How to Evaluate Soft Cost Reduction Strategies


Executing meaningful soft cost reductions is a strategy game.

Over the last five years, new companies serving the solar industry have brought software platforms and hardware products to market claiming they will help achieve soft cost reductions. Solar contractors should look carefully at these offerings and ask themselves:

  1. In my market dynamic, will this product/service actually lower my soft costs, or just push it somewhere else within my company or project process?
  2. What objective data or 3rd party study backs up the claims of the product/service?
  3. What guarantee exists if I am not satisfied with the results?
  4. How can I most successfully integrate the product/service into my operations in order to ensure it will successfully achieve the soft cost reductions I need to achieve?

By viewing products and solutions in holistic context of company operations, contractors can better evaluate the true results of soft cost reduction claims.

Engaging employees in activities that help source and solve organizational, process, and customer experience challenges can yield even greater results. 

Remember, sometimes an investment in a product or service will result in a much higher return somewhere else. Without looking at your company as a whole system, you might miss a crucial opportunity for much greater soft cost reductions. For example, some integrated racking products might be more expensive upfront, but will they actually produce significant savings in installation. Engage solution providers with an open mind and ask questions that move beyond point solutions (lowering customer acquisition costs- which may RAISE other soft costs downstream in your operations) and speak to lowering TOTAL soft costs.


Photo: "Puzzle" by Olga Berrios is licensed under CC BY 2.0

Posted on October 15, 2014 and filed under operations.