Is Your Software Driving Growth? How to Effectively Track ROI in Tech
Have you ever found yourself sinking significant resources into the latest software, only to end up questioning whether it was worth the investment? If so, you're not alone. In this digital age, it's easy to get swept up in the tide of technological advancements. But it's crucial to ensure that your tech investments are driving real, tangible growth in your business.
Why You Should Track Tech ROI
It's not enough to simply adopt the latest technology because it's 'on-trend'. In my experience, understanding the return on investment (ROI) your tech brings is key to making informed decisions about future investments. It helps you understand which tools are worth the cost and which are not pulling their weight.
Measuring Tech ROI
Measuring ROI can be a bit of a puzzle, especially when it comes to software. It's not as straightforward as calculating the profit from a product sale. However, over the years, I've developed a few strategies that work well:
- Set Clear Goals: Before investing in a new piece of software, be clear about what you hope to achieve with it. This gives you a benchmark to measure against later.
- Track Key Performance Indicators (KPIs): KPIs are quantifiable metrics that indicate whether you're reaching your goals. The specific KPIs you'll track depend on your goals. For example, if your goal is to increase productivity, you might track hours worked per project.
- Use Analytics Tools: Many software tools have built-in analytics that can help measure their impact. Take advantage of this feature to gather data for your ROI calculations.
Real-World Example: CRM Software
Let's take a Customer Relationship Management (CRM) software as an example. If you've invested in a CRM with the goal of improving customer satisfaction, some KPIs you might track include customer churn rate, Net Promoter Score (NPS), and average resolution time. By comparing these metrics before and after implementing the CRM, you can get a sense of its impact.
Wrapping Up
Investing in tech isn't about jumping on the latest trend—it's about making strategic decisions that drive growth. By setting clear goals, tracking relevant KPIs, and leveraging analytics, you can ensure that you're getting the most out of your tech investments. Remember - tech is not an expense, it's an investment, and like any investment, the returns matter.