Forwarding note from TGREEN --RALVM8, 02/10/94 09:58
Date: 10 February 94, 09:57:07 EST
From: TGREEN at RALVM8
To: GIBBY at WMAVM7
Subject: Note from WNEUBERG at ENDVM5
FYI.
Terri
----------------------------- Referenced Note ---------------------------
MSG:FROM: WNEUBERG--ENDVM5 TO: TGREEN --RALVM8 02/08/94 15:34:51
To: TGREEN --RALVM8
Terri ,
I just sent you a file from our local WOW listing savings associated with using the WOW architecture. Keith covers most of them in his business case. I think he can quantify more than he does, but it would be an estimate at best. He's being very conservative, I think. We used to quantify savings ... if you're interested I could dig some stuff up.
Wendy
From: Wendy Neuberger ENDVM5(WNEUBERG) TL (855)-5051
IS&I Data & Business Management Endicott, NY
Forwarding note from TGREEN --RALVM8 02/08/94 12:09
Date: 08 February 949 12:07:26 EST
From; TGREEN at RALVM8
To: WNEUBERG at ENDVM5
Subject: (U) IPSWOW
Re: Note from GIBBY at WMAVM7
Wendy,
Any comments???
Terri
------------------------------- Referenced Note ---------------------------
MSG:FROM: GIBBY --WMAVM7 TO: TGREEN --RALVM8 02/08/94, 09:05:51
To: TGREEN --RALVM8
Keith S. Gibby, C.P.M., Contract/Sr. Subcontract Administrator
301/240-6070 TL: 372; PITNEY FAX: 301/240-7114 TL: 372
Subject: (U) IPSWOW
Terri, I am attempting to estimate the costs/savings associated with implementing the Corporate Purchasing Information Repository and IPSWOW. The "IPSWOW Implementation Plan" you sent me provided me with some very useful cost information. By chance, has anyone attempted to estimate the savings resulting from implementing IPSWOW? The following is the 1/93 "Business Case" section of the document I submitted to Corporate Procurement to justify the implementation of a centralized repository for sharing IBM Procurement information:
Business Case
The technology which makes the implementation of an IBM Procurement computer conference disk also provides for a substantial opportunity for IBM Procurement to increase the availability and dissemination of current procurement information. In addition there are significant tangible and intangible benefits which will be achieved from creating this disk.
Justification Approach
Corporate Directives Compliance
The development and use of Conferencing enables both the applications support and owner organizations to comply with the directives and policies mandated by Corporate, maintaining information as a Corporate asset and managing that asset.
Re: Managing Information Resources
"Every IBMer is responsible for making sure this resource is properly managed and used. The right information must be made available to the right people at the right time,, and at the least cost. We have to take full advantage of recent advances in information Processing, office systems, and telecommunications technology."
Re: Managing the IBM Information Resource
"Regardless of form or media, information is a corporate asset that, like other corporate resources, must be managed with sound business practices and controls. Information that is accurate, current, relevant, and readily available is essential in conducting IBM's business."
Strategic
Conferencing is an integral part of the IBM's Information Initiatives regarding managing constantly changing information and making it available across the entire function quickly, easily and consistently. An IBM Procurement computer conference disk will:
Conferencing:
Tangible Costs/Benefits
Direct costs, for this discussion, are costs related to the productivity, printing, distributing, mailing, and waste as they relate to the production and distribution of Procurement information. These costs are viewed as necessary to run the business, but can be managed and controlled with a computer conference disk solution. This will allow IBM Procurement to reduce expenses and increase productivity while maintaining a high standard of quality.
Productivity
Every day someone in Procurement needs access to information. They waste time looking for the material, or even worse they redevelop the information if it cannot be located, or place a rush order at additional cost. Waiting on information can seriously impact an employee's or an entire department's productivity.
Printing
Costs continue to rise, and turnaround time often takes several days with additional expenses for expediting. IBM Procurement spends thousands of dollars annually on printing and distributing paper required for the business to function.
Distribution
The distribution cost of procurement information within IBM is much more than just mailing cost. How many different people handle the information before it reaches the end user? What is the transportation cost to reach the end user?
