Any investment of an enterprise wants to get a return, the higher the better, which is also the goal of the enterprise, and the investment in informatization is no exception. To give a simple example, enterprises invest a certain market cost to promote products, which is nothing more than to better sell products and make the return on sales greater than the input cost. By analyzing the benefits generated at the end of the year, we can clearly know the return rate of this investment, and after the analysis, we can better guide enterprises to carry out follow-up marketing activities.
Information input also needs to analyze the return on investment, so that the input and output of enterprises can be seen at a glance, which is convenient for enterprise leaders to make better decisions. Therefore, ROI is the only way for enterprises to carry out informatization. In foreign countries, enterprises must analyze the return on investment before investing in informatization, which is also the work of CFO and CIO. The main function of ROI analysis is to help enterprises evaluate investment decisions and provide real and traceable data as the basis for decision-making, which can make enterprises' information investment more rational.
The results of ROI analysis can not only guide enterprises to invest in informatization, but also serve as a quantitative index to assess the performance of enterprise informatization department and the work of enterprise CIO.
But from the actual situation, we are not very mature in this respect at present. I have seen many solutions provided by manufacturers for users' information construction. Although the thick proposal has made a good investigation and analysis of the actual situation of users, tapped the needs of enterprises, and also came up with a good it solution. The overall technical architecture design is also very good, but basically there is no mention of return on investment.
I asked some decision makers of enterprise informatization, what finally prompted them to launch informatization projects? The answers are different, but one thing is the same. They think that information investment will bring them benefits, which may be seen immediately or in the future. These decision makers decided to invest in ERP, CRM and so on largely based on perceptual knowledge. Although they think it will bring them benefits, they don't know how much benefits they can bring, and they can't figure it out.
The lack of user experience and limited understanding of IT technology make it impossible for them to accurately analyze the return on investment, and manufacturers have not considered this issue well for users. Lack of rational analysis may lead to the failure of the project.
The ROI defined by IDC refers to the net income of investments of different scales (including reduced costs and increased income). The return on investment is time-sensitive-the return usually has a certain time range. One of the ROI reports is payback period, that is, the time required for the invested funds to get full return.
In addition, when we talk about ROI, we have to mention another concept, TCO (Total Cost of Ownership). The return on investment analysis of enterprises is generally related to TCO, which is used to evaluate the input of informatization. It includes the cost of resources, management, technical support and end use.
The return brought by enterprise information investment is mainly reflected in two aspects: the increase of income and the reduction of cost. Therefore, the calculation formula of ROI can be simply described as: ROI= (saved cost+increased income)/scheme investment, or ROI= return/total investment in a specific time, such as 1, 3, 5 years. However, in today's increasingly complex enterprise environment, the calculation of actual return on investment is better than the above formula. When calculating ROI, we can easily calculate the input cost, but the income is difficult to predict. Therefore, we must be careful when planning and quantifying these benefits.
We need to comprehensively consider long-term factors (customer loyalty and brand image, etc.). ) and short-term factors (costs and benefits, etc.). ), and we need to consider the tangible and intangible benefits brought by informatization. Therefore, it is also a challenge to comprehensively evaluate the return on investment.
Although there are challenges, we still have to go on. Although we are not very mature in ROI calculation, this is not the reason for us to stop. We can learn from foreign mature theories and methods, and at the same time, through our own exploration and accumulation, we will continue to mature.