IT Is an Investment
When organizations look into buying new technology, one of the first questions that probably comes to mind for them is, “How much is that going to cost?” While this is an important question to ask, making your entire decision based on cost isn’t the most beneficial approach. Focusing on the cost of technology without considering any of the benefits doesn’t give a true picture of the investment. Instead, organizations should take a holistic approach and consider all of the benefits that new technology could provide.
Financial Planning makes a valid point: “If technology is primarily considered to be a cost, the natural impulse will be to devalue everything and achieve the lowest possible cost. Instead, it would be more advantageous to consider both the quantitative and qualitative factors of such a purchase.”
Consider All of the Benefits
When looking into new technology, it’s important to consider the benefits that it will offer your organization. Will it save employees time? Does it have the potential to eliminate inefficiencies? Will it keep your organization secure and protected against a data breach? For example, new technology often saves employees time and makes their jobs easier, which will help boost employee morale. New technology can also help accelerate your organization and keep you competitive. Even if the new technology you’re considering is expensive, you may be able to justify the investment based on the benefits.
Potential benefits that your organization should consider:
- Increasing Productivity
- Improving Efficiency
- Streamlining Workflows
- Boosting Employee Morale
- Improving Security
- Increasing Client Satisfaction
- Saving Time
- Staying Competitive
- Increasing Employee & Client Retention
ROI vs. VOI
When making a purchase for your organization, you probably determine the expected Return on Investment (ROI) to justify the purchase. Relying on ROI as the only basis for making technology investments isn’t logical, as most of the benefits of new technology cannot be directly tied back to sales. In addition to ROI, organizations should determine the expected Value on Investment (VOI).
Gartner, the world’s leading information technology research and advisory company, first introduced the concept of VOI. Gartner defined VOI as “intangible assets that contribute heavily to an organization’s performance. These intangible assets include knowledge, processes, the organizational structure, and ability to collaborate. Where ROI is the measure of the tangible benefits of a project or activity, VOI is the measure of the intangible benefits of a project or an activity. VOI includes ROI.”
By shifting from a focus on ROI to a focus on VOI, organizations have a better chance of accelerating their business and differentiating themselves from the competition. According to Gartner, “Enterprises that evaluate initiatives solely on quantifiable return on investment are missing the opportunity to reap increasing value from ‘soft’ initiatives.”
How RTI Can Help
Making a financial investment in technology is a big decision. If you’re feeling overwhelmed, give the experts at RTI a call. We will listen to your concerns, create a list of your needs, and find a technology solution that will benefit your organization.
Date Posted: 8/2/18
Date Last Updated: 6/10/19
By: RTI Marketing Team