December 7, 2007

Tape Adding Machines - A Very Expensive, Unnecessary Addiction

The mechanical paper tape adding machines setting on corporate desks next to high priced personal computers are not normally thought of as an inordinate expense. In fact, it is my experience that those mechanical machines are considered by companies to be a necessity. Nothing, in my opinion, could be further from the truth on either count. Those antiquated, mechanical dinosaurs can actually be a very expensive and unnecessary addiction to which there is an inexpensive alternative.HypothesisMy hypothesis is that mechanical paper tape adding machines, or printing calculators, are no longer viable office equipment when they are sitting next to personal computers. Pencil and paper spreadsheets pretty much disappeared shortly after the advent of the personal computer. This migration of spreadsheets to software was seen as a very sensible move since electronic spreadsheets provided much more functionality in a very easy to use format.A similar migration, in my opinion, is long overdue for mechanical paper tape adding machines. With the availability of feature rich adding machine programs like myOwn10-Key, it no longer makes sense to continue using the costly, feature deprived mechanical devices. The electronic adding machines, like electronic spreadsheets, offer much more functionality in a very easy to use format. Electronic tapes also contribute significantly to the bottom line when compared to antiquated printing calculators.Analysis FactorsTo test my hypothesis, I did an ROI analysis of converting to myOwn10-Key for United Parcel Service. Why choose Brown? Because the UPS web site displays very detailed technical information for the company. The number I needed was a count of personal computers in use at UPS. As of Sunday, August 5, 2007, the number of LAN Workstations in use at UPS was listed on their web site as 149,000. That was the starting point for my calculations.Here are the other assumptions I needed to complete the analysis. I tried to be on the conservative side for all of these factors.* Percent of personal computers with a printing calculator sitting beside it - 30%.* Price of paper rolls - $8.48 / 12 pk.* How often a new paper roll is installed on each printing calculator - every 2 months (6 / yr).* Price of printer cartridges - $3.00 ea.* How many printer cartridges are consumed on each printing calculator - 1 / yr.* Percent of printing calculators replaced per year - 10%The cost of purchasing mechanical paper tape adding machines for new employees is not considered in this analysis. Also not considered in the additional cost of the power required to operate the mechanical adding machines.Annual Cost Of The DinosaursFor this analysis, I created an ROI analysis etape with myOwn10-Key. You can view the entire analysis etape in another browser window or tab by clicking on the "View eTape" link in the resource area at the end of this article. I encourage you to click on that link now so you can follow along on the etape.The etape calculates the annual expense of maintaining an estimated population of mechanical adding machines first seen on line 4. As seen in the first part of the etape (lines 1 through 33), the annual expense of maintaining the printing calculators, is, in my opinion, revealed as something much more than trivial. On line 33 you can see that the annual price tag for keeping all those mechanical tape adding machines on desks next to personal computers is just under $550,000.The next question is what would happen if those antiquated dinosaurs were replaced with a full featured adding machine program like myOwn10-Key? The remainder of the ROI analysis etape answers that question.Cost Of Converting To myOwn10-KeyOn lines 35 through 50 of the etape a quote is calculated for a site license for myOwn10-Key. I based this calculation on my 60-40 Plan which is available to large corporate customers. Under this plan, the price is based on 60% of the personal computer population being licensed. A 40% discount is applied. The site license is then issued for 100% of the PC population being considered.For this analysis, I'm assuming that UPS would want a site license only for those personal computers on which a companion mechanical adding machine is being replaced with myOwn10-Key. Company PCs that do not have a companion printing calculator are not included in the site license.As seen on line 48 of the ROI etape, converting to electronic tapes with myOwn10-Key has a very attractive, one time price tag of just over $320,000. The ROI period works out to about 7 months. This analysis illustrates that the savings to be realized from converting to myOwn10-Key can be substantial. Remember, these numbers are based on conservative analysis factors. The actual savings could be much more. These annual amounts fall straight to the bottom line.* Savings first year - $226,093.* Minimum savings each year thereafter - $547,128.In addition to these dollar savings, there are also environmental benefits. Not buying paper tape and ribbons in cardboard packaging means less pressure on our forests. And not throwing out broken machines and exhausted ribbon cartridges means fewer non-degradable plastics going into our landfills.Do Your Own AnalysisThese potentially large savings, plus the environmental benefits of converting from mechanical paper tape adding machines to myOwn10-Key are available to any large corporation. To find out what kind of savings your company can realize, download the myOwn10-Key ROI analysis etape (link provided below) and plug in your own values on the below tape lines. (The 60-40 Plan assumes a PC population of at least several hundred. There is a different discount schedule for smaller populations.)2 - Total PC Population3 - Percent of your PCs with printing calculators sitting beside them7 - Price you pay for each paper roll 12 pack13 - Average number of paper rolls consumed by each calculator each year19 - Average number of ribbon cartridges installed in each calculator each year20 - Price you pay for each printer cartridge25 - Estimate of the percent of your calculators that are replaced each year26 - Estimated cost you pay for new printing calculatorsWhen any of the above values are changed on the etape, the entire etape is recalculated. The lines on the etape that are highlighted in blue and green (when the etape is opened in myOwn10-Key) are Master/Derived Values. These lines are linked such that updated subtotals cascade to following sections on the etape.(If you do not have a copy of myOwn10-Key, download a copy from my web site. You can use the program free in evaluation mode for 30 days.)ConclusionIn my opinion, mechanical paper tape adding machines are a costly, outdated addiction. Migrating the adding machine functionality to electronic adding machine software, like myOwn10-Key, makes excellent business sense both from cost and environmental perspectives. I think it's time the mechanical paper tape dinosaurs faded into the same sunset where pencil and paper spreadsheets disappeared almost 30 years ago.
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About the Author: George Gilbert writes software for personal computers. View eTape: myOwn10-Key ROI Analysis (60-40 Plan)Download eTape: myOwn10-Key ROI Analysis (60-40 Plan)Web Page: myOwn10-Key