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The Tech Leadership Academy is made possible by generous funding from Microsoft Community Affairs
These materials are available under the Creative Commons Attribution-NonCommercial 3.0 License.
Evaluation: Technology ROI
Beth KanterAuthor, Beth’s BlogPartner, Zoetica
These materials are available under the Creative Commons Attribution-NonCommercial 3.0 License.
Understanding how to apply an ROI process to technology decision-making with help your organization avoid making mistakes and save valuable time and resources.
Measuring the Networked Nonprofit: Using Data for Decision Making
These materials are available under the Creative Commons Attribution-NonCommercial 3.0 License.
Session Objectives
• Understand the importance of evaluation in successfully managing technology
• Provide a methodology for analyzing the return on investment of technology that includes both quantitative and qualitative outcomes
INSERT Poll:
Have you ever asked or been asked these questions
What is the value (of x technology) ?Should we invest our time or money in this technology?
Has your organization conducted an ROI analysis or study as part of a technology investment?
YesNo
Objective 1Understand the importance of evaluation in successfully managing technology:
What three words are top of Mind when you think about A successful ROI process?
TYPE into the CHAT
An analysis that looks at the benefits, costs, and value of a technology initiative over time.
What: Return on Investment
Simple
Credible
MicroTime
Total 5 ROIDesign
Principles
Simple and Economical
Credible
Micro versus Macro
Considers more than just direct costs
When is ROI used?
Time: Future or Past
Inform
Decision
Learn from the
Pilot
Investing in a Video Conferencing System
Future
Laptops and Internet Access
Past
How much time will staff members save with laptops? How does access to technology and information improve services to client?Laptop Project Pilot
Cost of travel time from monthly time sheet
Mileage
Value of Shifted Time
# Trips Needed w/out laptop
# Trips Needed w/laptop
Articulated value of using Facebook and Twitter as:
-Customer Service-Efficient way for staff to answer public health questions-Efficient communication with journalists
Quantified:
Saved TimeSaved Paper and PostagePositive word of mouth-
“People regard our program as honest and informative. After almost two years on the social media front, we’ve developed a good system to get timely and accurate public health messaging to our communities. We firmly believe that our presence on social media sites has really enhanced our communication with the media and public.
Executive Director, Gary Edwards said it best in our 2010 Annual Report; that during tough economic times, SLVHD rose to the occasion and found innovative, cost effective ways to communicate with our community. “ - Vanna Livaditis, New Media Coordinator
Number of Months Strategy, Measure, Improve
Investment
Insight
Ladder of Value
$
Interaction
Results
Impact
Use ROI if…..• Long Life Cycle• Mission Critical• Linked to Strategic Goals• Large Investment • Visible or Controversial• Change management• Large Target Audience• And ….
How much does it cost?
Can we afford it?
Discussion:
Do these principles make sense? Why or why not?
Anything missing from the list?
Is there a time when you didn’t follow one of the principles? What happened? What did you learn from it?
What are some ways that you have applied these principles to your own ROI work?
Objective 2: Provide a methodology for analyzing the return on investment of technology that includes both quantitative and qualitative outcomes
Benefits
Value
Costs
THE ROI PUZZLEThe Rubrics Cube of ROI
Benefits
Efficiency
Effectiveness
Benefits
• Improves the ability to maintain a system
• Eliminates duplicate systems• Accommodates increases in
workload or demand without additional costs
• Reduces manual operations• Improves efficiency• Reduces Travel Cost/Time
Efficiency
• Improves ability to deliver• Improves access to services• Improves access to information• Improves accuracy• Improves effectiveness of
information delivered
Effectiveness
Tangible BenefitsTangible Benefits
Easy to assign money values
Easy to Quantify
Tangible Benefits
I like that!We can save
$25,000!
Intangible Benefits
Subjective
Less Credible
Usually Behaviorally Oriented
Typical Intangibles
Job SatisfactionProductivityJob CommitmentWork EnvironmentMoraleEmployee RetentionInnovationCompetenciesLeadershipTeam workCooperationDecision-makingCommunicationClient satisfactionClient complaintsClient response time
Keep in Mind• List all benefits regardless of
whether or not they initially appear difficult to support or quantify
1. Does an acceptable, standard metric exist for the measure? 2. Can the conversion be accomplished with minimum resources? 3. Can the conversion process be described to an executive director and secure their buy-in in five minutes?
Conversion Test
“Anything can be measured in a way that is superior to not measuring it at all“
Can you Quantify Love?
ROI by the Numbers
You may need to collect data …
Staff SurveysStaff InterviewsClient surveysClients InterviewsData from systemTask AnalysisTimes Sheet AnalysisArticlesField researchObservationSecondary research reportsBenchmark studiesBudget and Financial Analysis
Don’t Panic!!
Prioritize what data you need
Understand what type of data decision-makers respond to
Now comes the calculations …
•Compare the total costs of different solutions
•Compare the total costs with the benefits
•Compare the costs of not doing the project
• Identify pilot goal to identifycost/benefit
Spreadsheet Aerobics
CRM System
Source: Steve Heye, YMCA National Software ROI Spreadsheet
C
Communicating Results
ROI Storytelling Techniques
Don’t show all, but have it ready
What happens if ROI is negative?
Understand how to apply ROI evaluation method. several different common situations
The Perils of Paul, Peter, and Pauline: How will you save them with ROI?
Episode #1: Save Paul From the Hammer
Meet Paul
Walter
Check please!
Walter, you should get
iPhones for all your staff
Let’s get all the attorneys
iPhones!
That’s dumbest
thing I ever heard …
How can Paul use ROI techniques to make a better decision?
TYPE IT INTO THE CHAT …
Episode #2: Lost in Translation
Meet Peter
He’d waste less time scrolling …..
Why can’t this spreadsheet fit on the screen!
I need a magnifying glass to see read this on the screen!
The monitors we have aren’t broken,
why fix them? We can’t afford it!
How can Peter convince his boss using ROI techniques?
Type into Chat
Scenario #3: No Buy-In
Meet Pauline
I better copy those papers
now while no is using the copy
machine …
The copy machine isn’t working!
Crap I have a deadline!
I can’t find the staff’s
performance review from last
quarter ..
I’m going to design and spec
out an Intranet!
For that money we could hire
more staff!
How can Pauline use ROI analysis to get buy-in from Boss and others? Type into chat
Your Turn!
Focus on benefits, not featuresResist fondling the hammerDon’t ignore intangiblesUse ROI Story Telling techniquesCompare costs of alternatives, cost/benefit, and cost of not doingPilot project to get credible numbersCollect the data you needUse ROI to drive change/buy-in, if needed
Summary
For Friday Small Groups:
Using the principles and methods, design an ROI project for a technology investment your organization is considering .
