How to determine your tech ROI

When employees need to use a growing list of time-consuming workarounds to accomplish everyday tasks, you know your technology is outdated.

But even when it’s obvious that changes need to be made, it’s not always easy to get the buy-in you need, especially from the uppermost levels.

Overall, a strong execution plan and a business case that presents a hard ROI model on your technology is much more likely to see success and momentum.

1. Develop an effective execution plan

There are three keys to developing an effective execution plan that builds a better business case for new technology.

Select your technology wisely
The technology you choose will have a huge impact on your people and your future capabilities.

If the technology you want to implement was developed by a startup, consider that it might make hiring harder for you if you’re looking for people with specific experience with that technology. Many hundreds of thousands of people might be certified in well-established technology compared to that of startup systems, so your hiring pool is wider if you choose a more established software vendor.

Also look at how big its R&D budget is. Microsoft, Salesforce and Sage spend millions each year on R&D to advance their product capabilities and to be ahead of the curve — while other solutions may be in the waning years of their lifecycle and have little to no spend as they are merely collecting their licensing fees until the sunset of the platform.

Create your road map
Develop a technology road map that identifies your true requirements and discovers what you need to get there.

You should be zooming out at least two to three years. Understand what’s going to come next and those critical orders of operation so you can prioritize what your organization needs immediately versus the long term.

Define your team structure and operating model
Design this for the long term to reflect your digitally transforming or transformed organization.

You’ll want to account for the fact that the time you’re asking people to spend on digital transformation up front isn’t necessarily going to be time they’ll get back in the future, as digital transformation is a process of revaluation, optimization and innovation to ensure your business stays aligned with client experience expectations and demands. Your team structure and operating model should reflect this.

Identify the impact on your clients
Consumers buy from organizations that let them press the easy button — whether this is in the buying cycle, throughout the delivery of the service/product or while supporting them down the road when the dust has settled. Amazon is fast and easy and often the first place you go to when you want to buy something. Your execution plan should identify how to make your clients’ lives easier — whether it’s giving them one source of truth or making processes faster and easier.

2. Build a business case to get buy-in

Getting the buy-in and budget you need is all about building a business case — and doing so the right way. Here are some tips:

Understand who makes capital allocation decisions
Who’s making the investment decisions in your business? Is it senior leadership? The board of directors? Some combination? Once you understand who to go to, you’ll want to understand the right process as well, which leads into the next tip.

Deliver your business case in the format they are used to or want to see
Because your senior leaders or board of directors are constantly making investment decisions, they rely on the CFO to normalize the costs involved (e.g., hiring, risks, financing, big purchases, hidden costs, outlay of costs, etc.) into one consistent format.

Once you understand which terms and what format your company uses, your business case can match it so your leadership can better understand what you’re asking for and how that ask will impact the organization. Note, too, that ROI is usually looked at in terms of net present value or internal rate of return, so you’ll want to use the KPI that is used by and resonates most with leadership.

Provide hard numbers
Let leadership know the level of investment required. What’s the total investment for each year for the next five years? What are the necessary one-time investments versus the ongoing investments in services and software? And what’s the expected return on investment?