Building a business case for a new initiative or technology deployment is always a daunting task. Pain points to articulate and overcome, business benefits to identify and realize, project scope to define and budget to estimate. All these items culminate in a return on investment (ROI) calculation which will justify the investment.
Sometimes ROI is easy to see. You have the cost of the initiative you are planning and an estimate of the value that the initiative will generate or save. For example, a hardware store can calculate the ROI of purchasing and selling lumber by subtracting the cost paid from the the amount of income generated from selling the lumber - simple.
For projects it isn’t always that easy, as you have multiple costs that are not easy to calculate, also the monetary value of the benefits are not always easy to calculate. This blog provides some pointers on how to calculate the costs and benefits associated (and ROI) with implementing a modern Document Management System (DMS), Enterprise Content Management (ECM) system, Enterprise Records Management Systems (ERMS), Enterprise Document and Records Management Systems (EDRMS), collectively now know as Content Platforms.
Any modern Content Platform, should do much more than store and manage documents, which in itself has some ROI, the notable benefits being single source of truth, compliance, physical storage savings and most importantly search and findability. Modern Content Platforms and systems should be used to digitize, automate and streamline business processes, and it is the cumulative effect of efficiencies from process automation where the big ROI benefits lie.
The need to update your content platform comes down to the capabilities it offers you. More and more, modern workplaces are shifting away from using paper and physical documents and storage. This saves money and space.
To do that, you need a Content Platform that can digitally create, store and manage documents. Then you need a way to digitally classify documents so you can find them, either by browsing and searching.
That’s especially true when you factor in remote workforces and hybrid in-person/remote office arrangements. The pandemic in 2020 showed how critical being able to work from anywhere on any device is.
Classification is also the key to automating processes like retention and disposal. Modernizing your Content Platform means you’ve made it easier to standardize document and records management processes and that you have a system that won’t run the risk of losing an important document in the mail or to a spilled cup of coffee.
Many of the benefits of an upgraded Content Platform system can seem intangible. So how do you calculate and present the ROI on them?
When looking at the ROI of your Content Platform, it is important to consider whether you are looking to upgrade or to check in on how profitable your upgrade has been. There are differences in anticipated value and actual value.
Anticipated ROI is the calculation you use to decide whether or not to pursue an action. It is sometimes called expected ROI. In this case, you would look at anticipated ROI to determine if upgrading your DMS makes sense to your organization.
Actual ROI is calculated after an action has been taken. Say a project has been completed, and now you examine how profitable it was. This is what you can look at to determine your current ROI from your Content Platform or to see how upgrading has actually benefited your organization.
However you look at ROI, though, the formula remains consistent. It gives you a percentage that will either show a positive or negative ROI.
To calculate ROI, you want to take the profits from an initiative divided by the total cost of that initiative times 100. This will give you a nice percentile to more easily visualize the final numbers. Typically, ROI is also represented as the time it takes to earn or save, (return to the organization) the invested costs.
But how do you get the values for that formula for your business case?
Put simply, the real value of your Content Platform is derived from automating business processes, making them more efficient and freeing up time for workers to do more valuable tasks or simply to do more. The way you use your DMS automates business processes across your organization, increases the ease and speed of those processes and that translates to value.
By eliminating the need for hard copies and storage space for those copies, a modern Content Platform already saves you money by eliminating those costs. Standardizing workflows also saves money because they become easier to teach to new team members, reducing onboarding time and improving efficiency.
A modern Content Platform also provides the ability to integrate with other systems to automate processes across systems, making the overall process more efficient, reducing busy work, increasing employee morale and job satisfaction and increasing customer service and satisfaction.
There is also the addition of metadata driven search functions that cross data silos and make it easier for your teams to work together on projects while reducing the wait time for search results and the risk of inaccurate search parameters leading to confusion and miscommunication.
At TEAM IM, we recognize that predicting the value of your updated Content Platform may be difficult if you aren’t an expert in how they operate. That’s why we provide an ROI Calculator tool to help our prospective clients and partners find the anticipated ROI of a new platform.
With this tool, you can see just how much more efficiently and profitably your organization could be running. We look at aspects of your Content Platform across the spectrum of its usages, including:
By examining all these areas, we can estimate your cost savings, giving you quality figures for your ROI calculations and even letting you know how long it would take for your new Content Platform to pay for itself.
Every part of your organization is touched by your document management system, from human resources to accounts payable and everything in between. The more business processes your Content Platform enables and interacts with the higher the ROI.
Check the ROI Calculator and talk to the experts at TEAM IM to see how much money you could be saving. The answers may surprise you.
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