ROI Calculator

ROI Calculator

& TIPS FOR MAXIMISING

SYSTEM PROJECT ROI

The Excel ROI (Return On Investment) calculator suitable for IT system project proposals is available for free download (29KB):

TIPS TO IMPROVE PROJECT ROI

1. Have a process for identifying and measuring your software project benefits – from initial project approval, selection, implementation through to post implementation. Regular monitoring and measuring will flag up issues, enabling you to take action accordingly. 2. Implementing a new software system, is much more than just buying the software. Projects often include additional hardware, databases, consultancy, training and labour costs. All foreseeable project components should be recognised before the project is approved and costs for these included within any ROI calculations. Whilst the initial ROI will be more realistic, you’ll have a more accurate base point to measure and monitor ROI maximisation actions. 3. Do not make excessive cuts in the project budget, which would increase ROI on paper, but in practice may severely hamper the success of the project later on. For example, if the project team would be able to work much more efficiently with the latest high-spec PC’s and large monitors – then provide them, as the increased output will than outweigh the costs saved by using inferior equipment. 4. Ensure your technology is compatible and consistent. If the new software requires new or upgraded hardware, or database etc., then provide it. There is no point in trying to run new software on hardware that cannot cope. 5. Re-engineer your processes, to work with your business and to get the best out of the new software. If you have existing processes that are poor, implementing new software is not going to have much impact unless you revise the processes accordingly. Spending time re-engineering processes can be time very well spent. 6. Ensure your project team and software users have good training. This means paying for training. Either buy from the vendor, or set up a train-the-trainer scheme and do it yourself, plus have regular on-going training and a programme to support users. Don’t just rely on manuals or online help. The better the training, the quicker your users will become competent and expert with your new software, and consequently the better your ROI will be. 7. Get the right people involved. Sometimes, extra training is just not enough. If this is the case (and you need new skills / more knowledge), then bring in additional people, even if it is only for a short period of time. 8. Thoroughly cleanse your data and ensure you only have good quality data in your new system. Otherwise, no matter what the software is, it’ll still just be ‘garbage in - garbage out’. 9. Focus on the big potential gains from implementing new software, such as below. Then, identify and use relevant metrics to monitor improvements. o Reporting - preparing, printing and issuing regular reports can be very labour intensive. With new software, time spent on reporting can be drastically reduced, enabling those employees involved to be re-allocated to work that is more important. o Productivity – the time it takes to carry out the same specific tasks, before and after implementation. o Removal of manual / human errors within the present system. o Reduced duplication of information and tasks. o Any routine process in the existing system that consumes a lot time, which could be automated or human involvement substantially reduced, within the new system. 10. Ensure you, your project team, all users and the organisation as a whole, adopt the new software solution. This means, that everyone supports the project and actively chases the planned benefits, both during and after the implementation. If necessary, spend time convincing any doubters to get behind the project. For more IT project proposal information visit: Reasons for changing software / Project scope checklist / IT project proposal / Proposal format / Basic ROI calculation / ROI calculator and tips for maximising systems project ROI / Hidden costs of acquiring software / Project budget template and tips for improving IT software budgets / Proposal evaluation sheet