Why On-Site Software ROI Isn’t Enough

To better understand the success of their operations, businesses measure their return on investment or ROI. This proves to be difficult as growing operations become sprawling and more complex. How is manufacturing performing? Why are various regions seeing a downturn in profitability? Will new technologies improve distribution and by how much?

To answer these questions, many companies have adopted on-site ROI software. But are in-house solutions enough to monitor and manage your investments?

Probably not.

According to DC Velocity, 50 percent of organizations feel their supply chain software application fails to deliver the desired ROI. There are many reasons for this – and not all are limited to software failures.

Below are a few things to keep in mind when adopting an ROI platform and what you can do to get the most out of your software.

The Costs of Evolution

It seems like a circular paradox, but a robust ROI platform needs to perform with a certain level of ROI of its own. To say this another way: An ROI platform ought to boost ROI via the insights it provides, otherwise, what’s the point? Obviously, there are costs to implementing ROI software. And this is where cloud-based platforms really outperform on-site solutions.

“If you decide to house your technology assets on premise, you will need to purchase all the hardware and software yourself,” says Kenandy, an enterprise resource planning or ERP software built on/for Salesforce. “Cloud ROI, by contrast, is an operational investment that requires no on premise hardware and your capabilities can be better matched to address the company’s needs.”

According to the aforementioned DC Velocity survey, 53 percent of respondents who chose to use cloud-based versions of their applications said that they realized ROI at a faster rate. This isn’t surprising when you realize that on-premises assets are a major capital expense that requires IT staff to set things up and a tremendous amount of energy to manage. All of these expenses and upkeep are absorbed by the service provider when companies choose cloud-based ROI software.

The Human Factor

Of course, ROI software (cloud-based or otherwise) doesn’t mean much if it is used improperly. To get things off on the right foot, you need to establish expectations specific to your goals and organization.

Here are a few things to consider:

• Assess What Needs Improvement: Identify specific challenges for your company (including labor management, inventory, manufacturing, distribution, etc.) and focus on those items first. ROI software will help you diagnose peripheral shortcomings, but it’s best to tackle the biggest problems right away.

• ROI Is a Team Effort: The more you discuss company goals with the leaders of each department, the more likely you’ll be to set realistic expectations. Not only is this beneficial for solving issues for individual teams, but it’s also crucial for the whole organization.

• Pre-Determine the Benefits of ROI Software: How much time and money is lost annually due to misplaced inventory, duplicated labor or poor communication? How many of these hiccups can be remedied by ROI or ERP software? Does the revenue saved outweigh the platform’s cost?

• Long-Term & Short-Term Considerations: One of the main reasons companies are dissatisfied with in-house ROI platforms is that they take too long to implement. Do yourself a favor and adopt a cloud-based solution or, at the very least, set your benchmarks further in time to accommodate an existing on-site ROI system.

In the end, any ROI platform needs to be matched to human expectations if businesses are to make any valuable insights based on the data provided. Otherwise it’s just a bunch of numbers; a costly disappointment.

Are you ready to implement cloud-based ROI?