Building the business case for your digital investment is hard, so you need to drill into the specifics of any given process you intend to digitize. Digital track-and-trace solutions contribute to ROI in many different ways. The main strategic reasons for using them are:
- More effective risk management. Many countries are putting in place regulations that force manufacturers in several sectors to serialize products by assigning them a unique code. Not being able to provide product-specific information risks fines by the regulator. Digital track-and-trace solutions can help you avoid penalties for noncompliance.
- More efficient asset management. Track-and-trace solutions help you improve the reliability and availability of your assets. They give you a complete, controlled, centralized, and real-time view of your assets, including their location and their current state of operations. These insights generate benefits in the form of lower costs through improved asset maintenance as well as lower operational risks through reduced equipment downtime.
- Enhanced customer engagement. Better asset-specific transparency can translate into better-quality service and more proactive customer service, via geofencing services or preemptive maintenance, for instance. The CFO of a packaging company told us that, “We have communicated more with our customer due to [the track-and-trace project of] serialization in the last six months than in the last seven years combined.”
- Smoother ecosystem participation. Track-and-trace solutions help organizations record, authenticate, maintain, and share accurate records of assets along the entire value chain. In turn, this facilitates ecosystem-based collaboration by increasing trust between ecosystem partners. Effective end-to-end communication is an essential component of a positive ROI for track-and-trace investments.
- Better data-driven insights and decision making. To derive the most benefits, your future track-and-trace investments must help managers make better decisions faster. Track-and-trace solutions will boost data-driven insights and decision making for a wide spectrum of business activities, ranging from inventory optimization, work scoping, and prioritization to performance benchmarking and customer experience management.
In an upcoming report on track-and-trace solutions, we investigate the overarching problem of measuring digital ROI. We are using track-and-trace solutions as an example of how to calculate returns for digital investments based on defined business cases. The report is part of a series of reports that focus on the ROI of digital transformation initiatives.