TxM 016 Section 1.14 The REAL cost of SEPT Versus the REAL cost of conventional solutions And the REAL value of SEPT Created by James on 6/26/2013 5:34:10 PM
1. The REAL cost of SEPT – senior personnel
The REAL cost of Strategic Engineered Precision Taxonomies and Configuration is the time required from Executives and senior managers to design, implement, adopt and apply strategic taxonomies.
This is a very visible cost although the real cost of the alternative is, over time, much higher.
2. External advisor
SEPT will generally require a more senior, more experienced and more expensive advisor and facilitator than the alternative approaches, again this extra cost is, over time, outweighed by the serious inefficiencies of the conventional approach.
3. Software
Precision taxonomies and, particularly the Cubic Model, are almost impossible to maintain without software that guides operators and maintains standards.
This is a very visible cost although the inefficiencies that result from the alternative approach rapidly consume far more than the software cost.
4. REAL cost of traditional solutions – lost management efficiency and bad decisions
The REAL cost of traditional solutions – badly structured or unstructured lists is first and foremost through lack of high quality management information delivered in a timely manner that supports better decision making. The biggest cost is the lost opportunity cost and business risk that results from bad decisions or delayed decisions and wasted management and executive time.
5. Direct costs of traditional solutions
Traditional solutions carry substantial hidden direct costs such as additional staff costs, higher than necessary audit costs and other operational inefficiency costs.
6. REAL value of SEPT – gained management efficiency and better decisions
The REAL value of SEPT lies in faster access to information, much more information available, immediate answers to every question, answers to questions not previously thought of, etc -- all resulting in improved management efficiency which allows the organization to grow without additional management and administrative complement.
There is also a potentially massive, but hard to quantify, benefit relating to decision making efficiency – less time to reach decisions and decision making quality – better decisions. One really good decision can be worth millions or even tens or hundreds of millions as can one bad decision avoided.
7. Direct savings associated with SEPT
The effective implementation of Strategic Engineered Precision Taxonomies and Configuration also leads to considerable operational and direct savings in terms of reduced consultant / contractor costs, reduced headcount (through natural attrition) or increased throughput for existing headcount, reduced wastage, increased efficiency at all levels, reduced audit costs, etc.
The real costs and real value must be understood in order to make a sound business investment decision when embarking on a SEPT project...
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