Rule # 3 – Save Money On Your Computer System – Drive Implementation with ROI

For years, businesses have used return on investment (ROI) as a decision-making tool. By computing ROI as a percent, businesses could (theoretically) compare projects. A project with a ROI of 10% was better than a project with ROI of 9.75%.
I remember a number of formats for calculating ROI on technology implementation projects. Most began with the assumption that employees could be eliminated, hours could be reduced, costs could be eliminated. In the 1990s, many software companies sold software exclusively with ROI calculations.
The problem was that the business rarely received the benefits that had been included in the ROI calculation. Over time, we began to realize that many of the benefits were “intangible” and we stopped talking about ROI.
That’s unfortunate.
Not because ROI is a good decision-making tool; it simply isn’t in many situations. ROI is an ideal implementation tool.
Because it focuses the implementation in the areas where it is most likely to produce a tangible return for the company, and it keeps the focus off areas that don’t need focus.
Example: A company estimates that it can save salespeople 8 hours per week by increasing inventory accuracy and eliminating manual calculations that they are currently doing. In order to do this, the company needs to install new inventory and order entry software. Without a focus on ROI, the installation often degenerates to an attempt to recreate the old software. By focusing on ROI, the implementation can be designed to focus on (a) inventory accuracy, (b) eliminating calculations, and (c) [MOST IMPORTANTLY] creating the management structure that will assure that the salespeople use the hours they save to generate new business.
It is (c) that generates the return for the business–the increase in sales. Without a focus on ROI, many implementations degenerate into trying to “make something work like the old system worked.”
Try it. You’ll like it!