Your innovative technology investment should result in a monetary and advantageous return.

Technology requires a considerable amount of investment and effort to implement. Fortunately, as well as unfortunately, it also evolves at a rapid pace. Every day, new innovations are introduced to the market to make things easier on us. If you want to stay ahead of the competition and to leverage your networks, you need to apply these latest innovations in your business.

As a result of this constant innovation, businesses may be forced to make new investments into technology and spend time training new employees. But is this expense really worth it? Successful companies often generate a great ROI from their technological investments and they are able to do so with careful planning and applying smart strategies.

Return on investment is a very simple concept to understand. It’s used to determine just how much profit or benefit you can gain from an investment. For example, would you cut down the costs and earn increased revenue from the investment if you transfer your data to the Cloud instead of new databanks or servers?

The answer to this particular question is yes, but it might not always be so for every question you ask. It is a wise business move to calculate your returns before you make a new investment. This will help you minimize useless investments and bring in high-performance and effective technology, and ensure your company works more efficiently.

How to Calculate ROI

It’s very easy to calculate ROI. You need the values of your cost and your net gain before you use the formula ROI = net gain/cost.

For example, if you spend $5,000,000 on a big technology upgrade and see your revenue increase by $7,500,000, your net gain would be 7,500,000 – 5,000,000 = $2,500,000. The ROI would be 2,500,000/5,000,000 = 0.5. This translates to 50% gain or profit for your company.

Of course, this is a very narrow way of looking at ROI. You also need to account for less quantifiable costs like costs of labor, employee time, disruptions, etc.

Looking forward to your feedback on this blog post and to sharing knowledge with you!

This blog was originally posted on Leveraging Networks. Please follow me on Twitter and LinkedIn

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