Estimating Business Investment

[Abstract]
The purpose of this document is to provide an increased or basic knowledge of how automating the business by using computers and applications has advantages and disadvantages. Also included within this document is a plan to estimate the return on investment for automating the business, as well as, a determination of automating the business will allow employees to be more productive. Finally estimation will be made to the benefits of automating the business versus the investment cost.

[Content]
Business automations help make a business run more efficiently, effectively, easily, and prevents duplication of efforts. Prior to automation, if a CEO wanted to write a memorandum and get it out to all of the employees they would have to type the memorandum, print as many copies as there are employees and then either route the document or physically go an give it to each individual. With automation they can simply type the memorandum into an e-mail and send it to everybody and ensure everybody has received it within seconds. This not only is faster and more efficient, but it is also paperless, which is good for the environment as well. Automation helps the company run smoother and effectively by giving everyone within an organization access to information within seconds, which used to take minutes, hours, or even days previously. Not only can people have access to information within seconds, but also security can be put into place that ensures only authorized personnel have access to the data when they need it (nist.gov, 2008). Business automation helps a business run more efficient in order to provide a better product or service.

Continuously improving products and services are necessary for any business to grow and in order to improve products or services there are many tasks that need to happen in between such as: update mailing lists, process orders, administrative paperwork, etc (Lopez, 2005). When a business is trying to determine weather they should consider the total amount of time it takes an employee to manually perform the tasks that want to be automated. Once that number has been counted, the next step is to consider the total cost of automating the business. Once those two numbers have been calculated the total return on investment can then be determined. For example: if it takes 1 employee 8 hours a day of performing tasks manually at $20/hour then the total cost is $80 a day to perform the business tasks manually. Next if the total cost of 10 computers is $20000 plus another $10000 for network equipment then we know the total cost is $30,000 for all necessary computers and networking equipment. Although it may look cheaper to perform the tasks manually we calculated for just one day. The total cost for an entire year is $29,200. It is clear that within a little over 1 year the automation equipment will have completely paid for itself. The total return on investment is definitely worth the initial cost of purchasing the equipment.

References

1. (2008, May 7th). NIST.gov – Computer Security Division – Computer Security Resource Center. Retrieved August 10, 2008, from NIST.gov – Computer Security Division – Computer Security Resource Center Web site: http://csrc.nist.gov/groups/SMA/sbc/
2. Lopez, Marcos (2005, December 5th). Why Automating your Business could be very Profitable. Retrieved August 9, 2008, from Why Automating your Business could be very Profitable Web site: http://ezinearticles.com/?Why-Automating-your-Business-could-be-very-Profitable&id=108011

Facebooktwittergoogle_plusmail