Return on investment typically depends upon time being saved.
Suppose you’re a baker, and you invest in an oven that allows you to bake twice as many loaves of bread at one time than you can now. The baking time that you save eventually means selling more loaves of bread and recouping the cost of the new oven. After you’ve recouped costs, you continue to make money on your investment compared to what you did before the investment. That’s return on investment.
Projected ROI is often the key point in making the business case for new equipment or new software. The people who control the budget want to know that money is being spent wisely and is ultimately for the good of the organization. Therefore, making the case for a swift and impressive ROI is often the key to upgrading systems, processes, or equipment. The same is true for upgrading workflows.
Traditional Return on Investment
The classic ROI formula goes like this:
ROI = [(gain from investment – cost of investment) ÷ cost of investment] × 100
So if you’ve made an additional $1,000 after investing $800 in software, your ROI would be:
ROI = [(1,000 – 800) ÷ 800] × 100 = 25%
The key is measuring how much more you’re earning now that you’ve made the investment, and it’s not always in dollars and cents. So if you invested in online form software and recouped the cost of the software through employee time savings and continue to save an additional 20 hours per week due to the software, you can translate that into money based on those employees’ wages.
Employee Efficiency Gains
Efficiency gains are often the main benefits of online forms and automated workflows. In other words, if you invest in form and workflow software and a process that used to take three days now takes only one day, that’s a major efficiency gain. It may mean you don’t have to hire an extra person, or you don’t have to worry about paying overtime, and it really adds up in the long term.
Efficiency gains can save on overtime and may mean you don’t have to increase staff.
Other savings come from avoiding the cost of paper and ink, as well as avoiding time spent collecting, sorting, filing, and archiving all that paper. If you tracked error rates for manual processes and online forms, you can also assign value to error reduction, which is another great benefit of online forms and automated workflows.
Higher productivity means making more product in the same amount of time. So if you make custom furniture and your woodworkers can’t begin a new project until they receive a paper form detailing the specifications of the piece of furniture they need to make, that’s time wasted.
If, however, orders are placed through online forms, which are automatically routed to any approving authorities as well as the woodworkers’ mobile devices, they can get to work more quickly, and there’s less downtime between projects. If it means they’re able to make one or two more pieces of furniture in a month, that’s higher productivity and higher revenues.
If you implement online forms and automated workflows, there are several ways you can measure ROI. Most of them have to do with time saved, greater efficiency, and greater productivity. And if you use outstanding workflow software like PerfectApps, you can set up workflows to automatically collect data and produce reports that clearly show where time savings occur and how productivity increases.
One of the best features of PerfectApps is its intuitive user interface, which allows creation of fully customized online forms and automated workflows without any programming. This means that form and workflow users can help with form and workflow design. And these are the people who are best positioned to know where bottlenecks are most likely and how to avoid them.
We encourage you to watch the PerfectApps demo video to see how easy it is to create your own custom forms and workflows, across departments, and across industries. And if you have any questions, we encourage you to contact us at any time.