Improving the return on IT investments may sound complex, but with a little planning and effort, it can be achieved. The key to improving or accelerating ROI is to rethink how you are defining value and prioritizing the deployment of technologies so you can leverage new and improved processes that will help you solve business problems or drive specific business outcomes. So, this is a departure from simply comparing the cost associated with deploying IT solutions vs the cost savings or benefits derived from the deployment.
We are suggesting that organizations begin to think creatively about how they define, measure, and assess the value and business impact of IT investments as opposed to painting yourself into a corner by elevating legacy methods of calculating ROI as the one and only benchmark for taking on new IT projects. ROI calculations are helpful, but should be integrated with other factors to provide a more comprehensive value picture. Do yourself a favor and add a dash of IT and business value into the equation.
Evaluate the VOI Risk Factors That Come Into Play With IT Investments
Value of Investment (VOI) takes ROI numbers one step further in helping determine the potential worth and impact of IT investments and projects. To help you determine a project’s VOI, consider the following:
- Risk factors – What could go wrong? Plan for the worst case scenario and put safeguards in place to get a good outcome. Attempt to estimate the financial and business impact of the worst case scenario.
- Impact levels – Most IT investments impact more than just the people directly working with the new technology, i.e. your customers, vendors, and other departments. Consider if the new technology will deliver positive or negative impacts on each stakeholder and user as well as the entire organization.
- Adaptation – Some investments are behind the scenes and don’t cause visible changes to the way people work. But others do; people may have to re-learn existing technology or adapt to something new entirely. Attempt to define and quantify the benefits and business impact associated with adaptation and include that within your VOI.
- Benchmarks – Where does your IT investment fall in relation to industry or company benchmarks? Utilize third party partners or research firms to gather benchmarks so you understand how much other organizations within your industry are investing in similar technologies, projects, or initiatives.
- Value vs. dollars – Many thought leaders recommend placing more emphasis on the business and financial value that the technology delivers versus the dollars that it costs to acquire and deploy the technologies. This can be achieved by making sure you have clear goals, objectives, and expectations around the impact that the technology initiative and project will have on the business, employees, or customers prior to buying the technology.
Next Step: Ask Yourself – What Problems Will This Project Solve?
Before finalizing the decision to move forward with a new IT project or initiative, consider the possible benefits. If the answer involves any of the following, the project has merit – and thus, improves VOI:
- Does it cut costs and reduce fraud/waste/abuse? Attempt to quantify the projected costs that will be saved by the new project including operational costs, and give credence to other potential benefits like cuts in wasteful spending and fraud that translate to improvements to your bottom line.
- Does it increase productivity and improve communication? Attempt to quantify collaboration and communication improvements that your work teams will realize as part of adopting the new technology, like audio and video conferencing, messaging, file sharing, etc, that ultimately will improve productivity and create an enhanced customer experience.
- Does it leverage or improve technology already in use? Define your current technology arsenal and project the impact the new technologies will have on extending the life of your networks and systems.
- Does it help define roles and accountability? Define your current roles and responsibilities and project how they will change based on the impacts of the new technology and processes born from the new project.
- Does it identify risks that can be managed accordingly? Define the risks and rewards that the new project will bring to light and establish plans to manage the processes to maximize the benefits and minimize any potential risk factors.
- Does it create new data analysis that can identify strengths and weaknesses and drive process improvements? Data tells the story, and any updated information that’s born from new projects will help illustrate the possible returns of new processes and potential pitfalls that need to be managed.
Technology Leads to Improvements and Accountability
Technology can be a catalyst that drives an organization forward. Implementing new networks and systems with advanced technology often results in increased productivity, communication, scalability, and accountability – which may help justify project costs and improve ROI and IT value analysis.
However, if your reason for giving the green light to a project is the performance of your existing infrastructure, cyber security concerns, or a government or regulatory mandate, then you may not need an attractive ROI or VOI to push the start button.
Having a solid understanding of your existing network should be the foundation of your decision. Your teams should be able to give you an indication of how your hardware and software are performing as well as the expectations of how any new technologies will change things. You must also have the right people in place to run new technologies and spearhead the changes ahead.
Get Peace of Mind for Your New Project
If you’re considering investing in a new IT project or upgrading new technology to boost network performance, we can help you determine whether or not your project has an attractive ROI and VOI. Contact us today to schedule a consultation, and our experienced professionals will help you get your project off the ground.