Can You Measure The Return on Investment for Technology

If you are smart, you do not just want to invest in technology without finding out whether it is giving anything back to the business. Well, the truth is that technology is a cost and the truth is that it does give returns, but unless you know how to measure those returns, you will not know just how much you are getting. In business, it is all about numbers, because numbers do not lie.

Don’t let technology eat up your resources – get some value out of it

If you are not careful, technology could eat up too many resources in terms of money, staff and time. Thus, you must know how to measure the return you are getting from it. Otherwise, you might as well scrap the entire department if possible. Some managers like to measure the return on investment for technology on individual units while others like to measure the ROI on the entire technology investment. However you do it, just make sure that you know whether what you are getting out is more than what you are putting in.

Measuring ROI for technology can be hard, but you should do it

Measuring return on investment for other departments is easy, but for technology, it is a bit hard. What did you put in? What did you get out? If what you get out is less than what you put in, then you haven’t got any value. If what you get out is more than what you put in, that is good progress. To get positive return on investment for technology, you must get out more than you put in.

When we talk about getting out more than you invested, well, that simply means that the end users have to be trained to use the technology systems effectively. Investing in innovative products is very smart, but using them effectively to harvest all the potential is another matter altogether. Studies have established that in most businesses, employees use just about 70% of all the potential that a tech system contains. Thus, getting positive return on investment for technology does not depend entirely on the IT department, but on the other departments as well.

Know all the costs that have gone into making the IT investments

Cost is what you start with when you are measuring the ROI for technology. Costs in their entirety will include the money. In money, we mean every cent that went into buying the systems, the installation fees, the training costs and so on.

Then there is the cost in matters of the time invested, the downtimes and disruptions caused and most importantly, the opportunity costs (where the chance to do something that could have profited the company was lost).

Measuring the benefits

After knowing the costs, you must now move on to the benefits. Just what are you getting out of the system? You will never know until you give it serious study.

It can be hard to measure the benefits of investing in IT mainly because the IT department supports other departments so that they can achieve their goals effectively. If you think in terms of efficiency, you will find out that this is not really worth much. Thus, you have to find out more ways in which technology has impacted on the processes positively.

 Consider for example, how much business you will have created from the use of the video conferencing tool to reach clients. By automating some of the processes, you can also find out just how much time you have been able to free up for departments so that they can pursue other tasks.

Consider other things too. For example, consider whether implementing the customer relationship management (CRM) tool freed up some time for the customer care team such that they were deployed for other tasks. Did investing in a certain system make it easy for customers to reach the company, for them to access services and products? Of course it did. Are complaints being handled fast? Do the end users of the system, that is, from other departments enjoy their work more?

Believe it or not, there is really no way to get tangible monetary value from the IT department because it mainly helps the other departments do their job. However, if the other departments are efficient, then it means that the IT department has been efficient in training them on how to use the systems.


This is the truth … companies that invest in the best IT systems make their processes more efficient, make many happy customers, suppliers and employees. In this digital era, there is no way a business can write off IT and survive the cutthroat competition.

Posted on June 2, 2016 .