br />
6<br />
8<br />
10<br />
15<br />
16<br />
18<br />
20<br />
22<br />
24<br />
26<br />
30<br />
An overview of how <strong>to</strong> <strong>build</strong> a strong<br />
<strong>business</strong> <strong>case</strong> <strong>for</strong> introducing smart<br />
lockers in<strong>to</strong> your <strong>business</strong>.<br />
This step-by-step guide walks you through<br />
how <strong>to</strong> determine key drivers <strong>for</strong> change,<br />
the data you need <strong>to</strong> collect and how <strong>to</strong><br />
calculate quantifiable ROI.<br />
It’s a must read <strong>for</strong> anyone looking <strong>to</strong><br />
improve how their deskside IT support<br />
operates in the 21st century.<br />
3
INTRODUCTION<br />
You’ve recognised the potential <strong>for</strong> <strong>Smart</strong> <strong>Lockers</strong> <strong>to</strong> revolutionise IT support in your organisation.<br />
You’ve done the relevant research and you’re sold on the idea. Now only one obstacle remains - convincing<br />
other stakeholders within your own organisation!<br />
Sound familiar?<br />
If you fit this bill, then read on, as we have created this guide <strong>to</strong> help you <strong>build</strong> a <strong>business</strong> <strong>case</strong> <strong>for</strong><br />
a <strong>Smart</strong> Locker solution, and make sure it’s the right fit <strong>for</strong> your type of <strong>business</strong>.<br />
This guide will help you<br />
Build a compelling <strong>business</strong> <strong>case</strong> <strong>for</strong> implementing a smart locker solution in your <strong>business</strong>.<br />
Explain the ROI a smart locker solution can deliver.<br />
Introduce an innovative solution that will revolutionise your deskside IT support model.<br />
5
PREPARING<br />
YOUR<br />
BUSINESS<br />
CASE<br />
7
Your <strong>business</strong> <strong>case</strong> will be unique <strong>to</strong> why<br />
your <strong>business</strong> is implementing<br />
<strong>Smart</strong> <strong>Lockers</strong>.<br />
STEP 1<br />
WHAT ARE YOUR KEY DRIVERS TO IMPLEMENT SMART LOCKERS?<br />
The opening section <strong>to</strong> your <strong>business</strong> <strong>case</strong> should clearly state the reasons why you might implement<br />
smart lockers. These can vary from company <strong>to</strong> company, but ultimately should address some of the<br />
challenges your <strong>business</strong> is experiencing.<br />
For example, do you want <strong>to</strong>:<br />
Depending on what goals your <strong>business</strong> is looking <strong>to</strong> achieve, the <strong>business</strong> <strong>case</strong> you need <strong>to</strong> <strong>build</strong> will<br />
need <strong>to</strong> demonstrate that through implementing <strong>Smart</strong> <strong>Lockers</strong>, the <strong>business</strong> will achieve those goals.<br />
Make sure the goals you choose align <strong>to</strong> those of your manager or overall <strong>business</strong> strategy – there is no<br />
point trying <strong>to</strong> sell smart lockers <strong>to</strong> increase cus<strong>to</strong>mer satisfaction when your manager only cares about<br />
reducing cost.<br />
Clearly, you have a stronger <strong>business</strong> <strong>case</strong> if you can demonstrate that you can achieve more than<br />
one outcome. Often a well constructed <strong>business</strong> <strong>case</strong> achieves both cost savings and improved<br />
software integration/ adoption, but also less tangible benefits like improving cus<strong>to</strong>mer service<br />
and employee satisfaction.<br />
Depending on the goals you want <strong>Smart</strong> lockers <strong>to</strong> achieve, you will need <strong>to</strong> research and gather<br />
different data points and in<strong>for</strong>mation from your <strong>business</strong> <strong>to</strong> help <strong>build</strong> a strong <strong>business</strong> <strong>case</strong>.<br />
improve cus<strong>to</strong>mer satisfaction?<br />
extend your support hours?<br />
improve employee per<strong>for</strong>mance?<br />
