To help companies make a business case for a new warranty system, we talked to Ashok Kartham, CEO of Mize, who has been in the warranty software industry for over 15 years. Ashok has been involved in over 100 implementations of new warranty systems and is the recipient of the Warranty Industry Pioneer award from GWSCA.
Below are some excerpts from this discussion:
Q: How can customers realize a ROI or payback from investing in a new warranty system?
AK: A new warranty system can provide a tangible return from quality improvement, supplier recovery, warranty compliance, and warranty process streamlining or automation.
Q: Can you help quantify the typical returns customers can expect?
AK: The actual return may depend on a customer’s current situation and maturity level. A company can expect to achieve up to 80-90% automation in claims processing, improve supplier recovery to over 40% of total annual warranty cost, cut the parts return cost by 70% by capturing better claim information and pictures, reduce claim costs by 5% through better warranty compliance and validations. Overall, companies can reduce warranty costs by 10% through improved product quality. If you include service contracts, customers can also see 30-50% growth in extended warranty or service plan sales.
Q: What do you see as the typical payback period?
AK: Moving from a traditional license and long implementation to a SaaS model makes it possible to have a much shorter payback period. It is reasonable to expect a payback within 6-12 months from going live with a new system.
Q: Where do people find the budget for a Warranty System?
AK: Warranty already has a budget that includes paying for warranty claims and administration. When using a subscription model, warranty managers can look at the system cost as part of the same operational budget. In may be helpful to include a system costs as part of the warranty budget rather than trying to make a case for a separate IT budget.
Q: What are some of the obstacles people face in making a case for a new warranty system?
AK: IT frequently wants to make their existing investments in ERP or other custom systems work for Warranty. Warranty managers are concerned about making a change, as it impacts all their dealers or service networks. Having a system that is easier to use and integrate with will help with managing this change.
Q: What are the next generation warranty systems like Mize Warranty doing to help improve ROI?
AK: By providing a single integrated global system for the entire warranty life-cycle, companies can reduce the cost of maintaining multiple systems and applications. Mize is offering Warranty in a Cloud model to help reduce the cost of upfront investment. We made it a lot easier to integrate with existing systems, configure instead of customization, to deliver faster ROI and payback.
Q: Finally, what do you advise companies in making their own business case?
AK: We have created an ROI model for warranty for customers. They can fill it themselves or our senior product managers can walk through. Companies can get the complimentary ROI model by contacting Mize or simply emailing to firstname.lastname@example.org. Events like GWSCA and Warranty Conference are also good venues to learn from peers in the industry.