If You're Not Considering These Things When Calculating Software ROI, You're Miscalculating

When trying to determine the return on investment (ROI) of your software purchase, you may automatically think about traditional, quantifiable metrics of software ROI, such as revenue earned, customers acquired, time saved on tasks, and number of processes streamlined.

Although these metrics are essential, they aren’t enough to give you a complete view of your software ROI. And as a small or midsize business decision-maker, you likely want to calculate all the ways your software purchase has impacted your business, not just a select few. 

To do this, you’ll need to turn your attention to non-traditional indicators that formulas can’t capture but that are still critical to your business’s long- and short-term goals.

4 non-traditional metrics to consider for a (more) well-rounded understanding of your software ROI

Non-traditional indicators may have a subtle impact on traditional metrics, such as costs saved, or may not be quantifiable at all, which can make them more difficult to analyze. However, doing so will help you develop a more complete understanding of your software ROI than relying on traditional metrics alone.

Here are four non-traditional metrics you can consider.

1. Tools consolidated

With digital transformation comes the threat of app sprawl. Finding the right tool allows you to streamline your tech stack, unsubscribe from apps with redundant features, and centralize your work. 

If your software purchase allows you to prune the number of tools your team needs to use, that’s putting money spent on unnecessary monthly subscriptions back in your pocket. 

Other “cost savings” to consider from consolidating your software include the lessened security threat of having data spread across multiple vendors (prevention of internal attacks or ransomware), the time cost of training employees on multiple platforms, and the time they lose switching between apps to accomplish daily tasks.

2. Regular meetings reduced or eliminated

A common traditional ROI metric is time saved, and perhaps you’ve already calculated the time you’ve saved on streamlining tasks and processes. But have you budgeted for the time your software platform has saved you by eliminating the need for your employees to frequently meet?

Meetings are expensive to a company because all your human capital is tied up in one room, focusing on only one thing. If your software purchase has allowed you to cut back on the number of required meetings, that’s time and money better spent elsewhere.

Perhaps your new marketing software is now generating robust reports that can be emailed out, making analytics meetings a thing of the past. Or maybe that new project management software you adopted allows for dynamic sprint planning, so you don’t have to gather the whole team to discuss what needs to be worked on.

3. Reach of your business is maximized

You only have your staff for a subset of the week, and everyone needs time off. But in a 24/7 world, many businesses can’t afford to go dark for hours or days at a time.

And the thing about software is that it’s working even when you’re not. 

If your software allows you to have coverage on evenings and weekends, it’s picking up a huge lift during a time when your paid staff are not on the clock. The overtime or freelance/consultant fees you’re not having to pay for this work could be significant.

Maybe your new social media management tool is able to post scheduled content or promotions to your social profiles over the weekend so your staff doesn’t have to manually post. Or perhaps your new CRM software is able to auto-respond to customer service requests to make sure your customer base is cared for until an employee is back in the office.

4. Consequences avoided 

When calculating software ROI, it’s not just about what you’re getting out of the tool—it’s just as important to consider what you’re not getting. 

If your business deals with highly sensitive data, a cybersecurity tool may not be actively contributing to your profit margin, but it could be saving you hundreds of thousands of dollars by protecting you from ransomware attacks, regulatory fines from data breaches, and costs associated with rebuilding brand trust after leaking sensitive customer data. As a result, small businesses are increasingly investing in cybersecurity software. 

Additionally, take a look at how this software increases the reliability and resilience of your tech stack. There are new unprecedented global disruptions brewing every day that could threaten business continuity.

Don’t sell your software ROI short by overlooking its subtle contributions to your business 

The standard key indicators of success are a great place to start to get a high level view of how valuable a software purchase has been to your business. But if you’re looking to get granular and understand just how much a software has impacted your bottom line on a day-to-day basis, consider these non-traditional indicators. 

Remember, it’s not just about what you’ve gained, but also what you haven’t had to spend. So when it comes to time and money, think about what you’ve been able to avoid as a value-add, in addition to what you’ve earned, for a more well-rounded understanding of your software ROI.