Software ROI Factors: How To Measure The ROI Of A Software Project

Eugene Makieiev, BDM
Software ROI Factors: How To Measure The ROI Of A Software Project

Software ROI is essential for businesses using multiple internal and external solutions to run day-to-day operations. It shows whether your investment into a particular solution pays off by streamlining your team’s workflow and delivering high-quality results.

No matter what kind of software you want to integrate into your corporate ecosystem, it's crucial to evaluate whether it's efficient enough to use in the long run. By calculating your project's ROI, you will see how much you've earned thanks to a particular app and define its main perks and drawbacks.

If you’re not sure what factors to consider when calculating the ROI of an app or tool and want to dig deeper into the subject, this article will help you out. We will highlight the main aspects affecting a software solution’s ROI score. Also, we will provide tips on what to invest in to get even more profits.

What is Software ROI?

The return on investment (ROI) of a software product is a metric that shows you how well it generates revenue against the cost spent. Reaching a positive ROI is one of the core goals of any software solution you integrate into your daily operations.

Putting it into a formula, you'll get the following:

ROI % = Net Profit / Cost of Investment * 100%.

Many aspects influence a software product's ROI, from the quality of its data security systems to employees’ satisfaction. Hence, it’s worth considering as many factors as possible to increase the ROI of every new solution. This way, you will justify the tool’s implementation and get a realistic idea of its value.

Of course, getting a positive ROI score right away is impossible if you've just implemented a new software product. However, you can experience the impact and profitability of integrating a particular tool into your business processes through multiple factors. To name a few, these are its influence on business process automation and improvement, higher efficiency among your employees, etc.

Calculating ROI for a software project

Evaluating the software ROI on your own is a complex task. To facilitate it, let's discover some tips on getting more accurate results without overwhelming calculations.

  • Assess the ROI for a specific period.

    Your score will change over time. So it's critical to pick a particular timeline to get more accurate results. For instance, it’s convenient to evaluate the yearly or quarterly ROI of a specific software product.

  • Calculate optimistic and pessimistic ROI scores.

    This way, you'll learn the approximate lowest gain you can expect after implementing a particular solution. You will also outline the highest yield possible at the lowest cost.

  • Consider both anticipated and actual ROI.

    This approach will deliver more or less realistic anticipations regarding your profits. Thus, you can compare the actual numbers to those estimated previously. It’s useful for reports and further profit evaluations once you start earning money from your project (in particular, thanks to the app or tool you've integrated).

Factors to Influence Software ROI

Now, let's discuss the factors that impact the investment ROI for software projects or solutions you want to implement in your workflow. However, note that their importance varies depending on your current business needs and the software you want to integrate.

  • Employee experience with the product

    The level of your employee satisfaction with the tools they use significantly impacts the ROI for software projects. Therefore, ensure the app you're integrating is convenient and comprehensive for your in-house and outsourced team members. To do so, provide relevant, up-to-date tools to improve employee performance and productivity.

  • Data security

    The average data breach cost in the US is nearly $9.4 million. The outcomes of such issues are often critical for business owners. They can ruin your company's reputation and eventually bring it to bankruptcy. To avoid such an outcome, you need to invest in an approved data security system. You can also ensure your corporate information’s safety by training employees, updating hardware, and using robust antivirus software.

  • Business process automation

    Process automation is a beneficial feature many companies are currently implementing into their day-to-day operations. It automates numerous manual processes, centralizes data, and prevents manual error and data leak risks.

    One of the most compelling process automation benefits is its cost-effectiveness. You can reduce human involvement coming with unwanted expenses. Thus, consider apps and tools that facilitate process automation for your company and streamline routine tasks.

  • Business process improvement

    Every mobile or web development business faces particular changes throughout its lifecycle. They may occur in management, workflow approaches, development tools, and more. Being ready for these changes is one of the key business success factors. So it’s vital to be flexible when implementing new software, tools, or workflow approaches.

    Carefully analyze if the new tool or app you want to integrate is worth your investment. You can try preliminary testing of the product to verify its efficiency and reliability.

  • Customer service efficiency

    The quality and effectiveness of customer service determine your communication with your audience. You'll either earn regular, loyal customers or fail to attract new ones due to the poor attitude. That’s why customer support agents should be well-trained and skilled. Their goal is to address clients’ immediate needs and respond to their requests or complaints. Investing in this aspect of your business and the related software will enhance your reputation and product quality. It will also boost your customer base and take the ROI to the next level.

