How meaningful is the key figure return on investment for digitalization projects?

The benefits of digitalization and the resulting data in industrial companies are undisputed. On the other hand, there are, of course, costs. In the investment decision, profitability is measured with the key figure ROI (Return on Investment). Here you can find out how meaningful this indicator is for digitalization projects and which factors still need to be considered in digital investments.

Which factors are relevant for both the classic and the digital return on investment in digitalization projects?

When calculating the classic ROI, the savings and the costs of an investment are put in relation to each other. If a company buys a new, faster machine for 1 million and can produce 10% more, the investment pays off after a certain time. Whether an investment is definitely profitable is usually calculated on the basis of “hard factors” such as costs, turnover or revenue. However, such a calculation falls short in the case of digitalization projects.

Due to the complexity and long duration of digitalization projects, profit distributions are difficult to see and to measure. Rather, it is about a sustainable investment in the company. In addition to the classic cost-benefit calculation, other internal and external factors must also be taken into account. These include:

Therefore, it is so difficult to calculate whether an investment in digitalization projects is profitable.

Which digitalisation initiatives can increase ROI?

The use of digital tools provides a lot of data that can support business management, production planning and supply chain optimization. The challenge is to use this data to make an informed decision.

The impact of digitalization projects should not be underestimated. The corporate culture, the business processes or even the employees can be affected. Such initiatives trigger new kinds of challenges.

Those who strengthen the corporate culture and manage people properly from the beginning will find it easier to overcome problems within digitalization projects. Agile ways of working are therefore needed to prepare employees with necessary skills.

In the classic approach, the focus is on long planning cycles and easily maintainable products, whereas in digitalization projects it is on the iterative approach. Feedback from the customer can be taken into account for implemented functions. Additions are thus evaluated more quickly and adapted if necessary.

How can Digital Moulds help calculate the return on investment in digitalization projects?

Mould Monitoring supports automotive OEMs in tool monitoring and digital mould management. For this purpose, the hardware is integrated into the production process at an early stage, entirely according to the plug & play principle, and then transmits all relevant data.

The entire lifecycle can be transparently documented and visualized with the cloud-based software solution Mould Lifecycle Management (MLM).

Proof of concept as the ideal basis for decision-making

Digital Moulds creates a Proof of Concept (POC) for your digitalization project. This concept enables you to create an individual calculation for your company with the data obtained.

How does a POC with Digital Moulds work?

1. In the first step, you name the key users and we create them in your tenant.

2. Our experts then prepare the devices and show you the user and rights management in a guided tour.

3. During an on-site appointment, we clarify the expectations with you, define use cases and gain an overview of the system landscape and processes.

4. Regular feedback meetings are held until the end of the POC.

5. At the end, we present you with the final report, including an individual ROI calculation, at a final on-site meeting.

As a rule, such a POC takes 6-12 months to complete. However, the POC is particularly non-binding due to our billing model.

Starting signal for a realistic ROI calculation for your digitalization project.

Data for ROI calculation always only reflect the past. They do not give any guarantee that things will develop the same way in the future, especially in digitalization projects. Data on certain parameters, such as employee satisfaction, corporate culture or brand image, are often missing. So experts can only estimate. Due to such areas of uncertainty, ROI calculations can rarely yield an exact figure. Much more likely is a range of results.

Digitalization with mould monitoring creates new potential for your company. But does this scalable digitalization project really pay off? With a POC from Digital Moulds you minimise the investment risk. In addition, you get all relevant data at the same time to make a comprehensible and data-based decision. Arrange an independent consultation appointment right here!

Your FAQs

For example, we developed the tool IoT of the BMW Group – tool on screen worldwide. The Digital Moulds Monitoring System is integrated into the moulds early in production and then transmits data of the worldwide location and use of the mould. That digitization project brings more transparency to the supply chain and helps to counteract problems early on.

At the beginning, you should take an inventory. After that, you need to define your goals. Then you derive concrete measures from these goals. With MoMo, you can collect important status data according to the plug & play principle and thus maintain an overview. Your advantage is that MoMo works globally. So, you have the same possibilities from all locations.

Image of Digital Moulds CEO Julian Resch

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