Previously we had discussed how to justify the purchase of a LIMS (Justifying a LIMS: The Two Q’s). In that blog we explored the Quantitative and Qualitative categories of LIMS justification focusing on organizations that were purchasing a LIMS to automate a paper-based sample and data management process. In that scenario, justifying a LIMS based on quantifiable cost savings is relatively straight forward. However, if you already have a LIMS in place, justifying the purchase of a new LIMS based on quantifiable efficiency gains and cost savings can be more challenging. Qualitative factors will become more prominent in your justification and often technological factors may be a real driving force.
Let’s start with the Quantitative category. If you recall, these are derived from time savings (i.e. efficiency gains) and hence cost savings that can be realized through the implementation and utilization of a new LIMS.
Many of these efficiency gains may have already been realized during your previous LIMS implementation so you will not be able to leverage them when determining your ROI. However, it is possible that several opportunities for efficiency gains were never implemented in your old LIMS solution so these would be available to you now. Additionally, new functionality and capabilities that are offered by modern LIMS may provide new areas for efficiency gains.
Possible sources of efficiency gains that may not have been implemented include:
Possible modern LIMS functionality driven quantitative efficiency gain sources include:
It is common that the justification for implementing a new LIMS to replace an old LIMS is made based upon technological reasons. Perhaps the old LIMS is based on an outdated technology or software platform that your company no longer supports.
Sometimes the resources who wrote your in-house developed LIMS have all retired and now no one understands the system or even the language it was written in! It is also possible that the LMS vendor has or is planning to decommission the version of LIMS you are running. It is clear then that you must implement a new LIMS.
The cost of maintaining outdated technology can be calculated and you can also estimate the costs of specialty IT resources that you might have to engage to keep your current system running. These costs, which will escalate over time, should be included into your quantitative justification.
New technology will likely also generate quantitative savings by reducing IT support costs including savings on hardware, software, and IT personnel. These savings can be quite substantive especially if you elect to implement a SaaS based LIMS.
Additionally, the new LIMS platform and architecture might offer some efficiency gains from an application administration point of view which should also be included in your quantitative justification. These include:
When developing your justification for a new LIMS when you already have a LIMS in place can often rely heavily on Qualitative factors. A modern LIMS user interface will have likely been built utilizing industry standards so the look and feel will be familiar to your users (scientists, managers, etc.). All your older, often arcane interaction mechanisms will be gone. This will dramatically improve your user satisfaction and system adoption rates which will also increase productivity and efficiency.
Collaboration also can be dramatically increased by implementing a new, modernly architected LIMS. The data structures will have been optimized and the newer system will likely have facilities to aid in information sharing. In fact, many current LIMS solutions will have special capabilities included to support information sharing over the internet while providing all the needed security mechanisms to keep your IP safe.
Increasing Innovation is a key goal in many organizations and a new LIMS can aid in the attainment of this goal. It is not uncommon for new LIMS systems to have built-in or fully integrated trending, data analysis, and even data visualization capabilities.
Figure 1: Structure Activity Relationship (SAR)
These capabilities can promote and assist the scientist in discovering data trends and relationships that were previously obscured or very difficult to derive in older LIMS.
If any of the aforementioned quantifiable measures applies, you will need to analyze how much time will be saved through automation of the manual activities. Extrapolate for a full year of activity and multiply it by the fully loaded costs (i.e. salary and benefits) of the resource generally performing the task and you will derive the yearly cost savings of the new LIMS compared to the old LIMS.
To develop your ROI you will need to develop the yearly costs of the new LIMS including software and user licensing, software support, hardware, and personnel (system administrators, IT, etc.). I generally develop this for a 3 year period. Apply the yearly cost savings to the yearly costs of the new LIMS and derive the ROI period. Most organizations target a 3 year or less ROI period for capital expenditures but check with your management for what your company is looking for.
Combine your Quantitative, Qualitative justifications and your ROI calculation into your capital appropriation request and you will shortly be replacing your old LIMS with a new, modern LIMS.
Have you gone through the process of justifying the replacement of your legacy LIMS? If so, did you use both Quantitative and Qualitative factors, and what was your ROI period? If you had to do it over again would you do anything differently?