free up IT support time?<br />
change the way support is provided?<br />
save money?<br />
9
Once you know your drivers you can focus<br />
in on the how <strong>to</strong> calculate benefits.<br />
Do you want <strong>to</strong> extend your IT support hours?<br />
STEP 2<br />
KEY DATA TO HELP BUILD YOUR BUSINESS CASE<br />
Calculating your ROI<br />
You can <strong>build</strong> your <strong>business</strong> <strong>case</strong> around several areas and calculate your ROI on the parts that are most<br />
important <strong>to</strong> your <strong>business</strong>; both qualitatively and quantitatively.<br />
A quick way is <strong>to</strong> compare the current cost of your existing IT Support service <strong>to</strong> a <strong>Smart</strong> Service.<br />
EXAMPLE:<br />
Based on your goals you will need <strong>to</strong> gather different in<strong>for</strong>mation, here are some examples of how you can<br />
collect data <strong>to</strong> help support your <strong>business</strong> <strong>case</strong>.<br />
Do you want <strong>to</strong> improve cus<strong>to</strong>mer satisfaction by introducing<br />
a frictionless service?<br />
Cus<strong>to</strong>mer Satisfaction or Net Promoter Score improvement<br />
For some companies, the value of increasing their CSAT or NPS scores, almost overnight, by around<br />
20 points, is enough <strong>to</strong> invest in this innovative service model. What value does your <strong>business</strong> place<br />
on Cus<strong>to</strong>mer Satisfaction?<br />
If you are currently only providing IT support during office hours but want <strong>to</strong> extend this <strong>to</strong> outside office<br />
hours, then you need <strong>to</strong> calculate the fully loaded cost of this additional IT support.<br />
EXAMPLE:<br />
It typically takes five people <strong>to</strong> cover a single 24 hour shift. Why five? There are three eight hour shifts in a 24<br />
hour period, on <strong>to</strong>p of this you need <strong>to</strong> add spare capacity <strong>to</strong> cover <strong>for</strong> training or sickness/ absence.<br />
If the cost of an onsite support engineer is £30,000, then providing a dedicated onsite 24 hour support<br />
service <strong>for</strong> a site is £30,000 x 5 = £150,000.<br />
Do you want <strong>to</strong> improve employee per<strong>for</strong>mance by reducing downtime?<br />
Employee Productivity<br />
Quantifying the cost of lost employee productivity is often a rude awakening <strong>for</strong> companies.<br />
EXAMPLE:<br />
Let’s assume a bare minimum of 1000 IT Request tickets are raised per year, each request takes an average<br />
2.9 days <strong>to</strong> fulfil, and employees are only 50% efficient during this period, that is 1450 DAYS of lost ef<strong>for</strong>t,<br />
or equivalent <strong>to</strong> 5.6 employees doing NO work <strong>for</strong> a full year!<br />
11
Do you want <strong>to</strong> free up IT support team time?<br />
Increase Service Desk Capacity<br />
Giving your IT support team more time <strong>to</strong> focus on important tasks, and au<strong>to</strong>mating the more menial,<br />
time consuming tasks is a big plus <strong>for</strong> encouraging adoption across the wider <strong>business</strong>.<br />
With Velocity <strong>Smart</strong> <strong>Lockers</strong> seamlessly integrating <strong>to</strong> your own ServiceNow, adoption is instant<br />
and employees can raise self-service tickets directly from their existing Request Catalogue.<br />
EXAMPLE:<br />
‘Ticket analysis shows around 40% of IT Hardware requests will become self-service in the future,<br />
which will release 15% of <strong>to</strong>tal Service Desk capacity.’<br />
Increase Onsite IT Capacity<br />
Having skilled IT support engineers act as parcel delivery personnel, collecting and delivering equipment,<br />
is not the best use of their time. Delivery can be up <strong>to</strong> 30% of an IT engineer’s ef<strong>for</strong>ts in a typical <strong>business</strong>.<br />
