A 600-bed hospital managed by the Mayo Clinic was among the first to calculate and publish the results of an ROI analysis of RFID in a healthcare setting. The final number was impressive: 327% ROI over the first three years, with break-even at less than a year.
But maybe your organization isn’t in the healthcare business. You manage a professional services company, a manufacturing business, a museum, or a retail store. How do you calculate RFID’s ROI when your operations are quite different from a hospital’s operations?
ROI calculations, at their most fundamental, start with questions.
- What items are vital to your operations? Answer very specifically (e.g. “33 laptop computers with 16 gb of storage,” rather than “computers”). These items can be operational elements, or manufactured products, or a combination.
- Visibility: How many times per day/week/month does an item go missing? How often are you short on supplies?
- Intrinsic value: What does the loss of an item cost – not just the hard cost, but the cost of intangible added value? Artwork or data are examples.
- Management costs: What is the cost of periodic inventories or audits to maintain operations?
- Ancillary costs: How much income is lost due to down time when an item is missing or lost, or supplies run low? Are there costs associated with regulatory fines for lost items? How do inaccurate inventories in one department impact other departments’ finances?
With these numbers in hand, calculate two cost scenarios. One scenario is for existing conditions. The other includes the potential improvement to visibility provided by RFID. Most RFID users see visibility (loss) improvements of 60% or better.
But to truly calculate ROI, we have to project the potential savings over an extended period, usually 3 to 5 years. The Net Present Value (NPV) formula gives the most realistic ROI projections for RFID. The NPV formula shows whether the benefits outweigh the costs.
If you manage finances for your organization, you’re familiar with NPV. If you work in a less math-intensive department, you might find an NPV calculator useful. Either way, the answer will give you a strong indication of the wisdom of an investment in RFID. We’re quite confident you’ll be pleasantly surprised by the outcome!
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The benefits of digital asset management (DAM), including RFID, are a hot topic these days. RFID applications are available for any sort of business. But owners and managers of organizations in the service sectors, from finance and law to healthcare and education, may think RFID is just an inventory tool for the retail and logistics sectors.
If you think your enterprise couldn’t benefit from RFID, think again.
- Asset Tracking – Ever notice how there are never enough chairs in the conference room? Furniture, laptops, and other work tools have a way of wandering from their assigned locations. RFID tags keep tabs on the location of these peripatetic items, as well as providing information on their age and condition. Office and facility managers can easily identify aging furnishings that need repairs or replacement, and pinpoint the location of every physical asset. Plus when inventory time comes, the RFID system can deliver a document listing the assigned value of each item currently in the facility, making financial reporting quicker and simpler. What is does it cost your business to update capital inventory records by hand?
- Personnel Tracking – In busy public settings like hospitals or schools, knowing the location of key personnel can save time, or even save a life. RFID-enabled personnel badges keep track of people’s movements and current whereabouts so no time is wasted when someone is urgently needed. RFID personnel badges work with an institution’s security system to manage access to restricted areas and maintain safety. And in emergency situations, an RFID system can tell first responders who is inside and where they are. What is the dollar value of RFID-managed security and safety?
- Document Tracking – We always advocate converting paper documents to digital documents via a well-planned imaging program; imaged documents are secure, shareable with teams, and save the real estate costs of large file rooms. But in many offices there are documents that need to be retained as paper even if they have been imaged. Paper files are easy to lose or misplace (one of the advantages of imaging), but with the addition of small, inconspicuous RFID tags, the location of a file can be tracked throughout an office. Doorway RFID readers monitor the movement of files from one room to another, and files can be located with a quick look at the tracking record. PricewaterhouseCoopers estimates an average of 25 extra hours to recreate a lost document; how much would that cost your business?
