As you company grows, you will need to invest a good deal of the revenue that you take in to keep operations from falling into complacency. In order to get a good idea what investments would be most advantageous, doing a proactive ROI analysis of project you plan to undertake can put your business in a position to be able to properly anticipate every aspect of a successful project. Let’s take a look at the variables of an ROI analysis.
The first thing you will want to do is gather the receipts and create a detailed cost analysis of the project, breaking the costs down into separate categories. The category breakdown will be advantageous when you start to assess the different costs, and how those investments make a huge difference when trying to determine the viability of a project.
To configure this, you will want to start with the single-project costs. These include:
Once the costs have been firmly reported, it is time to start looking at the potential benefits of the proposed projects.
Since we are only looking at calculating the ROI of a particular investment, we should talk about how your IT investments may benefit your company. They include:
The equation to calculate the return on investment for your technology is the same as it would be for any other investment:
All you need to do is take your total benefit (calculated by subtracting your costs from your ultimate gains) and divide it by your total costs. This gives you a simple metric that makes your benefits easy to understand, and thereby enables you to make comparisons much more easily.
You should also keep a few other qualifications in mind as you plan your next IT investments.
Central Technology Solutions can help you decide what your best moves are concerning your information technology. Reach out to us at 1-844-237-4300 to learn more.