You can easily calculate an IT Engineer’s ef<strong>for</strong>ts by: Number of Request Tickets per month x<br />
Average ef<strong>for</strong>t <strong>to</strong> fulfil = Time. This time can be quantified further by converting it <strong>to</strong> value based<br />
upon the cost of an IT Support Agent (i.e. Salary).<br />
Do you want <strong>to</strong> change the way support is provided <strong>to</strong> smaller<br />
regional offices?<br />
Regional offices are often supported by either dedicated resources or by expensive weekly or daily trips<br />
<strong>to</strong> the office by an IT support engineer.<br />
Imagine if all the support tickets could be resolved remotely or by collecting a replacement piece<br />
of equipment from a <strong>Smart</strong> Locker?<br />
EXAMPLE:<br />
You can <strong>build</strong> a simple <strong>business</strong> <strong>case</strong> by calculating the travel costs or employee costs related <strong>to</strong><br />
supporting that remote office, then compare these <strong>to</strong> the cost of only visiting the same office every<br />
few weeks <strong>to</strong> res<strong>to</strong>ck a <strong>Smart</strong> locker.<br />
Do you want <strong>to</strong> save money?<br />
Cost per ticket<br />
If you know your average Cost Per Ticket and the number of IT Hardware Requests that can be resolved<br />
by a <strong>Smart</strong> Locker, you can quickly demonstrate this solution will deliver a positive ROI.<br />
EXAMPLE:<br />
100 tickets per month, with a Cost Per Ticket of £55 each = £5,500. The average monthly cost per <strong>Smart</strong><br />
Locker and service ranges between £450-£800. Depending upon how many <strong>Smart</strong> <strong>Lockers</strong> you deploy,<br />
this can quickly begin <strong>to</strong> save you thousands.<br />
These are just a few examples of how you can gather relevant data <strong>to</strong> support your goals and strengthen<br />
your <strong>business</strong> <strong>case</strong>.<br />
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Looking <strong>for</strong> a starting point, then take our<br />
quick online questionnaire and we will<br />
send you a tailor-made ROI model or how<br />
much time and money Velocity <strong>Smart</strong><br />
Technology will save your <strong>business</strong>.<br />
<strong>How</strong> much is the true cost of a <strong>Smart</strong><br />
locker solution?<br />
STEP 3<br />
GAINING YOUR SMART LOCKER COSTS – AND BENEFITS<br />
You will, of course, need <strong>to</strong> know how much a <strong>Smart</strong> Locker solution will cost your <strong>business</strong>.<br />
Most likely, you will want <strong>to</strong> get comparable costs from different vendors <strong>to</strong> get a better understanding<br />
of the solution and what each provider offers.<br />
<strong>How</strong>ever, <strong>for</strong> added accuracy, it is important that you make sure that you are comparing apples <strong>for</strong> apples.<br />
To do this, here are three key considerations when making comparisons on pricing:<br />
1. Implementation and ongoing maintenance - Lots of <strong>Smart</strong> Locker manufacturer’s systems require<br />
you <strong>to</strong> implement and maintain separate software, which duplicate ef<strong>for</strong>t rather than au<strong>to</strong>mate or<br />
reduce work. This can mean that a <strong>Smart</strong> Locker, whilst a great “front of house gimmick”, does not<br />
reduce the cost <strong>to</strong> serve, in fact it can increase it! Which is why Velocity is the only <strong>Smart</strong> Locker solution<br />
provider <strong>to</strong> manage all <strong>Smart</strong> locker management from within Servicenow, no extra systems<br />
and real au<strong>to</strong>mation.<br />
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2. Seamless integration with existing systems – lots of smart locker manufacturers will say their lockers<br />
can “connect <strong>to</strong> ServiceNow” but in reality, even with an available Application Programming Interface<br />
