Proving ROI – it’s Easy as ABC

It’s all about asking the right questions.

That was the conclusion we came to in an earlier blog post about how to make strategic and successful IT investments in the public sector.

So let’s say you’ve asked the right questions before a critical IT investment. Everybody is on the same page about what project success looks like, a dialogue has been opened, realistic expectations were set, and the proper IT investment was made.

But what next? It’s great that you have a good IT investment, but how do you think through what are reasonable actionable and logically connected outcomes of that investment? How do you measure and prove a return on investment?

Proving ROI on an IT investment is more important than ever. While there’s always been a financial motivation prompting public sector to invest in better IT, budgets and financing have dried up.

That leads to this truth for IT: Increasingly it is the business value of IT solutions that’s now driving technology investments.

So how do you measure ROI? How do you properly track the investment? How do you make sure that you’re doing these things so you can ensure that the budgets are there for the future IT investments you will need to make?

Part of that is setting up baseline measures up front before a project is launched and tracking them along the way to ensure and evaluate ROI. As a recent Center for Digital Government report noted:

Which factors will really indicate whether this IT project is a success? To answer this question, establish the baseline measures of key project factors to assess before and after project implementation. These measures may be qualitative and quantitative, for example: What are you being asked to justify and count when reporting on results? How does your organization measure success for both IT and the business-side stakeholders you serve? While you may also measure financial factors such as return on investment (ROI), payback and total cost of ownership (TCO) in a fashion similar to private companies, these factors may not necessarily be at the top of your list. Instead, ”public good” factors that reflect the mission and organization of the department or government as a whole may have an over-arching importance.

Here are eight metrics and measurements measurements you can be tracking that will help you prove your investment and help calculate the ROI on IT investments.

You know your IT investment is a success if you have…

• Reduced over-the-counter time for transactions
• Increased self-service opportunities to meet constituent expectations
• Reduced backlog of cases, permit applications, etc.
• Fewer calls for general information and help with applications and processes
• Increased client and citizen satisfaction because of better service
• Reduced cost of physical storage
• Reduced cost of supplies
• Cut back on staff cost savings

The value delivered by an IT project and its impact on organizational goals may not be readily apparent to elected officials, business-side managers and users. That’s why measuring the above metrics will help you successfully prove a solid ROI – and hopefully secure you future funding for equally as important IT investments.

IT solutions must provide a healthy return on investment (ROI). And, the sooner that ROI is realized through operational efficiencies, the opportunity to reduce overhead and eliminate support and maintenance fees of systems that are no longer needed – the better.