Are traditional methods of calculating ROI holding you back from adopting new technology? We are glad to see it isn’t just us at Trintech who have realized that more often than not, the way you calculate your ROI may be inhibiting your company’s potential for future growth. This past year, SSON.com has expressed its view on how organizations are consistently misled on adopting new technology due to their “traditional ROI calculations.”
This article, which can be seen in full at the end of this blog, identifies that the struggle with identifying the business value of a technology investment lies in the issue that value-added outputs are increasingly intangible in today’s organizations. Although these intangible benefits may be hard to pinpoint, they are in most cases, more valuable than the hard benefits.
In a recent study, Forrester Research’s Andrew Bartels came to the conclusion that “measuring ROI on the basis of headcount and operating cost savings as a result of automation was in fact a barrier for growth.” This highlights a difficult case for finance executives, as they are known for invariably looking for actual tangible data to justify an investment.
So, what is the modern approach to calculating ROI? Evaluating the ROI of new technologies in a more holistic, enterprise-wide approach will allow you to focus more on the soft benefits of an investment. Efficiency, Effectiveness and Impact are three benefits that should be taken in account, as they will highlight the soft benefits often forgotten. Although there is no set of rules or regulations on how to calculate your company’s ROI, one thing is certain and that is, “technology today is a core enabler of performance tomorrow.” Don’t let a way of the past inhibit the future of your company.
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