(API) there will need <strong>to</strong> be a considerable project <strong>to</strong> design, <strong>build</strong>, test and implement a Servicenow<br />
connec<strong>to</strong>r, all of which typically costs £100,000-£200,000 <strong>to</strong> implement fully.<br />
Now you have your costs and savings<br />
its time <strong>to</strong> calculate your Return on<br />
Investment (ROI).<br />
With Velocity there are no hidden costs, we have invested millions of pounds <strong>to</strong> create a ServiceNow<br />
app which can be installed in hours not weeks!<br />
3. Hidden Time and Material support costs - Make sure there are no hidden costs which, if not called out<br />
upfront, can end up costing you a <strong>for</strong>tune. For example, have you taken in<strong>to</strong> account the technical debt<br />
of maintaining an API.<br />
ServiceNow updates it’s software every six months, and end users must stay within two versions of the<br />
current iteration. This means that any in-house <strong>build</strong> must update their API at least once a year. On<br />
average, it takes 10 days of IT development work a year <strong>to</strong> stay on <strong>to</strong>p of updates, API development,<br />
security, pen-testing and maintenance. This creates a high recurring cost that would be better deployed<br />
on a guaranteed certified product.<br />
STEP 4<br />
CALCULATING YOUR ROI<br />
Once you have calculated your savings and calculated the true costs of your <strong>Smart</strong> locker solution,<br />
you can begin <strong>to</strong> <strong>build</strong> a Return on Investment (ROI) model.<br />
Here are some examples that you can <strong>build</strong> in<strong>to</strong> your ROI model:<br />
EXAMPLE ROI STATEMENT<br />
• ROI can be achieved within 14 months.<br />
• £27,000 lost productivity per month!<br />
• Equivalent <strong>to</strong> having three more staff in our head offices, worth £90,000 per year, at no extra cost.<br />
• 24/7 access <strong>to</strong> IT equipment <strong>for</strong> remote offices.<br />
• IT Engineer visits <strong>to</strong> remote offices reduced by 50%, saving £15K per month.<br />
• A 20% reduction in Service Desk calls.<br />
• Typical 20 Point improvement in CSAT/ Net Promoter Scores.<br />
• Two offices can be converted from permanent onsite IT Support, <strong>to</strong> a remote Engineer Service<br />
Model - saving 50% of costs or £90k per year.<br />
• Predictable ordering of bulk items <strong>to</strong> replenish lockers will reduce reactive single orders by<br />
an estimated 15%, saving £5k per month.<br />
• Full auditability of asset life-cycle, reducing misplaced equipment <strong>to</strong> close <strong>to</strong> zero.<br />
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PREPARE<br />
YOUR<br />
EXECUTIVE<br />
SUMMARY<br />
19
You have the supporting data, next step;<br />
writing a compelling <strong>case</strong>.<br />
Once you have built your ROI model you can now begin <strong>to</strong> create your compelling Business Case. This can<br />
be in your standard company branding and either a presentation or a word document - whichever will get<br />
the attention of the key stakeholders in your <strong>business</strong> that need convincing.<br />
EXAMPLE EXECUTIVE SUMMARY<br />
Why we should implement the Velocity <strong>Smart</strong> Collect solution in our <strong>business</strong>:<br />
• Providing replacement IT equipment <strong>to</strong> employees is an inefficient and expensive process<br />
that wastes time, money and damages productivity.<br />
• Implementing Velocity <strong>Smart</strong> CollectTM <strong>Smart</strong> <strong>Lockers</strong> will au<strong>to</strong>mate this process, reducing cost,<br />
increasing productivity, and delivering a better, more flexible 24/7 IT service <strong>to</strong> end-users.<br />
• The native ServiceNow integrated application makes this system fully au<strong>to</strong>mated and ‘zero <strong>to</strong>uch’.<br />
• The growth of WFH and hybrid working makes this the perfect opportunity <strong>for</strong> change.<br />
• The risk of not moving now is that rivals will gain the competitive advantage.<br />
