When considering a capital expense like new software systems, business owners often become overwhelmed by the high price tag and overlook how new tools will impact their business. It is important to remember that new technology is not a hit to a company’s bottom line. It is an investment towards the growth of your business and, like any asset, you need to consider the return that it offers. If you can show the CFO how your capital spend will end up translating into real savings or real profit down the line, your expense will become a smart acquisition that simply makes sense.
Here are 5 areas to consider that may unlock the true ROI presented by an investment in technology.
Perhaps your company prints receipts, invoices or bills of lading, only to turn around and type the information back into a separate accounting, logistics, or warehousing system. Precious time is spent manually inputting the same data into several different systems. Minutes add up to hours when employees wait for a slow, outdated system to run a search or save a document. An efficient process can help employees increase their productivity and their job satisfaction. If these scenarios apply to your company, there are quantifiable amounts of time consumed by you and your staff that could be reduced (if not eliminated entirely) by putting a new software system in place.
It is a point of frustration for employees to expend unnecessary energy on simple tasks. With the challenges of talent acquisition and increasing hiring costs, retaining a team of A-players is a top concern. The fact of the matter is that your employees are going to leave for other more forward-thinking companies if their levels of frustration reach the breaking point.
Closely related to your staff’s peace of mind is your customer satisfaction. Today’s client is used to real-time response rates. Customers do not like having to wait an additional day for your team to process requests. If you are getting recurring requests for an online system to shop your products, re-order items, or help with budgeting, this is a key indicator that customer satisfaction could be improved. Compare the cost of gaining new customers against the effect of losing them; efficiency is crucial for customer satisfaction and retention.
There could be valuable insights hiding among all the data you are collecting about your business. The opportunity costs of not modernizing your processes could be as impactful as missing sales trends, selling opportunities, and gained efficiencies. When you do not outline goals for growth and a plan for how to reach those goals based on data from your day to day business, you run the risk of missing out on critical information that may change your strategy of execution.
Single Point of Failure
Perhaps the biggest risk of not having a well-designed system is that the business often relies on key people that hold all the information about a process or customer in their heads. These single points of failure represent a huge risk: by definition, they are the only thing standing between you and everything going wrong. It is tough to reduce this risk to a monetary value – instead, ask yourself “what if.” What if that person quit? What if that system failed? What if I lost all those records? How would that impact my business financially?
If you can relate to one of more of these areas at your company, you may be well overdue for a new system. Consider the operational challenges that your business is looking to overcome, and picture yourself where you want to be five years down the road. The value that the software will bring to your company will continue to add up over the years as your company is able to expand and grow into new markets.