How to Achieve ROI from Your Software Investment [FLIPBOOK]
ROI in theory
Your team, and the bottom line, will tell you when you’re getting a return from your investment in multi-channel software.
In theory, measuring ROI is just maths:
Simple ROI = (Gain from investment minus Cost of investment) / (Cost of investment)
But in practice, achieving and identifying ROI involves more than just looking at numbers.
Talk to your team
While the bottom line tells the true story of return on investment, it can take a while for the figures to feed through. And the picture can be muddied by other variables.
A quick way to get a sense of whether the business is starting to feel the benefits of a new software system is to talk with those it impacts.
Is the new system allowing them to work faster and smarter? Do they list the benefits ahead of any outstanding issues? Do they feel customers are seeing the benefits?
Do they have faster access to the information they need for reporting and decision making? Has the level of manual transactions and manual data transfer reduced? Are fewer spreadsheets required for processing and reporting data?
Is the volume of issues going down or up? Is the time taken to resolve problems decreasing? Is the overall level of customer satisfaction climbing?
Is decision making easier? Is the big picture clearer? Could the biggest drivers of revenue and cost be controlled more easily? Multi-channel software makes these metrics more visible.
Look beyond the pain
Every successful software deployment has its challenges and frustrations, and follows a similar pattern. Initial enthusiasm and excitement gives way to the hard work of getting the job done.
Unexpected issues pop up, usually around technology and processes. Once these are resolved and systems go live, there’s a gradual slope upwards to a plateau of productivity.
Top three reasons why multi-channel software deployment projects overrun:
1. The initial scope of the project was extended
2. Issues within the organisation created delay
3. It took longer than expected to manage high volumes of data.
To help identify ROI, ask questions...
- What’s the increase in the number of orders we’re processing each day?
- How do picking error rates compare with the old system?
- Can we now identify our least profitable lines more easily?
And understand the answers...
- Is the change in performance due entirely to the new system, or are other factors at work?
- Are we comparing ‘like with like’ between the old and new systems?
- Are there further opportunities for time and cost savings still to be found?
Reasons for failing to fully realise the potential return on investment from multi-channel software:
- Inadequate staff training
- User resistance to change
- Not adapting operational processes to suit the new systems
- Poor integration with other systems.
Specific areas to measure for return on investment:
- Reduced inventory due to improved planning and control
- Lower after sales service costs due to more accurate processing
- Improved cash flow cycles because systems allow more effective credit control
- Faster delivery timescales, due to quicker order processing and despatch.