• Implementation of this project with Velocity <strong>Smart</strong> Technology can make this a rapid<br />
and seamless transition.<br />
• The <strong>business</strong> will be future-proofed against all ServiceNow updates, with a trusted and developed<br />
global support network.<br />
• Ensure you include the headline benefits you identified <strong>for</strong> your specific organisation<br />
as this may be all they read.<br />
STEP 1<br />
PREPARE YOUR EXECUTIVE SUMMARY<br />
Whilst it is the first thing in your document, the Executive Summary should be the last section you write!<br />
If this is your eleva<strong>to</strong>r pitch <strong>to</strong> your boss, how can you summarise the problem that you are solving; what<br />
your recommendations are <strong>to</strong> solve the a<strong>for</strong>ementioned problems (<strong>Smart</strong> lockers clearly!); the costs;<br />
the ROI; (the list goes on) without first per<strong>for</strong>ming your research and explaining each point in detail?<br />
Your Executive Summary is a highly condensed version of all the sections that have been discussed<br />
so far in this guide. On the opposite page is one we prepared earlier.<br />
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You need <strong>to</strong> know how people<br />
are motivated <strong>to</strong> persuade them<br />
The situation: what is the problem you’re<br />
solving or the opportunity you are creating?<br />
STEP 2<br />
UNDERSTAND THE POWER OF PERSUASION<br />
The recent revolution in how people want <strong>to</strong> change their working habits has provided a huge window<br />
of opportunity. Employees are demanding more flexibility and employers must look ahead as <strong>to</strong> how<br />
they can support working from home and hybrid working models.<br />
<strong>How</strong>ever, while it may be tempting <strong>to</strong> focus on the positives of a <strong>business</strong> <strong>case</strong> <strong>for</strong> implementing smart<br />
lockers, it is also wise <strong>to</strong> make the counter <strong>case</strong> against not doing so. E.g. What are the risks of not doing this?<br />
STEP 3<br />
DESCRIBE THE SITUATION<br />
This is where you outline just how bad the problem is that you want <strong>to</strong> solve. This argument<br />
is strengthened by two fac<strong>to</strong>rs:<br />
This is predicated on the idea that when it comes <strong>to</strong> conviction, people fall in<strong>to</strong> two basic categories:<br />
The ‘reward’ “Go-<strong>to</strong>wards-pleasure” people - Those who are motivated by the positive promise of an idea,<br />
and the concept that ‘this will all be great in the future’.<br />
The ‘risk’ “Go-away-from-pain” people - Those who might dismiss the positive <strong>case</strong> as naive wishful<br />
thinking, but who will respond much better when presented with the risks of not taking action.<br />
While it is crucial <strong>to</strong> focus on the positive potential of your proposal, it’s a smart idea <strong>to</strong> always ground<br />
your argument with a reminder of the problems and constraints faced <strong>to</strong>day that might be hindering<br />
your <strong>business</strong> and impacting your work<strong>for</strong>ce.<br />
1. The statistics are shocking, and clearly demonstrate a serious problem <strong>to</strong> solve. The current system<br />
is expensive <strong>to</strong> run, and productivity loss is simply more costly. This is a powerful argument.<br />
2. The experiences have a clear resonance with most people - CEO/CIO/CFO - Board members - IT dept,<br />
as well with employees. Delays that affect productivity are an experience shared by the vast majority<br />
of the modern workplace.<br />
Everyone realises there is scope <strong>for</strong> change - so you need <strong>to</strong> make sure you stress this <strong>to</strong> your advantage.<br />
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Your Solution should clearly show you<br />
understand the true lifetime cost of a<br />
<strong>Smart</strong> Locker solution.<br />
