Benjamin Franklin, COI, and Testing

The famous quote “a penny saved is a penny earned” was attributed to Benjamin Franklin in the 18th century. In today’s inflationary climate, consumers and corporations alike are looking to save pennies wherever they can. And while many companies are once again putting acquisitions on hold to save money, I find it fascinating that they sometimes fail to see the cost of NOT doing anything.

I have been seeing a lot of buzz lately about a term called the “Cost of Inaction” – COI – and how its metrics can influence decisions and purchases. This recent article in Forbes magazine is a recommended read.

When it comes to buying software, most companies focus on ROI – the value generated from using the new product. COI instead focuses on how much time\money will be saved if the new software product replaces the existing one. While ROI focuses on maximizing revenue by earning pennies, COI focuses on minimizing expenses by saving pennies. According to Mr. Franklin, a penny saved from COI and a penny earned from ROI are pretty much the same.

What is the COI of having an effective testing solution in your course of action?

Transformational projects introduce significant changes to business users. For example, rationalizing an older, legacy application will achieve quantifiable licensing, support, and maintenance savings. Many such platforms are being retired and replaced by newer technologies like SAP S/4HANA and Oracle EBS. These projects invariably re-engineer critical business processes and user interfaces within the target platform. But before transformed processes can be deployed into production, they must be tested and validated by key business stakeholders. All companies have standardized testing processes, and most have testing platforms to support these efforts (yes, MS Excel is technically a testing platform). But a genuinely effective testing solution can accelerate a project’s validation phase and ensure that nothing nasty slips through the cracks into production. If testers like using their testing tool, they will test more effectively. And that leads to faster projects, better results, and lower costs.

At Panaya, a satisfied customer recently evaluated our award-winning Enterprise Test & Defect Management Platform. They are about to embark on a series of major SAP projects lasting 24 months, and key testing stakeholders clearly understood that their existing tools would become a major bottleneck. A structured POC successfully showcased the value and operational efficiencies that testers would achieve with our toolset. But ultimately, they decided to stick with what they had for the next few years. They were unwilling to link our licensing cost to the time and resources saved during testing and operational losses that go-live errors would potentially incur. The ROI was not there for them, and COI was not considered.

Contrast this with another customer who was about to embark on a global, multi-year, on-premise Oracle EBS conversion to Oracle Fusion Cloud. This initiative represented a complete re-engineering of their core business processes and user interfaces. They, too, realized that their existing Test & Defect Management platform would not scale effectively. After a successful pilot, they adopted Panaya as their central testing solution. Not only are new rollouts occurring on time, but key business stakeholders are thrilled with the results. Testing and defect logging are running efficiently, and no nasty surprises are cropping up in production. When the company starts its conversion initiative in another country, they publicize how Panaya makes it easy for the impacted business users to test and validate the new functionality. They include photos and quotes from happy business users! This company focused on the COI of using their older testing platform and how that would slow their projects, lower employee morale, and possibly incur costs post-go-live. They could have remained with their existing platform, but the COI was not there. And like Benjamin Franklin, they understood that COI is the same as ROI.