What is an ROI Analysis and Why is Calculating ROI for IT Projects Difficult?
An ROI analysis (aka business value assessment) is an in-depth evaluation of a proposed investment that shows the anticipated return over a given time frame. It includes a yearly breakdown of the quantifiable benefits and costs, converted into today’s currency using the net present value (NPV) calculation. It might also provide the payback period (when cumulative benefits will outweigh cumulative costs).
On the surface, this may not seem too difficult. Yet, experience tells us that many sales and purchasing teams are challenged to perform this analysis.
This is understandable. Technology solutions can be huge, complicated investments. They can impact many aspects of a business and they’re delivered in a myriad of ways (on-premises, cloud, or hybrid) using a variety of payment models. Such an analysis requires an expert who can quickly understand the customer’s current state, the value a solution can deliver, then unearth the quantifiable value of the solution in the customer’s environment.
What are the Benefits of Using a Third-Party ROI Analysis Service?
TFP’s ROI consultants have analyzed the impact of a wide range of technologies for thousands of customers across all verticals. Customers appreciate the objective insights and guidance we provide, and vendors report close rates of over 50% when we’re involved in the deal.
We work with your customers to harvest the data we need for the analysis. We identify and quantify impactful benefits like the margin associated with increased revenue, reduced operating expenses, increased labor productivity, and reduced risk. Then we provide the financial justification they need to make an informed decision.
With a third-party expert, you and your customers gain:
Exceptional Work Quality
Our intense focus and experience with demonstrating ROI means we work efficiently to achieve favorable results. Our analyses are clear, transparent, and of professional quality, suitable for an executive audience.
We act as a neutral third-party service provider without a direct financial interest. We research each customer and examine their financials so we can help them see how your solution will support their business and financial objectives.
Many of our clients are in growth mode and they need flexibility. With access to third-party ROI experts, you can scale your ROI capabilities or reduce capacity quickly.
We’ve been calculating the ROI for technology investments since 2000. Our experience from prior engagements (sometimes with the same customer) can lead to better insights and outcomes.
What Can You Expect When Working with TFP’s Return on Technology Investment Experts?
We deliver a customized ROI analysis with financial benefit calculations, investment details, key financial metrics, and summary charts that your customer can use in their business case. We have a proprietary template that handles much of this work. This allows us to focus on what matters the most—your customer’s current state challenges and the quantification of business benefits that your differentiated solution will deliver. Our 4-step process is simple and efficient:
We’ve described this process in detail (with examples) in a blog titled “How to Do an ROI Analysis in 4 Steps” for those who need more information.
Clients who use our ROI analysis service experience faster sales cycles and close rates in excess of 50%. Contact us today to request an ROI analysis for your next strategic deal.
“TFP helped us land a multi-million-dollar win! We had no idea how plug-and-play TFP was until we pulled them in to provide business case analysis support to one of our top prospects. After one account team call, they were able to get on the phone with our sponsor and drive the development of a compelling business case that helped us close one of the largest sales in our history. Their process was fast, professionally executed and delivered its own convincing ROI.”
Scott Rosecrans, Director of North America Sales, Enterprise, FinancialForce.com, Inc.