Understanding and Quantifying Value

Please note: this article is designed to provide some guidance and information to those who haven’t considered a FoxPro database migration or conversion project before, and touches upon some of the key considerations that we recommend your business builds into the planning process. Given the range of different bespoke systems out there, which vary significantly in terms of both size and complexity, it’s difficult to provide firm figures about the cost of migration.

If you’re considering a database migration or conversion project, it’s important to evaluate what your current system is worth to your business.

If you’re running a bespoke FoxPro application, it could easily have been a decade or two since the application was first set up for your unique business, and system developments that have taken place over recent years (to ensure that the software still met your requirements) would have added additional value to the system. As a result, sitting down and trying to quantify the value that the software brings to your business can be an eye-opening process, and will mean that you’ll have a better appreciation of whether the cost of a database migration or conversion project will prove to be an efficient and positive investment.

When it comes to measuring the value of conversion/migration, there are two kinds of benefits to consider.

The first of these are ‘tangible’ benefits, that can usually be quantified in financial or time terms. For example, if you save money in the long term by paying out a single lump sum for development that works out to be less than you would pay out over the next couple of years to ‘firefight’ and maintain the failing software, that is an obvious and immediately tangible financial ‘win’. In-house productivity and efficiency levels can also be a tangible benefit if the conversion/migration process makes it quicker and simpler for your staff to carry out their tasks. Conversion/Migration may also help make your business more competitive, commercially, as you may be able to pass any savings that you can make on to your customers in the form of lower product or service costs.

However, not all of the benefits of the conversion/migration process are as obvious. It could be that by re-developing your software, you are able to improve customer satisfaction or overall ‘user’ experience. These could lead to improved business reputation or a more positive brand identity – all factors that could help to justify the financial costs of conversion/migration but are harder to quantify in absolute terms when you are considering whether a software investment is going to have a good ROI.

If you are unsure whether conversion or migration is a feasible expense for your business, there is one important question to ask yourself – what would the cost be to your business if your system failed? It’s important to ask yourself whether your business could manage without this integral system? If not, how much would it cost you to address this issue? By establishing these costs, it should be easier to allocate a suitable and appropriate budget to the conversion/migration project.

Once you have calculated the potential value that conversion/migration could bring to your business over the next 3, 5 or 10 years, experience tells us that starting out by allocating 10% of that figure to use as a budget benchmark is a useful practice. However, don’t forget that the costs associated with conversion/migration don’t just need to cover the initial work – often, 60-90% of the total cost of the conversion/migration project is for maintenance and support over the lifetime of the system. Software isn’t a static entity so additional functionality is likely to be added to the system over time, which should, in turn, increase the ultimate ROI of the new software.

Once you’ve attributed a value to the cost of a new system for your business, and worked with a developer to ensure that this is as realistic as possible, it’s worth considering how you are going to finance this work – an idea that we will cover in the next article in this series.

Get in touch with us if you would like to discuss your individual needs and circumstances – we would be more than happy to provide some initial guidance or fill in the form below for some sensible advice on the subject.