Today technology is EVERYWHERE. Pretty much any place we look we are probably going to see something digital or cloud based. It’s not unusual to see five year olds with iPhones either. It’s become a huge part of our world and it’s not leaving us anytime soon. There are pros and cons to it like there is everything else. However, in the business world the ROI of using the right technological tools could be HUGE.
If you haven’t seen a return on investment on the technology you are currently using, you may need to take a second look. Though, if you are just now investing in some new technology, how can you tell if it will produce a strong ROI? Here are a few ways to calculate that, and help guide you in making the smartest technological buy for your business.
First, Look at What You Have
What is your currently technology doing for you? Is it basically keeping the power on, or is constantly improving your business? Is your business in a stand still or are things moving quite smoothly? If you find that is it not enhancing your business, more than likely there are other options out there that can.
Estimate the ROI Before Purchase
If you have done your research and found that the smartest decisions is to look into other options, than it’s time to start shopping. It’s difficult to really know what you are going to get on the receiving end after you make an investment. We can’t predict the future. However, it’s a good idea to calculate a ROI before you buy something and several months after it is implemented. Below is a calculation to help with that.
ROI = net gain/cost
To illustrate, say you spend 2000 dollars and end up making 2800 because of your purchase. That means your net gain is $800.
If you are in the process of buying any type of Business Technology service, you obviously don’t for sure how much you are going to make off it. Just to try to make the best estimate you can. Think about how it is going to improve your business and that in turn will produce more money. Also consider what costs it might eliminate. This may help you come up with a more reasonable estimate. The intangibles are also important too. For example, will employees have to be taught on how to use the product? Will that cause productivity to slow down? What if in the long run employees actually can work less hour but get the same amount of work done. That can save time and money, as well as add to something else. Meaning, what can they be doing instead with the hours they are going to save?
Also, it is important to take note on how you are paying for the service or product. Is it up front, monthly, annually, etc. Even include whether or not something breaks down? How easy is the up keep? Are there high maintenance fees? It might help if you draw a timeline of how long it would take to pay off the entire buy, and what kind of costs, or savings could come up in the meantime.
Evaluate Possible Benefits
Can this new investment…
- Generate new leads?
- Bring in more revenue streams?
- Increase profits?
With the estimated time and money you can save, what else can you invest in? Would that produce a high ROI? Of course making a new purchase for your business is a lot harder than just writing a check. There is so much you need to consider. Luckily, a lot of technology out there, especially software programs like Zoho CRM have proven for many companies that they can bring in a high ROI.
Ask yourself, what is the benefit of adding one more closed deal directly attributed to the CRM and sales automation system? If it pays for the whole system… then it’s a no brainer. Do your research, and ask around. The answer will eventually become clear.
Last But Not Least
Before you purchase anything, talk with your team. Is it something you guys are all on the same page for? Will any conflicts arise if you do decide to make the purchase? Don’t just discuss with your team either. Talk with the end users too, and management if there is anyone above you. Any person that could be using the new technology should be informed before the purchase. You don’t want to create immediate chaos with bringing in a brand new system when people are just getting use to the old one. Therefore, checking with everyone beforehand shows that you care, and can increase the adoption of the product in a positive way. It gives others a chance to offer there own feedback too. Maybe there was a better option you had no clue about until you spoke with Christie from the manufacturing department.
Obviously, this entire process does not need to be used for every purchase you make. Save your energy for the large purchases that could have a huge impact on your business.