Why you need to ensure ROI from IT
In today’s reality, for most companies the investments are heading towards technology and IT projects. This is why it is critical to understand the value of a technology investment and the benefits thereof.
What is the IT Return on Investment?
The digital era has placed greater scrutiny on delivering business value — and changed the equation for establishing and evaluating an IT project’s return on investment.
Strictly speaking, the Return on Investment is the ratio between the net profit of an investment and what it cost to implement it. It is often expressed as a percentage, to represent how much profit was made comparably to the costs.
IT projects are usually riskier, in the way that they often fail to deliver the initial business objectives. Once all the costs related to maintenance, operations, upgrades, migrations etc are paid for, very few is left for innovation. Therefore, it is more important to have a high-quality IT Strategy in place supported by a professional team to pay closer attention to their IT ROI.
Why you need to measure IT ROI?
You need ROI in the first place to know whether it is worth investing time and money in a project or technology; and afterwards to double-check if the investment was worth it and met your expectations. By looking at past investment choices and performing an ROI analysis, you can assess these decisions and make better costs projections in the future.
You want to know if you are wasting resources on technology that isn’t doing much for you: for instance, someone spending three time as much time on troubleshooting an automated email software than on producing content to be sent out. In that case scenario, technology is absorbing staff time and money, and does not give enough back.
Calculating the ROI of your IT project will also help you defend the budget, which is allocated, and potentially its extension: by showing your managers you know what you are doing, where you are spending and how well you spend, you demonstrate solid understanding of your department and justify its necessity. Finally, it also enforces accountability among project executives for the success or failure of the project.
Benefits of a Technology Investment
ROI calculations are useful for determining whether an investment will be profitable. Taking the time to assess how the investment will impact your organisation may provide even more information about how the investment fits into the organisations plans for future growth and success. Below we have listed some of the key benefits of a technology investment.
- Saving money by reducing redundancies
- Increasing employee productivity through new, innovative solutions
- Resolving security vulnerabilities that could negatively impact your business, end-user, customer, or enterprise partners
- Improving technological efficiencies by streamlining or automating processes
- Enhancing revenue streams via an extended reach of your business services or products
The first step to ensuring a return on your IT
This first step should be followed by an assessment of how the organisation is meeting established objectives, milestones, benchmarks and relevant KPI’s. The assessment should identify the technology currently in use and the gaps that exist between these current IT operations and the objectives and strategic goals outlined in the ongoing strategic plans.
An IT Return on Investment is essential and in so doing not only does it support the organisations directives, but it provides stakeholders with a sense of responsibility and willingness to further invest in Information Technology and innovations thereof.
Integrate innovation in your workplace through Information Technology (IT) and grow your business. Rito-Technologies is an IT business partner that maximises business output through technology. They enable their clients to be SMART with their IT Strategic Planning, which is guaranteed to increase your business performance and ROI.
For more information about our IT Strategic Planning, request a free assessment today or get in touch with us at info@rito-tech.co.za or call us on +27 (0)10 213 7016/7 and we will gladly assist you.