The concept of Return on Investment is neither complicated nor new, but when it comes to enterprise software implementations, there is more to it than meets the eye. Sure, you could do a back-of-a-napkin calculation and quickly appreciate the worth of spending $100k on software if it delivers $150k of benefits. But as always, the devil is in the detail, and with software, there are plenty of details which could skew your calculation.
At the core of what I’m pointing out is that purchasing and installing software isn’t the same thing as purchasing and installing a new machine on the factory floor. Software is about more than software. That may sound somewhat confusing, logically speaking, but bear with me.
It’s something I’ve noticed while working with window and door industry businesses over the past 20 years. There is a simple formula for adding a person or a machine or whatever item to the business, and if the calculation bears out, you bank the return.
Sure, you might run into snags such as insufficiently trained machine operators or perhaps an underperforming new hire, but these issues are typically readily identified and resolved.
What’s different with enterprise software?
Where enterprise software differs is that it is or should be systemic. This is particularly the case when the software is intended as a transformational effort for your business (and for the past several years, we’ve seen plenty of talk around ‘Digital Transformation’. In fact those businesses which had digitally transformed found themselves in a better position to cope with the pandemic over the past year).
The systemic nature of enterprise software means you will be doing things quite differently from a broad operational point of view, and even from a narrow individual point of view. In other words, how you make a window and door could very well change quite dramatically, and along with it, the daily actions, and tasks of individual workers.
You don’t operate in a vacuum either, and the systemic nature of enterprise software means there are implications for your suppliers and customers, too.
If done right, these are among the impacts you’d be looking for, because that, in part, is what makes good software transformational.
This gets to the crux of not only calculating, but (more importantly by far) actually achieving the desired Return on Investment from your software project. Just as the impact of good software well implemented should be systemic, the calculation should be too.
Here comes the but…
There’s a big note here, too. Well implemented software is great, a big thumbs up. But even perfectly implemented software, from a technical point of view, will only do part of the job.
And here’s where we get to the heart of the issue. Assume a perfect technical implementation; it is only now that the real work begins. Achieving transformational change and moving down the path to value depends on complete and sincere commitment from everyone within the business, and most notably, with the ‘tone from the top’. You cannot delegate responsibility for success, because when that happens, you’re potentially compromising the neat calculation.
Educating and training your people must be part and parcel of the implementation – and reinforcement is important, because nobody likes to change even when it’s obviously for the better.
Partners and customers, too, must be brought along on the journey, particularly where your improved way of doing things has a real or potential impact, or a real or potential benefit to the way they do things.
When done right
Enterprise software can have positive impacts and improvements on your business. But don’t be fooled into a ‘simple’ calculation of the Return on Investment. Instead, consider all the factors, the full workflows and processes, your people and your partners. Maintain a clear view of the desired outcomes – efficiency, speed to market, increased production – all these and more are on the table.
And they can show up on the books, too. But it takes a pervasive effort to turn plans into reality.
Want to know more about Return on Investment from Soft Tech V6 software? We’ve delivered great results for customers all over the world. Get in touch and I’d be happy to discuss how we can help you.
