Cost of doing nothing

A recent client meeting reminded me that we often focus on the cost of a project and its ROI yet forget the cost of doing nothing at all.

 For example, I received a request from a customer regarding the cost to add the ability for their customers to order online, check on inventory availability, pricing, etc. I determined the cost to be approximately $15,000,  in this instance, to implement the technology to allow their customers to have this "self service" capability. This may initially sound like a lot of money to spend on this type of project. But is it? They didn't feel the ROI in increased sales could justify it. However, what is the cost of doing nothing?

If a customer that does $250,000 in business with them at a margin of 20% leaves them for a competitor who has this capability, the cost of doing nothing is $50,000. Instead of four customer service personnel needed to handle the incoming calls from customers they could reduce that to three, the cost of doing nothing may be $30k to $40k plus benefits.

Whenever you determine the cost of doing any project in your company, be sure to consider the cost of doing nothing in your ROI. Many times its a forgotten and significant portion of the equation.