Analytics

How NerdCloud Can Help to Increase ROI on Your Software Project

by
on
11/22/2021
How NerdCloud Can Help to Increase ROI on Your Software Project

Technology investments can be complex and expensive, but sometimes they’re necessary to see your business grow. Measuring ROI on a software project is one of the key elements in making a decision on whether or not to proceed with development. It can help you to understand whether or not new software will help you make more revenue/profit, and if the additional revenue justifies the development costs.


Why is measuring ROI important? 

ROI, or return on investment, is the percentage that an investment is projected to earn. It’s a financial measurement that can help you quantify how your company can deliver maximum output and profit. The money and time that goes into software developments mean that they can be significant investments, and so calculating ROI is one way to see if the investment will be worth it. 

ROI can also:

  • Provide you a more tangible way to talk to stakeholders about these investments
  • Help you determine total ownership costs to your returns over time
  • Justify any future further software developments


How to measure ROI

There are two main approaches to measuring ROI, depending on what kind of software you’re looking to develop. 

Software that deals with business processes

This type of software project aims to improve internal business processes and ensure that workflows are optimized.
The best way to start is by first identifying and areas where it might be possible to:

  • Improve customer service
  • Capture revenue
  • Lower expenses

If you struggle to do so, that’s understandable as each business is unique when it comes to workflows. What can help is asking your staff what they think can increase their productivity and efficiency - what do they feel will boost their work, and by how much? 

Try and calculate:

  • How much current processes cost. If possible, compare that amount with how much the same processes will cost with the new software implemented.

  • The possibility of increased revenue by obtaining more clients without changing the amount of staff.

  • Sales efficiency. This can help you find out if it’s possible for your sales staff to become more efficient, productive, and self-reliant.

  • Process standardization and the value it can give your company.

  • How improved customer experience will mean greater customer retention and renewals.

  • How improved data integrity can benefit your company.

Software ROI can be measured by some or all of these factors:

  • Increased opportunity to become more efficient at sales and therefore gain more customers and revenue.

  • Hours saved for various teams/roles throughout the company.

  • Less opportunity for risk by anticipating or avoiding problems sooner than is currently being done.

  • Improved customer service which means a greater likelihood of gaining, retaining, or growing (net) new clients.


Commercial software/Software as a service (SaaS)

Here, the software is your company’s main source of revenue so your ROI would be measured as the sales generated in revenue (either monthly or annual recurring revenue). 

In this case, the best way to calculate your ROI would be: 

  • Finding your breakeven point. After calculating your revenue and expenses, how many customers do you need in order to break even each month? The number may be huge if you’re calculating the breakeven point for your total SaaS investment, but it may be small if you’re looking to break even on your monthly costs. This is a great place to start.

  • Trying to figure out if the development would have features that your potential or existing customers would enjoy. This can be done by surveying potential or existing customers, with test groups, etc.

  • Seeing if you can start smaller or validate sooner.

  • Staying away from overcomplicating the product and instead focusing on a few features and doing them really, really well. 


Measuring software ROI

It can be a complex and difficult task to measure the ROI of technical developments, but it’s worthwhile. It can be a tool to persuade or dissuade stakeholders, figure out how best to grow your business, and guide you in the right direction to give your customers the best product or service possible. 

If you’ve been looking to measure the ROI for a possible upcoming technical development, NerdCloud’s virtual team is the optimal solution. We help speed up your development process and keep you up to date the entire time. NerdCloud subscription is also more cost-effective than hiring a new developer because you’re only paying for time spent on coding, not for onboarding, coffee breaks, interruptions, meetings, etc. Get in touch with us today so that we can increase the ROI on your software project.