How Four Brilliant Organizations Used Software Innovation to Achieve Million-Dollar ROI

Everyone’s buzzing about digital transformation. The reasons are plentiful: increased performance, higher productivity, better customer service, and more. But the number one reason companies launch a digital transformation project is creating a return on investment.

Software innovation improves ROI both by improving efficiency (reducing costs) and by supporting growth (increasing revenue). So thanks to your software, your business is spending less and generating more. But what exactly can software do for your company, and how much can you save?

Let’s take a look at four brands that struck gold with their software innovation projects.

Commonwealth of Massachusetts: Energy Management

As the largest consumer of energy in the state of Massachusetts, the Commonwealth of Massachusetts’ government needed a way to monitor real-time energy usage across 25 million square feet of buildings and property.

What They Did: The Commonwealth implemented new software that could monitor usage from all of the various buildings and meters. The software not only provides real-time data on energy consumption by building, but also keeps track of energy prices, occupancy schedules, and even weather fluctuations. With this information, the operations team can pinpoint operational adjustments that can deliver significant cost savings. They can also identify equipment that isn’t performing on spec so the problem can be corrected before the machines need expensive repairs or replacement.

The Results: The software gave Commonwealth leaders the information they needed to make changes in specific buildings, processes, and pieces of equipment. Using the newly accessible data, managers could plan operations and maintenance schedules more efficiently while comparing current performance against historical outcomes.

These changes resulted in $2.6 million in low- to no-cost energy savings for the Commonwealth of Massachusetts.

Takeaway: Data can improve both operations and equipment function by providing information needed to eliminate waste and identify potential problems early. Details like an increase in temperature at a certain time of day or occupancy schedules of particular buildings can suggest ways to achieve significant cost savings when they are used to implement process changes across an organization.

AW North Carolina: Automotive Manufacturing

Outdated technology, old equipment, and resulting downtimes cost upward of $270,000 per hour for AW North Carolina (AWNC), a 1.3-million square foot factory that supplies automotive parts to Toyota.

What They Did: IT plant manager John Peterson developed a plan to modernize the entire facility including servers, software, and networking. IoT infrastructure solutions enabled real-time data collection for closer monitoring of equipment function, enabling the company to avoid unnecessary maintenance costs. They also installed firewall technology to improve security and launched a disaster recovery system to support facility management off-site if necessary. Future project stages will include deeper IoT solutions, an analytics phase, and a predictive maintenance phase that includes energy usage and vibration analysis assessments.

The Results: The new software and infrastructure has helped AWNC avoid maintenance costs, improve system uptimes, and create a solid environmental foundation for future applications and improvements.

AWNC saved $1 million in the first nine months the initial software and infrastructure were in place. They expect to see an ongoing annual savings of 40 percent in maintenance and downtime costs, as well as additional savings based on future upgrades.

Takeaway: Outdated technology is more than just a frustration to your employees. It can cost you much more in terms of lost opportunities and inefficiency than it would take to replace it with new infrastructure. Once you have the right systems in place, you’ll save money and position your company to invest in additional technology improvements over time.

Duke Energy: Power Generation

Duke Energy serves 7.2 million electricity customers in the United States. The utility generate 58,200 megawatts of electricity and distribute that energy via 250,200 miles of distribution lines. Breakdowns and equipment malfunctions in their plants cost hundreds of thousands of dollars if they aren’t identified and corrected early.

What They Did: Duke created a device integration and security framework using industrial IoT solutions, allowing them to monitor all of their power generation plants from a central location. Using predictive analytics software, the system can identify slight changes in performance well before they cause significant damage. The software triggers a warning alert, enabling employees to take corrective action and prevent power losses.

The Results: Predictive analytics enables Duke Energy not only to prevent equipment failures and expensive repairs, but also to prevent loss of power to customers. By keeping equipment up and running, the software protects revenue generation and prevents both the expense of replacing equipment or parts and the loss of revenue due to equipment failures.

Just one early alert about a steam turbine beginning to show blade separation saved the company $4.1 million.

Takeaway: IoT solutions have huge cost savings potential for industrial applications like power generation, industrial manufacturing, and automotive. By monitoring equipment continuously and analyzing the resulting data, an IoT infrastructure can detect anomalies much faster than your employees could manually. You can use that information to pinpoint problems or maintenance needs before they cause costly equipment failures.

UPS: Fleet Management

UPS manages a fleet of 55,000 drivers across the United States. Fuel expenses, vehicle wear and tear, and associated costs depend on a driver’s ability to find the most efficient route. But humans tend to rely on what they know, and that may not be the best or most cost effective solution.

What They Did: To reduce fuel expenditures and help drivers use the most efficient routes, UPS developed ORION (On-Road Integrated Optimization and Navigation), a software navigation system designed to analyze data about each day’s deliveries. The system looks at pick-up times, address points, and past performance data to find the most efficient route for each driver. It also has the ability to learn and adapt, giving drivers workable routes and speeding up the process over time. ORION was rolled out in stages and finally reached fleet-wide deployment in 2017.

The Results: During initial testing phases, UPS saved 1.5 million gallons of fuel and 14,000 metric tons of carbon dioxide emissions over the course of a year. UPS calculates that eliminating one mile from the route for each driver every day will add up to a savings of $50 million over the course of the year. And as ORION continues to cut fuel costs and reduce emissions, it could save the company $300 to $400 million in cost avoidance.

The Takeaway: Fleet management software helps you take the data you already have and use it prescriptively to make your drivers more efficient. Cost savings compound based on the size of your fleet and can add up to huge savings when you factor in fuel costs, vehicle wear and tear, and delivery speed.

Conclusion

What’s the secret to getting results like these? It starts with identifying the specific friction points or missed opportunities you’re experiencing and then developing a digital innovation solution targeted at those needs. That’s the best way to identify the unique value software, IoT, and other digital solutions can bring to your business. Once you have a good grasp on how to create the most business value, you can take the next step of developing the scope and scale of your project.

Remember, the goal isn’t just to have the latest and greatest functionality. It’s to use your software to generate revenue, cut costs, improve efficiency, manage risk, and serve customers. With those goals in mind, you will be positioned to get the highest ROI on your software investment.

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