Calculating ROI on an Aircraft Management and Communications Solution: 4 Things to Consider

May 10, 2019

One of the most important aspects of emerging aviation technology is that it's given operators more choices than ever when it comes to flight management solutions. Where once the only available offerings were cumbersome and wildly expensive legacy systems for commercial airlines, the advent of smart tech and devices and software such as Spidertracks has enabled smaller businesses to tailor solutions for their specific needs.

In our eBook ‘Reliable Communications with Your Aviation Crew — Anywhere, Anytime,’ we outlined four tiers of aviation communications — radio, higher-level (advanced systems such as ACARS), Global Cross-Channel Communication (GC3), and non-aviation-specific workarounds — and discussed how operators can choose the right one for their businesses.

But how do you know whether or not you’re getting the most bang for your buck? In this post, we’ll build on that ebook by pinpointing a few things you should consider when you’re calculating ROI on any new aircraft management and communications solution. Let’s get started.

What are your current costs with your existing system?

When you’re thinking about switching to a new communications solution, the first step in determining ROI is, of course, figuring out how much your existing system costs you. Take into account any recurring monthly costs, as well as future hardware and software upgrades.

You should also consider opportunity cost — aka the money and opportunities you’re losing out on by not using a different solution. What’s missing in your current system? Are you able to effectively communicate with your assets even when they’re in remote locations? If you need to reroute an aircraft but you can’t get in touch, how much will it cost your business for that aircraft to make two trips?

What important benefits does a new system offer that'll help you run your business better?

Implementing a complementary communications system can be complex, and it’s important to understand the problem or problems you’re actually trying to solve and whether or not the new system is capable of doing that for you. Spidertracks, for example, offers unique services that other aircraft tracking solutions don’t — services such as Global Cross-Channel Communication (GC3) (which automatically chooses the right channel through which to send messages and ensures your communications get through anywhere in the world) and Spidertxt 2.0 (which can vastly increase the overall safety and efficiency of your operations).

What does your proposed new solution mean for your business in terms of compliance? How do the hardware and software compare to what you’re already working with? Will your new system put you in a better position to succeed moving forward?

Look at these aspects of your new system as added value, and take that into consideration when you’re determining ROI.

Will you save money - in the short-term and/or long-term - by switching to a new system?

When you’re determining whether or not you’ll save money by implementing a complementary communications system, you can’t just look at direct cost; you have to dive into opportunity cost, as well. Here are some questions you should ask yourself:

  • Are there any direct cost savings associated with your new system (i.e. lower monthly or yearly cost, more affordable hardware)? Take into account any existing and standalone expenses that might be absorbed into it.
  • Will switching save you money in the long run?
  • If the answer is no, does your new option offer benefits that merit the extra expenditure?

What are the immediate costs of implementing your proposed new system and the potential risks associated with it?

What’s involved in implementing your new system? What kind of work is involved, and how long will it take? Is it easy for yourself and your pilots and employees to learn, and how long will it take to bring them up to speed?

What are the direct costs of this implementation in terms of project management and contingency? What, if any, are your new system’s major risks and drawbacks?

Take the answers to these questions into account when you’re calculating ROI.

Wrapping up

In aviation, radio is king for a reason — but it can be flawed if you’re trying to send a message over long distances, so it’s critical that your operation incorporate complementary technology that’s easy to adopt and to use.

There are a lot of important factors to consider when it comes to choosing that technology. Opportunity cost is a big one; what are the limitations of your current system, and what are you missing out on as a result of those limitations? It’s imperative that your solution keeps your pilots safe, allows you to easily communicate with them, and sets your business up for success on the financial front.

To learn more about how Spidertracks does just that, take a demo now.

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