Develope cost benefits analysis for Wormy Composting.

Wormy Composting, Inc. is considering purchasing a software application that will automate their pickup routes. They believe by automating some of the back office processes they can increase their capacity to service 20-25% additional customers.

Currently, Emma spends approximately 6 hours per day scheduling commercial and residential compost bucket pick ups in Lincoln, NE. Emma is a salaried worker whose loaded cost is $40/hour. She also is responsible for processing new customers, moves / address changes, defining the daily pick routes, assessing routes that have grown beyond capacity and adjusting as needed.

Wormy currently has a contract with Compost Logistics, Inc., a software application that plots customers and maps them for $1200 / year. They also use ACT Software to manage the customer database at $3,000 / year. Billing is done by a full-time person (Sally) whose loaded cost is $30/hour. The vehicle GPS tracking service costs $100/year. They have 5 vehicles and 3500 customers.

Wormy is considering buying a new software package that has the following features:

• Routing Module:
  • Automatically places new customers on existing routes based on their location.
  • Optimizes the daily routes and creates a manifest for each driver. Drivers use an app on their phone to see and complete each stop along the route with weight of bucket and time of pickup.
• Customer Management Module:
  • Integrates with billing, automatically refunds customer when the customer requests a skip.
  • Customers can choose if they want email or text notification when a new bucket has been dropped off.
  • Customers can purchase products on the portal such as finished compost, potting soil, t-shirts, etc. The software notifies the driver to bring the product for drop off.
• Billing Module:
  • Subscription based billing schedule determines pick up schedule and customer portal for providing credit card information.
  • Integrates with Stripe for processing payments (credit cards, ACH).
• Vehicle Tracking Module:
  • Tracks vehicles in real time.
• Employee Time Clock Module:
  • Captures employee time (clock in/out) and can export it to excel for payroll.

Cost to implement:

• Flat fee of $3500 to configure and cover administration.
• Base monthly fee of $250/month.
• Cost per active customer location 12 cents per customer per month.
• SME Consulting costs to implement estimated at $18/hour for 120 hours.
• Requires 5 android phones (one for each vehicle) and a wireless plan @ $60/month (includes the phone).

Andy Wormy is the president of Wormy Composting. He and Emma negotiated with Tom Sugar from Urban Compost Systems, Inc.on the price and timing of the project. Tom believes that the system will reduce the amount of billing resource time to 50% of their current billing time. Emma expects to reduce the amount of time she is working on activities that will be automated by the systems by 40%. Freeing up Emma and Sally's time will allow them to support additional growth. Andy expects that the system will allow them to expand their business by 20% each year over the next 4 years after implementation. The bank has indicated their current interest rate would be 4%. The current customer subscription rate is $15/month.