Mailing
Postal costs continue to rise and represent a substantial expense to IBM. A softcopy solution eliminates mail expenses, and the speed of softcopy distribution saves considerable time over mail.
Waste
Procurement information can require frequent changes such as technical updates, contact names, addresses, area codes, zip codes, rates and these changes, suddenly Procurement's telephone numbers. With information is worthless. On average, IBM scraps six percent (6%) of all publications inventory annually. Information is typically scrapped as the result of obsolescence or excessive stock.
Intangible Costs/Benefits
In addition, a review of intangible costs such as availability, processing time and obsolescence as they relate to the production and distribution of publications, documents and forms. Let's review the costs which drive IBM's business processes and determine the impact these costs have on its operations.
Out-of-Date
Murphy's Law of published information states, "If the wrong information be used, it will be used."
Process Time
Documents carry information that is the essence of IBM's business processes. A shorter processing time not only increases employee productivity, but it also provides for better customer service and removes unnecessary delays in revenue receipt.
Availability
Availability means always having the right information in the right place at the right time and never being out of stock. Imagine not being able to write a report, develop a presentation, or respond to a customer's inquiry because you don't have the right information available.
Costs/Savings Calculations
Savings: Year 1 Only
$1,929,375 (1500 IBM Procurement personnel x 35 (see footnote 1 below) hrs saved per person/year x $36.75/hr.
Implementation Costs: Year 1 Only
$5,332 (60 hours to implement
Footnote 1: An average of 35 hours saved per employee is extremely conservative when considering that 182.83 hours saved per employee per year was documented by formal survey when the MKTTOOLS disk was implemented.
Estimated Savings first year
Savings: $1,929K
Impl. Costs: - 5.3K
TOTAL SAVINGS: $1,923.7K (year 1 only)
Estimated Savings five (5) years
Estimated Savings 5 years: 1,923.7K 1993
(assume 3% nominal growth) 1,981.4K 1994
2,040.9K 1995
2,102.lK 1996
2,165.IK 1997
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TOTAL ESTIMATED SAVINGS - 5 years $10,213,200 (1993-97)
Summary
The implementation of an IBM Procurement computer conference disk is an excellent, cost-effective method for IBM Procurement personnel to increase the availability and dissemination of current information, enhance the decision-making process and productivity of all Procurement employees, and reduce Procurement's business costs and cycle time while increasing Procurement's quality and effectiveness.
END BUSINESS CASE
Thank you for your time and assistance in this matter.
*** Forwarding note from GIBBY --WMAVM7 02/02/94 15:23
To: TGREEN --RALVM8
Keith S. Gibby, C.P.M., Contract/Sr. Subcontract Administrator
301/240-6070 TL: 372; PITNEY FAX: 301/240-7114 TL: 372
Subject: (U) IPSWOW
Terri, thank you for sending me the DRAFT IIIPSWOW Implementation Plan". The document gives me a pretty good understanding of how IPSWOW is being rolled out and the costs associated with implementing it. By chance, has someone attempted to estimate the SAVINGS associated with implementing IPSWOW?
*** Forwarding note from GIBBY --WMAVM7 02/02/94 10:44
To: TGREEN --RALVMB Terri Green
Keith S. Gibby, C.P.M., Contract/Sr. Subcontract Administrator
301/240-6070 TL: 372; PITNEY FAX: 301/240-7114 TL: 372
Subject: (U) IPSWOW
Terry, thank you for taking the time last week to discuss the implementation of IPSWOW. I reviewed the notes from our telephone conversation and couldn't find who you said had the action to determine what standardized agreements/letters etc., tools (i.e., purchasing education modules) would be and sample documents (i.e., semi-unique purchasing agreements, procurement best-processes, sample statements of work)? Did you say it was you/IPS, Corporate Procurement, a joint effort between these organizations or other?
Also, in your implementation/business plan, has anyone estimated the costs/savings associated with implementing and maintaining IPSWOW. I am trying to determine how the costs/savings of implementing IPSWOW compare to those of Corporate Procurement's Repository.
Thank you for your time and assistance in this matter.