Keep in mind that RFID, unlike bar codes, doesn’t require direct sight lines to record and track business assets carrying RFID tags. Once items or personnel are assigned their unique RFID tag, doorway readers track their movements automatically as they pass from one room to another. And inventory updates can be as simple as walking into a room and pressing a button on an RFID reader. You’ll instantly collect data on all the capital assets the room contains; no need to look through cabinets and underneath furniture to read bar code IDs. RFID is a timesaver, and like its other benefits, that translates into money.
RFID systems come in many shapes and sizes, and can be scaled up or down to suit your organization’s needs. When you start adding up the costs of lost documents, lost equipment, and lost time, it’s clear that you shouldn’t miss out on the benefits of RFID.
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The IRS is acting like Oprah, and small businesses across the U.S. are benefiting. Thanks to Section 179, the IRS is handing out a $1,000,000 deduction to every small business that puts qualifying equipment and/or software into use before the end of the year. Rather than depreciating equipment over the course of several years, Section 179 allows businesses to deduct the full price of equipment in Year 1, up to $1,000,000. That’s an enormous tax benefit.
And it gets better: Even if you finance the equipment rather than paying for it up front, you still qualify for the deduction. Leases as well as purchases are included in this rule. You don’t have to hand over a pile of cash in order to reap the Sec. 179 benefit.
Almost any tangible business-related product qualifies for the deduction, including:
- Equipment purchased for business use
- Computers and off-the-shelf software
- Data hardware (essential for imaged-document storage and access)
- Office furnishings and fixtures, including high density mobile storage and lockers
- Office equipment
- Certain business vehicles, including fork lifts and 9-passenger vans
- Property attached to your building that is not part of the building structure (casework and industrial shelving, for example)
- Tangible personal property used in the business, or equipment with a partial business use
- Some improvements to existing business-only buildings, including security systems, HVAC, and roofing
There’s one small but essential thing to remember: The new equipment must be placed into service by December 31.
With only a few weeks left in the year, that deadline may seem like an insurmountable scheduling problem. Luckily, many business-equipment vendors offer quick-ship programs for their clients who want to take advantage of the Sec. 179 deduction. If you’re planning an equipment acquisition in the first quarter of next year, why not buy it now, put it into use before the end of this year, and get the money the IRS put under your seat?
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No one can doubt the value of museums and libraries. These institutions are the repositories of our collective cultural memories, preserving history via written word and artifact, helping us find our way forward by knowing where we came from. And our U.S. collecting institutions – libraries, museums, archives, historical societies, and scientific collections – have created truly remarkable assemblages, according to the recently released results of the Heritage Health Information Survey:
- The U.S. is home to more than 31,000 collecting institutions.
- More than 13 billion items, from artworks to arrowheads, are preserved in these institutions.
- Of those 13 billion items, many are in the form of individual paper documents, enough to fill 347 Olympic-size swimming pools.
Given these astonishing numbers, it’s no surprise that proper storage is vital for these collecting institutions. Museums and archives in particular put much of their effort into the conservation of their unique collections. They need storage that not only accommodates all the unusual sizes and shapes of artifacts, but preserves objects from further deterioration. Humidity and chemically-incompatible surfaces are damaging to any ancient artifact, and those Olympic pools of paper documents are especially prone to insect damage as well.
Luckily, storage providers have already anticipated the needs of collecting institutions, designing an array of space-saving, customizable, and protective systems. Adjustable shelving and partitioned drawers and bins fit artifacts both large and small. Flat files are well-suited to paper documents and unframed photos and paintings, while vertical racks hold framed artworks. These museum-friendly storage systems have non-reactive finishes and are sturdy enough for the heavy weight of stone sculptures or military ordinance.
Museums are chronically challenged to find enough exhibit space for their treasures, but a well-designed storage system can transform storage space into additional exhibit space. A high-density mobile storage system can save up to 50% of floor space, and a vertical storage carousel or a multi-level shelving system saves up to 80% of floor space.
