Return on Investment (RoI) is the glue that binds project investments to business results. In any business, the purpose of "return on investment" (RoI) metric is to measure, per period, rates of return on the capital invested in an economic entity in order to decide whether or not to undertake an investment. A high RoI means the investment gains compare favourably to investment cost.
As far as IT development is concerned, it is a boon for every sector and if implemented with the right objective, choosing appropriate partner and optimum medium suiting the requirement, then the returns are bound to flourish the business. Information Technology has helped entrepreneurs to scale new heights.
For instance, consider the case of BEST bus service of Mumbai. Generating daily revenue of Rs.22 lakh, it has proved cumbersome for bus conductors to issue tickets and manage their accounts. An experiment of e-ticketing was carried out, where the conductors were equipped with a handheld device for issuing tickets. The results were astonishing. E-ticketing served as a hassle-free means for issuing tickets while facilitating accounts management. The e-system saved paper wastage, printing cost, maintenance of tickets and, above all, it liberated the conductors from the carriage of load around their neck. The system has been successfully running since 2010. This is just one of the numerous implementations of IT which in this case saved BEST and their employees’ time, money and resources. Moreover, it has facilitated and revolutionized the entire system.
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VP-IT Operations
ViVa Connect
IT, generally, reduces the cost of doing business. The trick lies in making the wisest decision while opting for the IT-oriented infrastructure and services to cover your needs. Possessing at least some knowledge of IT would lead to having an upper hand in the deal. Keeping this in mind, Pranab Basu, Vice-President – IT Operations, ViVa Connect, said that having an IT infrastructure doesn’t necessarily mean setting up the entire system. Businesses can greatly save money by outsourcing their requirement to IT firms. In such way, they can enjoy the services while the IT firm takes care of the functioning and technicalities.
Traditionally, the RoI of an IT investment was measured by “financial” benefits. But today, business leaders and technologists have understood that “non-financial” benefits of IT investments are equally important, like –
Low-Cost Investment – Since most of the IT implementations are done over electronic devices, it is highly cost-efficient demanding very minimal investment.
Better Analytics – It allows to measure performance. Hence, necessary steps can be taken to eliminate loopholes and implement requisite changes. Detailed reports help understand the demand, response and effect.
Work Remotely – The system is operated remotely, allowing the liberty of mobility.
Competitive Advantage – With electronic storage and retrieval systems, searching, processing and execution of tasks can be done in a jiffy, giving you the much-needed upper hand over your competitors.
Real-Time Proficiency – Real-time access to data empowers to make amendments with the least wastage of time.
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Virender Jeet,
Senior VP - Technology
Newgen Software
CIOs, CTOs or IT Heads face the challenge of explicitly justifying their current as well as planned IT expenditure, clearly demonstrating the return on investment (RoI). According to Virender Jeet, Senior Vice-President, Technology Newgen Software, “A proven Business Process Management (BPM) platform enables enterprises to integrate processes with technology. It allows organizations to leverage their existing IT infrastructure to improve critical business processes, increase employee’s productivity and efficiency, and achieve operational excellence. Moreover, BPM underpins your business operations, ensuring that you start reaping the benefits within the first year of deployment.”
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Udayan Banerjee
CTO
NIIT Technologies
When you are looking at IT investment, you cannot look at it from one perspective, i.e. generating revenues. You should focus on how much cost you can save or how much efficiency you can improve in your organization’s internal operations with the use of IT. The other way to look at this is how IT can play role in launching new products and maximizing revenues. So, in such cases when you are looking at new opportunity, there is always a risk associated with launching something new like it may succeed or may not succeed. Putting more light on this, Udayan Banerjee, CTO, NIIT Technologies, comments, “If you are looking only at the RoI angle to IT spending, you will miss out on the opportunities where IT can give much more benefits. Trying out new things is directly associated with the chances of failure, but at the same time benefits can be much higher. So, trying out many things should not always be associated to RoI.”
Some Ways to intelligently cut IT cost
IT generally reduces the cost of doing business. The trick lies in making the wisest decision while opting for the IT-oriented infrastructure and services to cover your needs. The IT market offers vast services generating enough variety to choose from, but that might very well lead to confusion. Possessing at least some knowledge of IT would lead to having an upper hand in the deal.
Having an IT infrastructure doesn’t necessarily mean setting up the entire system. Businesses can greatly save money by outsourcing their requirement to IT firms. In this way, they can enjoy the services while IT firm takes care of the functioning and technicalities.
This works great for business with a very limited range of IT requirement. The best example for this would be online e-commerce-oriented services. Almost 80% of such services are outsourced and securely carried out with efficiency.
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Nitin Agarwal
CTO
yebhi.com
The new-age cloud computing system works miraculously. This facility has not only eliminated the need for physical systems, but also ensured 24x7 wireless connectivity across globe. Now data can be easily made available by an individual for others to access. Nitin Agarwal, CTO at yebhi.com, said, “The way to cut IT cost is one of the big movements that are happening around. According to me, this could be achieved by the adoption of ‘Cloud’ and its services. These services give you a scalability of the platform without having fixed cost for the surges of processing of transaction. That helps in significantly reducing the cost.”
On the other hand, for businesses with a bit higher requirement of IT incorporation can have a dedicated in-house set-up. Understanding the nature of work, a fully customized platform can be built to sustain the work flow. With proper calculative measures, future updates can be made to the system without much expenditure.
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Venkatesh Swaminathan
Country Head
The Attachmate Group India
Venkatesh Swaminathan, Country Head, The Attachmate Group India, exerts, “The companies are required to be inquisitive to look at things and have a couple of alternatives for the solutions which are running. However, they have to decide it wisely what applications are required to be used by them, which can offer maximum benefits by using lesser resources.”
Today, cutting IT costs is on the agenda of CIOs and CTOs across business verticals. However, businesses should focus on optimizing IT expenditure, rather than just cutting IT costs. By investing in innovative technologies such as Intelligent Business Process Management, active and predictive analytics, cloud, etc, enterprises can ensure continuous adaptation to changes, while avoiding huge recurring investments in restructuring their IT infrastructures.
satinder@varindia.com
