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Strategic Thinking: Always Evaluate the Cost of Doing Nothing

Strategic Thinking: Always Evaluate the Cost of Doing Nothing

Why lost opportunity costs should be part of every technology investment proposal

Foodservice directors know only too well that there is a cost associated with nearly every business decision made in a food or nutrition management operation. From determining the number of full-time employees needed to staff an outlet to evaluating the cost of a new combi-oven, seasoned directors know their numbers.

On the other hand, one cost that is not always considered is that of doing nothing. And when it comes to evaluating and selecting foodservice management or clinical nutrition management application solution, putting off a decision — doing nothing — clearly can and does have a cost.

Time and time again, one will hear operators lament their budgetary constraints and how other capital requirements in an organization will trump capital requests from Food and Nutrition Services. Foodservice is often placed at or near the bottom of the ‘food chain’ when it comes to considering when and how discretionary capital funds may be spent.

One big factor is that foodservice departments are not seen as major contributors to the bottom line of the larger organization. While there may be a real need for and benefit from implementing an automated foodservice management tool, it can be hard to justify that investment in the context of traditional ROI evaluation criteria.

At the same time, many directors operate in institutions where the focus is heavily outcome-driven. That is why it is so important to establish a connection for one's administration between a foodservice department's technology resources and internal profitability, as well as the harder-to-evaluate benefits of protecting an institution from legal liabilities.

This is precisely where the vendor community can assist by partnering more closely with directors. Business development teams, specifically those representing substantial purchase items, tend to be quite experienced in navigating the many organizational barriers that sometimes get in the way of obtaining needed capital funding.

For technology related products in particular, involving a team from the Chief Information Office or the Project Management Office (PMO) early in the process is often a good first step. Seasoned IT professionals are not only savvy about issues related to implementing technology systems, but also may be able to obtain access to additional sources of funds. Offering more efficient maintenance and workflow solutions to them can often be the key to interdepartmental collaboration and heightened likelihood for funding.

Such partnerships between the vendor and IT can also raise the visibility of a nutrition department's goals, challenges and needs while still allowing each party to proceed in their respective areas of expertise.

Dollars are never easy to come by. Especially in the current economic environment, it is common to hear the sentiment that “We just can't afford to save money right now,” even if the expenditure might reduce operating costs, improve outcomes, reduce liabilities or at minimum, have a guaranteed return on investment.

What often happens is that even after a system is selected and a purchase proposal or service contract is drafted, these remain unsigned and end up being filed away, awaiting future budgetary approval.

What may not be considered is that there are costs incurred by the operation during such delays as food and nutrition departments continue to run manual operations or the use of systems with excessive indirect and qualitative costs.

This last point is one that can be used to strengthen many foodservice technology investment proposals. By initially focusing not on the cost of an item, but rather on its guaranteed savings, a stronger case can sometimes be made. This reinforces the idea that for every day a decision is not made, there is indeed a cost associated to it.

In summation, with the argument that one “can't afford to save money,” sometimes significantly more is being spent.

Stephanie Luros is the Director of Marketing for Computrition, Inc. a leading provider of foodservice management application solutions to the healthcare, higher education, military and corrections segments. You can reach her at [email protected].

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