STEP 4<br />
DETAIL THE SOLUTION<br />
If you’ve made it this far, it’s very likely you’re looking <strong>for</strong> a <strong>Smart</strong> Locker solution based on the ServiceNow<br />
plat<strong>for</strong>m. Allow us <strong>to</strong> explain why the ServiceNow integration is so important:<br />
SITUATION OVERVIEW<br />
Why we should implement the Velocity <strong>Smart</strong> Collect solution in our <strong>business</strong>:<br />
When nearly all aspects of End User IT have been modernised by digital services, the Delivery and<br />
Collection of IT equipment remains a labour intensive, time-consuming, stubbornly analogue task.<br />
It hasn’t changed in the last 20 years, and it can cost <strong>business</strong>es millions.<br />
• The Delivery and Collection of IT hardware requires lots of people, and lots of manual processes.<br />
• On average it takes between 20-30% of End User Computing (EUC) support teams time and money.<br />
• It is expensive <strong>to</strong> serve with trained IT professionals working as a parcel delivery <strong>for</strong>ce.<br />
• It provides a poor service experience - generally only within office hours with partial onsite coverage.<br />
• Reordering is costly.<br />
• Items get lost with approximately 10% of all IT inven<strong>to</strong>ry becoming ‘lost’ in cupboards and desks<br />
with no clear itemisation.<br />
• The real benefits of moving <strong>to</strong> a smart locker system are <strong>to</strong> be found in the efficiencies delivered<br />
by full au<strong>to</strong>mation. This can only be achieved with a seamless ServiceNow integration.<br />
• Without full ServiceNow integration you will still need <strong>to</strong> employ people <strong>to</strong> raise tickets and mediate<br />
between ServiceNow and a 3rd party locker management system.<br />
• Full ServiceNow integration leads <strong>to</strong> immediate uptake by employees, as it deploys software they are<br />
already familiar with and understand, meaning less resistance <strong>to</strong> uptake, or extra training requirements.<br />
• The real savings are found with a ‘Zero <strong>to</strong>uch’ system operated with a ‘single pane of glass’.<br />
• With the right solution, security will be com<strong>for</strong>table because all your company and user data is s<strong>to</strong>red<br />
safely in your own instance of ServiceNow.<br />
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WHY VELOCITY SMART LOCKERS?<br />
Velocity has developed the world’s only “Built On Now” Certified ServiceNow <strong>Smart</strong> Locker<br />
solution that integrates directly <strong>to</strong> your ServiceNow<br />
When you deploy Velocity <strong>Smart</strong> Collect, your company could experience:<br />
Velocity <strong>Smart</strong> CollectTM is designed specifically <strong>for</strong> the needs of enterprise <strong>business</strong>es and<br />
delivers several high value employee use-<strong>case</strong>s and au<strong>to</strong>mation out of the box with minimal<br />
configuration. Including Item Request, Item Return, Break-Fix, Borrow and Return, Personalised<br />
S<strong>to</strong>ck and Parcel Delivery, plus au<strong>to</strong>mated asset life-cycle and res<strong>to</strong>ck notifications <strong>to</strong> make<br />
managing the service a breeze <strong>for</strong> IT support<br />
‘Built on Now’ is the highest level of certification available, meaning that the Velocity <strong>Smart</strong><br />
Collectapp has been subject <strong>to</strong> the same level of testing as ServiceNow’s native apps.<br />
95% faster asser delivery speeds Up <strong>to</strong> 20% reduction<br />
in deskside support ef<strong>for</strong>t<br />
20+ Point average improvement<br />
in Employee Net Promoter Score<br />
Velocity <strong>Smart</strong> Collect ServiceNow application means no new applications <strong>to</strong> install<br />
and saves time <strong>for</strong> your support teams and users.<br />
Velocity <strong>Smart</strong> Collect offers the lowest <strong>to</strong>tal cost of ownership by proven, demonstrable savings<br />
