Earlier we blogged about the value/cost equation (https://authory.com/JonParisAndSusanGantner/How-Much-Is-Too-Much-for-RDi)of RDi. It seems that great minds think alike because Charlie Guarino blogged on a similar topic recently as well. Charlie took a very different approach by putting some actual ROI figures in place to help make the case for RDi's value.
Charlie's post is an interesting read and we don't want to steal too much of his thunder here, so take a look at his ROI calculations for yourself. As you can probably guess (Charlie is as big an RDi fan as we are!), the ROI by his (fairly conservative) calculations makes RDi adoption a no-brainer. Even if you wanted to quibble a bit on the details of his calculations, which are all laid out in the post, you can make the adjustments yourself and it's still likely to come out to paying for itself a few times over in the first year--with a lot of gravy in the following years.
Reading that post reminded us that IBM published an ROI calculator for RDi a few years ago as well, so we re-visited that as a comparison point. You can find IBM's calculator here. For reasons best known only to IBM, they insist that you register to use the calculator--not using an IBM ID, but giving them a name and email address. Once you've done that, you can begin answering a few questions and it will produce some charts with ROI data. (Hint: We discovered that the email address is not validated so if you who don't want IBM to contact you can use a fake email.)
Once we were registered we found a few surprises along the way, so we thought we'd fill you in on our calculations.
You simply enter your company info on the first page (as long as your company name doesn't have numbers in it! Ours does but the form doesn't seem to accept them). Then you fill in the price of an RDi license--the pre-filled value is $1,000 US, which is pretty close to the price for a single license in the US. If you're not in the US, there is a button to help you find your local pricing.
The next screen asks for the number of new developers over three years. For our calculations, we put in five developers in year one and zero for years two and three. The average cost per developer is asked for as well. We put $60,000 for our calculation. IBM says this figure should include benefits and other costs as well but we wanted to have a fairly conservative calculation so we used that figure as an estimated salary alone.
Next you're asked to define 2 things - the percentage of time each developer spends on specific development tasks and how much RDi is expected to improve productivity on each task. So that part of the calculation process is quite detailed. This table shows what we used for our sample calculation.
These are not the default figures; these are our own estimates. Note that we assumed that 25 percent of a developer's time is spent doing non-development tasks--attending meetings, interfacing with users, etc. That's why that productivity improvement is zero. We believe that the other productivity improvements shown are very conservative. But we figured if we put in the figures we feel are more accurate, we might have too many non-believers on our hands! Also note that the developer's productivity gain will almost certainly be higher in the second and third years, but the calculator makes no allowance for this.
After filling in all the values on that page, you get the nice page full of charts showing the ROI of RDi. If you're like us--especially if you've just studied Charlie's ROI calculations--you'll be surprised that the ROI picture in the first year doesn't look nearly as rosy as expected. Clicking on the second tab (Productivity and Efficiency Gains) you'll see that even though they asked us for extremely detailed information on many things, the one detail they never asked us for--but that comprises double the actual cost of the software in our case--was a fixed $10,000 for initial education on the tool!
We are strong proponents of getting education on RDi. We believe it can make a huge difference in the overall productivity of the developers. It will reduce the learning curve time dramatically and will likely increase the usage of RDi among developers (i.e., reduce the number of occasions they fall back into old familiar habits rather than figuring out how to do a task in RDi). Of course, we're in the business of educating developers on using RDi (among other things), so we may be just a tad biased on that subject.
We think including the cost of education in the ROI calculator is a great idea. However, by not allowing that figure to be adjusted along with all the other copious details entered, we fear that many who take the figures at face value and get a distorted view of the ROI, especially in that first year--and especially if there are not five developers, but only one or two. The $10,000 figure automatically included is, to our way of thinking anyway, much larger than it needs to be, especially for shops with fewer than a dozen or so developers, which includes quite a lot of RPG shops.
So there you have it--two ways to help quantify the ROI for RDi. Of course, any calculation like this requires that one has a good idea how much more productive a developer will be doing each task. Every RDi user will be different and the figures we used above--already very conservative--assumed little or no formal training and are only the initial benefits. Over time the productivity benefits will rise as the developers learn how to use it and as the tool itself improves.
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