Return on Investment (ROI)

Can you really measure ROI?

Return on Investment (ROI) is the traditional method of measuring business value. A method used by finance departments everywhere (e.g. you spend $100 on software and get $1,000 in return). It works well for simplistic processes that have a direct cause and effect such as automating a process that used to be manual or reducing the travel costs associated with a meeting.

Measuring costs related to productivity

The easiest and quickest way to measure ROI is calculating the anticipated savings from lost employee productivity. People drive business. They drive the growth of the company. The more efficient and effective they are in their daily jobs, the higher the return is on your digital workplace.

There’s no shortage of office distractions that can take employees away from the task at hand. Even if you make fractional improvements in these areas, your digital workplace will more than pay for itself in just a matter of months. 

IDC - Productivity losses

IDC is a world leading analyst firm who conduct market intelligence research for the information technology, telecommunications, and consumer technology markets. The following table illustrates the top work-related activities which hamper knowledge worker productivity in most organizations. It also highlights the cost to your business due to lost employee productivity.

Productivity Losses Per Week

13.5 hours

9 hours

8 hours

6.5 hours

4 hours

Organizing & searching  email inboxes

Searching for corporate information

Analyzing & validating information

Communicating & meeting with teams

Publishing & editing information

$21K/year

$14K/year

$13K/year

$10K/year

$6K/year

Source: IDC 

Determining the total cost of ownership

The business value of the digital workplace goes well beyond creating operational efficiencies. You can find additional hard dollar savings in both hardware and software but first, you need to understand your Total Cost of Ownership (TCO). IT costs continue to be the dominant metric for CIOs. The initial expense of setting up and acquiring technology, as well as the projected incremental cost to maintain it, are critical measures of success and provide a basis for calculating a return on the proposed improvements. Be sure to weigh the merits of a hosted solution and subscription-based license, which spreads out the cost of ownership over time, against the more expensive upfront investment required by on-premises platforms.

Comparing costs

On-premises platforms are typically associated with large, complex, customized deployments with many software and hardware dependencies, along with high operational costs. Consider a typical SharePoint implementation, where the IT team can be tied up for months or even years managing the complexity of a migration. Looking purely at licenses can mask the vast majority of costs associated with running these solutions. The real cost of ownership can include hardware, third-party software, and vendors to make it all work -- plus internal staff to manage and maintain it. Osterman projects this cost at $46.54/user/month for SharePoint: $27.28 for licenses and hardware, plus $19.26 for each staff member to manage it.

Cloud applications like our solutions deliver 1.7 times more return on investment than on-premises ones, according to Nucleus Research. They require 40% less consulting, cost 25% less in support, and 4 out of 5 deployments deliver increasing benefits over time.


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