ROI is based on the analysis of differential cash flows. In the case of remote data acquisition and aggregation systems for fuel tank operators, it is based on calculating the cost of acquiring and aggregating the data manually and compared to the total cost of owning, maintaining and operating an automated data acquisition and aggregation system.
F U E L I N G B E T T E R D E C I S I O N S
Calculating the Return on
Investment for Automated Remote
Data Acquisition and Aggregation
Systems
Oscar Rodriguez, Chief Financial Of? cerWorldTelemetry, Inc.
W H I T E P A P E R
ing a tank gauge and writing down a reading. Abstract This task is often performed several times Return on Investment is calculated by a day, plus additional readings if a delivery comparing the cash ? ows of alternative de- to the tank in question takes place. The cost cisions. More simply put, ROI is based on of the tank level readings (Cl) is therefore the analysis of differential cash ? ows. In the time (t) it takes to complete each read-the case of remote data acquisition and ag- ing multiplied by the associated cost - salary gregation systems for fuel tank operators, and bene? ts - of the individual that takes the it is based on calculating the cost of ac- readings (Sl), further multiplied by the num-quiring and aggregating the data manually ber of readings (n) and again multiplied by and compared to the total cost of owning, the number of sites (N) as the same activity is maintaining and operating an automated repeated throughout.page data acquisition and aggregation system. 1 ROI is essentially the comparison of costs Cl = t*Sl*n*Nassociated with a labor-intensive process versus the costs associated with an auto- At speci? ed intervals, the tank level data must mated process, and determining how long be compiled and transmitted. Depending on it takes this cost difference to account for the type of facility, this occurs once a week the investment in the automated system. up to two or three times a day. This compila-tion and transmission again consumes some time, the cost of which must be calculated in
Site Level Data a similar way as the level readings. In addi-tion, there may be costs associated with the At each of a company's remote sites, there transmission of this data that should also be are multiple activities that, taken individually, taken into account.do not seem to add up to much. However, The Risk of Human Errorwhen spread over dozens of sites, the total expenditure mounts quickly. Each time there is human intervention in the
Calculating the Cost acquisition, compilation and transmission of data, the chances of error increase exponen-Tank levels are measured manually - either tially. In addition, when depending on per-by "sticking" a tank or by visually inspect- sonnel to complete these tasks, there is a risk F U E L I N G B E T T E R D E C I S I O N S
of delayed or missed transmissions. The a reduction in service trips. These associated result of these problems is that the data savings go directly to the bottom line and are a received at the other end will frequently fundamental component of the ROI calculation.be either erroneous or outdated; therefore, decisions based on it will also be prone to Environmental Risk Mitigationerrors. Another very important reason for companies
Automated data acquisition and aggrega- to aggregate data at a centralized location is en-
tion systems do each of these tasks without vironmental compliance. Compliance is no lon-
human intervention, hence greatly reduc- ger a "good neighbor" type of activity; it is an
ing or eliminating data errors and freeing absolute business requirement. Non-compliance
up resources for other activities or elimi- can drive companies out of business. As envi-
nating the need for the resource altogether. ronmental laws and regulations have become
This ability to reduce or redeploy resourc- stricter and penalties and other liabilities for
es is incremental cash ? ow. non compliance have increased, executives and corporate risk management departments have Optimal Performance become less inclined to delegate and entrust compliance obligations to ? eld personnel that is There are multiple reasons for companies frequently very removed from their oversight. to aggregate site speci? c fuel tank data at a centralized location. One desire is to attempt There is a signi? cant amount of recordkeep-to optimize the logistics of fuel distribution ing associated with environmental compliance to multiple sites. This is true to both vendors that needs to take place at the site level. Risk and buyers of fuel. Both need to know what management departments need t... [download for more]
