Many companies still view dedicated software as a cost rather than an investment. This is a mistake that can hinder business growth. In fact, properly designed IT solutions increase operational efficiency, minimize errors and reduce unnecessary expenses. In the long run, this means a significant increase in return on investment (ROI). How do you calculate ROI for dedicated software and what real benefits can it bring to your business? Let's find out.
Return on investment (ROI) is a key indicator to evaluate the profitability of implementing dedicated software. It is calculated using a simple formula:
ROI = [(Return on Investment - Cost of Investment) / Cost of Investment] × 100%
To accurately estimate ROI, it is worth considering several aspects:
For example, it takes your company 40 hours a week to perform a repetitive task (such as manually entering data into a system). Assuming that your employee cost is PLN 75 per man-hour, automating this process results in a savings (return on investment) of 40*75 PLN = PLN 3,000 per week, PLN 12,000 per month and about PLN 150,000 per year!
Wanting to calculate the return on investment, one should add to the values resulting from time savings the possible financial benefits of fewer errors (seen as employee time spent on error leveling and other costs - e.g. shipping goods that were missing from the customer's package).
This approach completely changes the optics regarding investment in dedicated software. If you measure your company's processes, you will be able to easily calculate the assumed return on investment, and then compare it with the real benefits that the implementation of dedicated applications has brought you.
The payback time depends on several factors, such as the extent of automation or integration with existing systems (ERP, CRM). Also important is the number of people whose work is facilitated by the implementation of dedicated software. As a rule of thumb, the better the software fits the company's needs, the faster it starts generating savings.
Below are examples of the benefits companies can gain by implementing dedicated applications:
The above examples show that dedicated software acts as a lever for growth, increasing a company's profitability and competitiveness. If you'd like to read more about the specific benefits that one of the companies enjoyed thanks to the application we provided, read the case study.
One of the myths about dedicated software is the belief that it is an expensive investment. In fact, companies can start with an MVP (Minimum Viable Product, a.k.a. basic product version) and gradually develop the system as needed. In addition, because the software is tailored to the company's specific needs, the company does not pay for unnecessary features, making the investment more cost-effective. You can read more about MVP and iterative (implemented in stages) software development on the blog and in our e-book on IT project management.
Summary
Dedicated software is not an expense, but a strategic investment with a high ROI. It optimizes processes, increases efficiency and helps you gain a competitive advantage. If you want to learn how modern technology can help your business, contact 2Simple and see what benefits dedicated software can bring!
