When we think about the success of a company, several factors are relevant and should be properly considered. Among them, the ROI (Return on Investment) in IT, should be considered as one of the most important. This is because this metric is powerful for evaluating the results obtained by the company’s Information Technology sector.
Through the data obtained by THE ROI in IT, a company can more efficiently measure the results of its initiatives, which allows you to decide whether the investment undertaken in each action is useful or not, applying its resources more efficiently.
Do you intend to plan your IT investments optimally? Read the article and find out how to evaluate return on investment in this sector!
IT ROI concept
Since the purpose of the Return On Investment is to determine the results that a given application may bring to the company, the calculation needs to take into account both the costs of the business and the profits that the investment can bring to it. In the context of IT, this information can be achieved through the following questions:
- on average, how many IT failures and problems occur per month?
- how much time is usually spent on your resolution?
- what is the average it spend per hour to solve these problems?
- what is the total value of the sum of other costs related to IT operation?
APPLICATION OF RETURN ON INVESTIMENT in IT
By analyzing this data, the management team will be able to measure the average cost that IT failures generate for the company. In possession of this data, all the management team must do to identify the ROI in IT is to deduct the profit value by investing the capital needed for its implementation. Then the result should then be divided by the capital needed for the implementation of the investment.
ROI = profit delivered by the investment – capital needed for implementation of the investment/capital required for the implementation of the investment.
Let’s say that by investing R$ 100,000 in an automation project, a company obtained a return of R$ 300,000. Therefore, the formula will be applied as follows:
ROI = R$ 400,000 – R$ 100,000 / R$ 100,000 = 3
Therefore, the investment in automation optimized in 3 times the results of the company, multiplying this result by 100, we reached the percentage value of 300% optimization.
Finally, it is worth noting that, to identify profit delivered by the investment, the management team needs to deduct the costs caused by failures by return on investment.
Areas where IT ROI is applied
Given its characteristics, IT ROI can be used to evaluate the outcome of various investments, such as some examples we have put together below.
Consolidation of employees
Since engaged and qualified employees are critical to a company’s success, we can consider its hiring as an investment. Through ROI, managers can verify the results delivered by them, allowing them to observe whether they have delivered performance levels that justify their hiring.
Today, data protection and storage is one of the most critical tasks a company needs to perform. In this context, when calculating return on investment, managers can verify that the solution they are using is the most profitable, or if another option, such as cloud computing, would be more profitable for the company.
Tools that optimize a company’s productivity levels are always welcome! In this context, tailor-made software, which is developed from its initial concept to increase a company’s efficiency, can be seen as one of the most useful and effective solutions on the market.
Through ROI, the management team can evaluate how tailored software has increased company productivity and the impact of this optimization on its results.
In a tight market, companies should use their resources as intelligently as possible. Since Return on Investments is a metric that facilitates this task, it should be widely used!
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