25 Aug Are you getting your money’s worth? Measuring system ROI.
Are you getting your money’s worth? Measuring system ROI.
You know how much you’ve spent; but do you know how much you’ve saved or the additional revenue you’ve generated?
What we pay for business systems is easy to calculate, but the upside they provide is not always so easy to put a number on. Evaluating the ROI of your systems software is not the most straight-forward process and does involve a bit of thinking time.
But the value of doing it is significant – it helps you to understand where your system is driving efficiency and where the business may be sitting on untapped opportunities for more cost-savings and bottom line benefits.
For many SMEs in New Zealand – running at full speed across a range of functions – the time involved in strategically calculating your ROI can feel like a ‘nice to have’ and ‘impossible to find’. If you’re in that boat, then we hope the following ROI planning starters are helpful.
Process change evaluation:
Depending on the type of business you are in, your business systems software will have streamlined or automated a number of processes – after all, it is one of the primary objectives of implementation. Consider ordering, inventory, production quality, reporting – financial and other regular reports – and all other processes which act as the glue of your business. What metrics can you put around these in terms of time, accuracy, resource requirements and other factors?
The human factor:
Looking back on your business before the implementation, what kind of efficiencies have you achieved? For example, the time involved and accuracy of functions performed; the number of functions individual staff manage; more time available for revenue generating activity; have you been able to grow without adding part or full-time employees to the payroll? What metrics can you put around these factors?
The power of real-time:
Timely information is a big factor in efficiency, growth and in mitigating the risk of waste and lost opportunities. Consider the reporting you now have in place and the business decisions it has enabled you to make. What have been the revenue upsides and the cost savings?
Customer and client management:
In most sectors, customers have choice and keeping them loyal to your business takes work. How valuable has your systems software been in securing and supporting customer relationships; exceeding expectations and driving referrals and new business acquisition? Compare the new and old way of doing business and put some metrics to the business maintained and won since implementation.
Not an exhaustive list, but certainly some key thought starters to build a list of metrics on which to measure the ROI of your business systems software. Some of the most successful businesses have their finger on the pulse of their ROI to drive greater efficiencies and leverage previously unseen and untapped opportunities.