A Cell Phone for a 12 year old?
Posted by Rakesh Shukla on Thu, Jun 04, 2009 @ 01:59 PM
It's been about a year since one of my very first blog posts titled, A Cell Phone for an 11 year old?
A year ago, my son tried to make the case that he needed a cell phone but had no idea of the costs.
It turns out that he actually didn't use his phone that much to talk. Instead, TEXTING became all the rage. I became aware of this when our monthly bill doubled! You see, I didn't have him on a texting plan, and he sent and received 750 texts!
"Do you realize that sending text messages cost money?" I asked.
"Uhhh, no"
"Do you realize you texted 750 times last month?"
"Sometimes I get 50 in a day!" he responded proudly.
"What are you texting about?"
"Stuff" he replied like it was none of my business.
At that point, I got concerned and asked him to hand the phone over so I could see what was going on.
Here was a typical text conversation with one of his buddies:
SON - hi
BUDDY - hello
SON - im bored
BUDDY - me too
SON - bye
BUDDY - bye
750 texts like this! I put him on a plan and told him not to go over 500 texts in a month.
Anyways, the same lack of knowledge about costs continues to persist about technology investments.
Check out this chart:
What is striking (at least to me) is that almost 20% or respondents have NO IDEA of the return on their technology investments!
That's excusable for a 12 year old but not a finance manager ... especially an AP manager. Other surveys (such as IOMA's) show that most AP departments have no idea of current costs even after the economic turmoil we have been through.
Here is the point I made last year which I feel is still valid now:
Survey after survey shows that the #1 priority for most finance departments and especially AP is cost reduction. Well, how can you make the case to save money with proposed/desired initiatives if you don't know your current costs???
The other benefits of a formal cost analysis are a better understanding of your current AP processes and inefficiencies, as well as establishing the groundwork for future benchmarking to measure how you are improving as an organization and how you compare to other organizations.
IOMA also states that when it comes to technology investments, "traditionally, AP has not been a priority, which is why so many organizations rely on completely manual processes. ... The problem is that most AP Managers do NOT build a good enough case."
How can you build a case for any type of investment if you don't have a handle on current costs? Understanding costs would be a NECESSARY first step to building a case for technology investments.
-Rakesh Shukla