HUB TechMinutes

Business technology news, tips and events.

HUB TechMinutes

Better business through better information.
2 minutes reading time (456 words)

Tip of the Week: Determining the Return on Your IT Investment

Tip of the Week: Determining the Return on Your IT Investment

As time passes, your business will need to be able to grow and develop its use of technology through thoughtful investments and improvements. To do so, it helps to calculate the returns you can anticipate seeing from these investments. For this week’s tip, we’ll go over how to do so.

How Your IT Investments Can Benefit You

There are a few ways that the money you put into your technology can pay for itself.

  • Increased Revenue - If your investment results in the ability to offer something new to your business’ clients, you’ve opened yourself up to increased cash flow through a new revenue stream.
  • Cost Reduction - Some present investments will help you shave back your costs in the future. For instance, upgrading your technology can help reduce your maintenance needs, reducing your costs in that regard.
  • Capital Reduction - You also have the option of reducing your capital expenses related to technology. Finding more cost-efficient options for your IT needs will allow you to do this.
  • Cost Avoidance - Of course, if you have the option to eliminate a cost entirely, why wouldn’t you? Eliminating bottlenecks, downtime, and other financial drains through improved technology solutions are an effective way of doing so.
  • Capital Avoidance - It’s hard to get more efficient than eliminating one of your costs entirely. Any investment that you make that allows you to sidestep other costs falls under this category.

You also need to have a comprehensive appreciation for the basics of how your network is constructed, as well as why you are making an investment in the first place. Once you do, you will be better equipped to calculate your returns.

The equation to calculate the return on investment for your technology is the same as it would be for any investment:

ROI = (Benefit)/Cost

That’s it. You 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.

Other Considerations

You should also keep a few other qualifications in mind as you plan your next IT investments.

  • Who in your organization will be affected by the new investment and the changes that result from it? How will these changes impact them?
  • Are you focused more on seeing an ROI that’s financially quantifiable, or is the value in your investment more accurately described in less tangible, qualifiable terms?
  • What - if anything - could potentially go wrong during the implementation of your IT improvements?

HUB Technology Solutions can help you decide what your best moves are concerning your information technology. Reach out to us at (204) 772-8822 to learn more.

Why You Shouldn't Ask Just Anyone for Tech Advice
Backup Your Data to Protect Your Business

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Guest
Friday, August 23, 2019

Captcha Image

Get Updates On Our New Blog Posts!

Book your free introductory consultation now.

Let's Talk

Happy Clients

Don't Miss Our Next Newsletter!

Subscribe to our free monthly newsletter! It's packed with valuable information, useful tips, and important security alerts.
* indicates required
Your email address is secure with us - we never share our subscriber information.

HUB Tech Minutes

27 August 2019
A world without any technical issues bogging down your organization is rather picturesque, wouldn’t you agree? The issue here is that it’s often not possible for businesses that struggle with payment to make ends meet--particularly in regard to techn...
26 August 2019
Small businesses have been leaning on cloud computing for a few years now as it presents a lot of options to compete without having to make huge--often unavailable--capital investments in their information systems. Public cloud computing can provide ...
22 August 2019
Many businesses have turned to the cloud for their next big technology rollout, but there’s much more that goes into this choice than giving the green light to whoever is implementing it. First, you’ll need to make a choice; do you implement a public...