What You Should Consider While Calculating the Software ROI

The proper approach to calculating the software project’s ROI depends on many factors. In particular, these are the software you need, the cost structure (like the types of costs you include in the project), specific goals your company plans to achieve, and the potential challenges.

Apart from potential profits and the software ROI, take a closer look at the product. Verify whether this solution is what you need. That said, focus on the following factors:

  • Software product relevance and the problems it can solve
  • Implementation schedule and timeline
  • Implementation costs caused by data migration, software system transition, increased project complexity, etc.
  • Impact on day-to-day processes
  • Employee training cost
  • Employee satisfaction with the software product and its efficiency

Based on these points, you can evaluate and predict potential costs more accurately. However, more factors can influence the required investment. Let’s look at the key types of expenses to consider for your future project.

  • Hardware Costs

    You need high-quality hardware to implement and use innovative, comprehensive solutions. Hence, if you need to update the hardware before getting to work, you should take these costs into account.

  • Implementation Costs

    It’s often quite costly to ensure smooth product implementation. For example, obstructed data processes, data migration, and switching to a new system require skills and investments. So remember to include this cost for your mobile or web development project.

  • Training Costs

    You should also invest in training your staff to work with a new software product covering their daily operations. The team should have sufficient skills and experience working with a product. Your employees’ awareness and comfort lead to efficient project completion and high-quality results.

Final Words

Calculating the ROI of a custom software product clearly shows you how helpful and relevant a specific tool or app can be. It's essential for business owners to know that the new solution’s benefits outweigh the costs and resources they spent initially. Besides, the company can earn assets and capabilities to grow and develop in the long run by adopting various solutions.

If you need to increase your project’s software ROI, consider outsourcing development teams. We at Integrio will gladly help you with that. In over 20 years on the market, we gained plenty of experience implementing software development processes. So if you need a professional and reliable partner, feel free to reach out — let's discuss your project and plan the workflow!

Before you do, look at some of our case studies to better understand how we collaborate with our clients.

Cam Tran is Canada's largest full-line distribution oil-filled transformer company. The client asked us to build a custom work instruction management and business process optimization app. Our team developed Jiva — a custom platform for editing, searching, viewing, organizing, and creating work instructions. After its ROI calculation, which gave us promising figures, and the project's approval, we kept improving the solution. Eventually, it turned into a complete ERP system for the company’s needs.

123Signup is among the leading solutions for associate and event management. The client needed to refactor and rewrite their solution’s code. They also wanted to update the legacy components to make their app’s system and functionality more stable and convenient. Our team defined the key aspects we needed to rework from scratch, enhanced the UI, and added new features. These updates helped 123Signup increase user satisfaction and remain among the leading service providers in the field.

Mobiry is an AI-powered service for brands involved in omnichannel retail. Its primary goal is to enhance the ROI and grow sales. We designed an efficient data resource integration framework for the client's solutions. We also created the engine to use and retrieve POS data automatically. It enables personalizing promotions, targets customers with relevant offers, and predicts consumer behavior. As a result, we helped Mobiry enter the global market and become a successful SaaS product for retail businesses.

FAQ: Measuring the Software ROI for Your Project

Return on Investment (ROI) evaluates the profitability of your business or project and the investments made. For instance, you can measure the ROI for a marketing campaign you're launching or the software product your team is building.

ROI is vital in assessing your business's performance and the tools you use to enhance the company’s processes and workflows. It also lets business owners understand how every purchase or service subscription benefits the company. While calculating a software project’s ROI, consider the costs of employee training, setting up appropriate hardware, and its implementation for completing your daily tasks.

Calculating the ROI of software development projects provides valuable insights into the performance of software solutions you choose for your business. It shows whether you can justify investing in a particular app or tool. This way, you'll see how profitable or detrimental this solution is to your business growth and whether it's a viable option to use in the long run.

Business process software enhances the internal workflows of your company’s departments and teams. Hence, the ROI calculation will primarily rely on the implementation cost of such solutions. It also involves employee training enabling your teams to understand the product better and learn to handle daily tasks with its help.

Outsourcing software development teams work swiftly and efficiently. At the same time, this model allows you to choose from a wider pool of specialists. On top of that, such professionals are often more experienced, and their services are less expensive. Thus, outsourcing can significantly increase the ROI of your project.


Software ROI Factors: How To Measure The ROI Of A Software Project What is Software ROI? Calculating ROI for a software project Factors to Influence Software ROI What You Should Consider While Calculating the Software ROI Final Words FAQ: Measuring the Software ROI for Your Project

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