Keeping track of all those objects can be a challenge, too. A written tracking system is time-consuming and often inaccurate. A bar code system is better, but it becomes ineffective if bar codes are obscured or damaged. An RFID system, with inconspicuous RFID tags that communicate with an RFID inventory reader, allows museum managers to track an object as it moves from storage to conservation room to exhibit room.
The work of U.S. collecting institutions is too important to trust to outmoded storage methods. With the help of an experienced storage consultant, conservators can look after their collections properly, now and in the future, as their collections grow far beyond the current numbers.
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Like it or not, office hoteling is a reality for many workers today. For those whose work is self-contained, and who enjoy choosing where to do their work on any given day, the flexibility of hoteling is highly desirable. For those whose work requires access to physical elements (books, files, tools, electronic gadgetry, etc.), hoteling poses a productivity problem: Where do they keep all that stuff during off-hours if they don’t have an assigned desk where they can store it?
This has been a vexatious problem for facilities managers, office managers, and practice managers whose enterprises have embraced the concept of office hoteling. Hoteling has the undeniable advantage of reducing real estate costs through reduced office space. If only 50% of your employees are in the office most days, why are you paying for unused space?
But many types of businesses require quite a lot of “stuff” on the desk to get the job done. Maybe it’s a small-scale scanner for receipts, or a stack of documents that aren’t available online, or research materials for an ongoing project. Add to this the quantity of stuff many of us carry around through the day: workout clothes, commuting shoes, a heavy winter coat, the dry cleaning we picked up on the way to work. Without a fixed work area, all these personal and work-related items end up spread over the open workspace – not at all practical or aesthetically pleasing.
Managers are realizing that hoteling requires a type of storage solution they may not have needed in the past. Just as a hotel room contains a closet, a hoteling office needs lockers for all those personal things that shouldn’t be cluttering up the workspace.
But these aren’t the clunky hall lockers of our high school days. Today’s office lockers can be outfitted with smart digital locks linked to mobile phones for easy access. They can be sized to fit the needs of the workforce – full length or compact – and the exteriors can be customized to complement the office aesthetic. They can be an asset to the interior design rather than just an annoying necessity.
A conversation with a designer or storage consultant can point you in the direction of a solution that fits your office hoteling needs. Hoteling doesn’t have to make employees’ stuff a productivity burden, as long as a place is provided for all that stuff.
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In honor of World Book Day, Twitter hosted a curated collection of beautiful photo images of libraries around the world. These architectural gems are inspirational examples of design, paying homage to the written word even in the midst of the Digital Age. If you look closely at the photographs, however, it becomes apparent that the shelves are very crowded. Book publishers are printing more books than ever, and librarians are hard-pressed to house their collections.
Adding to the challenge is the changing nature of the library itself. No longer are libraries just a place to check out books or do research. More and more, they are centers for community activities, providing space for everything from internet cafes to classrooms to yoga studios. Flexible space utilization is a must, and librarians are constantly juggling the multiple demands of book space and activity space, without the option of increasing the building’s footprint.
However, storage technology is coming to the rescue, reports Audrey Barbakoff in Library Journal. Creative products condense collections in a number of ways:
- High-density shelving systems increase storage space while reducing the storage footprint, and the finishes can be customized to suit a library’s design aesthetic.
- Powered by AS/RS, “book bots” operate in floor-to-ceiling shelving spaces with narrow aisles too small for humans. They are entertaining for library patrons to watch, and have the added benefit of eliminating safety concerns about ladders and overhead lifting.
- Shared storage spreads the cost of storage space and inventory management among several libraries, as well as letting them share the contents of their collections and reduce excess duplicates.
Adaptive furnishings such as Swiftspace workstations can also boost libraries’ flexible space utilization, shifting from study carrel to collaborative workstation to small conference area. These workstations let libraries reconfigure their space for a variety of needs, and they fold up for compact storage.
The mission of librarians is “to improve society through facilitating knowledge creation in their communities,” according to library expert David Lankes. With the support of the right furnishing and storage systems, librarians can turn their attention to their primary mission.
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