Deciding to invest in a new IT solution is a big decision for any business, especially when that solution is poised to change the way processes are carried out across the organization.
But knowing the ROI is worth it can help make enacting that change easier and—during the pitch and budgeting process—get stakeholders on board.
So how do you get a higher ROI on IT investments?
First, let’s take a look at how to assess whether or not an investment is right for your business at this time.
When to Invest in IT
First, it’s important to ask yourself why you’re considering the solution in question. Is your current infrastructure failing? Have your current systems and/or processes aged out or do they no longer make sense for your organization?
Next, consider how the IT solution could make your business better. Will it help reduce time-to-market? Will it improve interdepartmental communication?
Once you have a solid understanding of why your business is ready to take the leap, it’s crucial you understand how your existing systems, processes, and networks function. That’s because, when it comes to ROI, you’ll need to benchmark your new and improved performance against your current performance.
Consult your IT team, or whomever manages systems and operations for your organization. Ban the jargon so you can ensure you have a solid grasp of the hardware and software currently being utilized, and how processes work so that you can document, and later review, them to ensure optimal performance.
Last but not least, ensure you have the right people for the job. Implementing a new IT solution can be tricky, so—whether you’ll be doing self-implementation, vendor services implementation, or third-party implementation—it’s important you know who will be taking the lead on the project, as well as who the boots-on-the-ground team will be.
Achieving a Higher ROI
Once you know moving forward is the right move, how do you prove ROI and eventually achieve higher ROI?
According to Enfocus Solutions, the financial benefits of IT investments typically fall into five categories:
- Revenue Enhancement: E.g. If the new solution can help you with upsell and cross-sell opportunities.
- Cost Reduction: Reducing (but not necessarily eliminating) costs, like lowering maintenance costs with better technology.
- Cost Avoidance: Eliminating costs completely, potentially by reducing errors, etc.
- Capital Reduction: Reducing capital expenses, like reducing storage and server capacity costs.
- Capital Avoidance: Much like cost avoidance, this would help you get rid of a capital expense entirely (like moving from on-premises to cloud storage).
Ultimately, investing in the right IT solution can improve more than just your bottom line, but all of the following perks affect it positively:
- Improved data analysis can help identify strengths and weaknesses in your processes, making your organization more efficient
- Interdepartmental communication can be drastically improved, meaning your teams are quicker and more effective
- It can help reduce mistakes (operator errors, incompatible bundling, etc.)
- It can quicken your processes (ensuring quotes get out in a timely manner, etc.)
- Making your teams and processes more effective makes for happier customers!
Don’t just invest in the newest and shiniest IT solution, do your due diligence, see what your organization needs, and understand your current processes so you can see how that new solution can improve them. Calculate the ROI of the new investment so that you can continue to improve it year-after-year and enjoy the benefits of improved systems, more effective teams, and happier customers!