You’ve got to spend money to make money…
While clearly over-used and simplistic, the cliché rings true. Companies need to invest in order to build a more successful company, but they need to invest in projects that produce positive payback and high business value. Unfortunately, determining that value can be tricky. This is where ROI comes in. Return on investment attempts to calculate the actual dollar-value of upcoming expenses, e.g. training, company initiatives, and software.
Why is ROI important?
- Turns the subjective into the objective. You might be convinced that a new project is necessary based on gut feeling or opinion, but concrete figures defending your position make your case stronger.
- Focuses on tangible benefits. While there are several intangible benefits for projects like increased customer satisfaction or happier employees that are very important, they are hard to quantify. ROI specifically concentrates on quantifiable benefits.
- Builds stakeholder support. If a department knows they need a specific type of software, they can win stakeholder permission by showing how much money the company will gain with the investment.
- Uncover additional benefits. If you are looking toward software or a project to accomplish specific tasks, stepping back and doing a full ROI can uncover other areas you were previously unaware of that might benefit the company.
- Prioritize projects. Budgets almost always mean project competition. ROI helps us determine what projects have priority. Financially, it makes sense to prioritize projects with the highest ROI.
Calculating the ROI of Software Investment
Software is an incredibly important investment for most businesses, but the stakes of software investment can be high: the initial investment, time and money for configuration and deployment, staff training, and the risk that it might not improve your existing process.
On the flipside, highly competitive business environments mean companies must innovate. Software can offer incredible competitive advantages. IT software, business management software, sales software… all of these offer the tantalizing opportunity for better internal processes, and companies with the best processes will win in most industries.
Because both the risk and the reward are high, companies should turn to ROI calculations to determine whether a software purchase makes financial sense, to compare the effectiveness of different software investments, or to justify a specific purchase.
In order to help companies understand the value of CPQ, we’ve created a CPQ ROI calculator using the most-recent statistics about CPQ and non-CPQ enabled companies. Our calculator estimates the return on investment your company can realize by incorporating CPQ software into your internal business processes, and we closely examine how and where you will see the return.
Our free ROI calculator asks for 6 different inputs on your company’s sales and management processes in order to provide the best, customized estimate. Along with our ROI calculation, you will receive a free guide that walks you through the calculation and value assessment. The calculation and guide will help you understand if—and how—CPQ can improve your bottom line, and will provide you ammunition if you need executive or stakeholder approval to acquire CPQ software.
Visit our ROI Calculator and discover the value of CPQ in your organization.