in support ef<strong>for</strong>t and asset procurement costs.<br />
User request time reduced<br />
from 2.9 days average <strong>to</strong> as little as 60 seconds<br />
24/7 Delivery and Collection solution<br />
of IT equipment and peripherals<br />
Velocity understands the challenge of smart lockers is not just about manufacturing, but the<br />
whole package - analysis, configuration, flexible leasing deals, global delivery, commissioning,<br />
software & API integration, updates and support.<br />
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The greatest advantage of Velocity<br />
<strong>Smart</strong> Technology is the world’s<br />
only “Built On Now” ServiceNow<br />
Certified Velocity <strong>Smart</strong> Collect TM<br />
application, which powers our<br />
<strong>Smart</strong> Locker solution.<br />
Next step; present a range of costed<br />
options which work <strong>for</strong> your <strong>business</strong>.<br />
STEP 5<br />
EXPLAIN THE COSTED OPTIONS<br />
Any costs obviously need <strong>to</strong> be tailored <strong>to</strong> your particular <strong>business</strong> needs.<br />
i.e. OpEx or CapEx?<br />
You need <strong>to</strong> consider whether your boss hates ongoing subscriptions - or will a front-loaded<br />
project cost result in the project being shot down by your CFO?<br />
It’s important <strong>to</strong> have an understanding of which model is more likely <strong>to</strong> gain approval in your <strong>business</strong>.<br />
There’s always a ‘best’ way <strong>to</strong> finance a deal. Some CFO’s loathe the ongoing expense of a subscription,<br />
and want <strong>to</strong> make one larger up-front investment in technology, taken from the Capital ‘Cap-Ex’ column<br />
of the budget.<br />
In another scenario there may be a preference <strong>for</strong> leasing, and <strong>for</strong> costs <strong>to</strong> be spread via monthly financing<br />
deals that come from the Operational ‘Op-Ex’ line of the budget. At least 60% of the costs of the project are<br />
up front – if you don’t take a lease agreement – and that could be a big stumbling block.<br />
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LEASING DEEP DIVE: NOT ALL LEASING DEALS<br />
ARE THE SAME<br />
At Velocity, we have built budgetary flexibility in<strong>to</strong> our <strong>Smart</strong> Locker offering, by teaming up with<br />
industry-leading leasing partner Econocom <strong>to</strong> offer an array of different leasing options.<br />
Traditionally, leasing companies will only allow you <strong>to</strong> lease the value of the hardware, and they will<br />
restrict you <strong>to</strong> keeping your hardware within a single country or region. <strong>How</strong>ever, Econocom will allow<br />
you <strong>to</strong> bundle in the cost of the project, licenses, the support – everything – in<strong>to</strong> a single monthly/<br />
quarterly/ yearly charge <strong>for</strong> the whole project - so you can choose which model suits your organisation<br />
the best. Is it CapEx or is it OpEx?<br />
What is more, you can roll out your <strong>Smart</strong> <strong>Lockers</strong> across your global organisation without being<br />
impeded by the onerous requirements of hammering out a separate leasing deal <strong>for</strong> each terri<strong>to</strong>ry<br />
with a separate leasing partner.<br />
Summary: The Velocity difference<br />
You could buy other lockers.<br />
You could choose <strong>to</strong> <strong>build</strong> the API<br />
in-house.<br />
You could service and test all the endless<br />
software updates in-house.<br />
You could research and set up<br />
all the legalities of the global leasing deals<br />
in-house.<br />
You could arrange all the logistics of global<br />
delivery and commissioning in-house.<br />
Or you could talk <strong>to</strong> Velocity!<br />
31
uilding<br />
Velocity <strong>Smart</strong> Technology<br />
16 Red Lion Square, WC1R 4QH<br />
envelope<br />
phone<br />
e: info@velocity-smart.com<br />
t: +44 (0)20 3608 2768