Return on Investment

Since the computer was invented, computer techies and business executives have debated the costs and benefits of technology expenditures.

With desktop computing and the Internet growing explosively throughout the 1990's, little thought was given to return on investment. Now it is the focus.

There is an increasing focus on how to use technology to maximize efficiency and gain competitive advantage. Now that we all have computers, how do we use them better?

Big business has been doing this for years. Many small business have yet to realize the benefits.

Major change has taken place in the computer industry over the past two decades. Some of the facts below may surprise you.

• The U.S. Department of Commerce reports than nearly 50% of capital expenditures are for computer technology
• Some 90% of CEOs cite their top priority as increasing employee productivity according to Darwin magazine
• Only 30% of computer professionals believe that computers are perceived as value centers (instead of cost centers), according to CIO (Chief Information Officer) magazine.
• According to IT Centrix, when computers are viewed as a value center, every dollar spent on information technology creates about six dollars of organizational value

In order to focus on computers as an investment, it helps to track business metrics including:

• Revenue generation and gross profit margins
• Employee headcount and productivity
• Expenditures and soft costs
• Customer satisfaction
• Market share

While the original prediction of the paperless office has so far turned out to be false, the paper-reduced office has the potential to save thousands of dollars on the direct and hidden costs, including the handling, of paper.

Without computers, paper was used for all information storage, processing, learning, verifying, planning etc.

Pre-Internet, paper and mail was the best way to distribute all information. For some information, paper is still king. However for the bulk of information storage and exchange, paper is simply too expensive.

Consider printed product literature. Expensive, static, costly to distribute, change, reprint and re-distribute. With the Internet, paper is slow. And in business, where time is money, slow costs money.

Paper is essential for some information. The trick is to eliminate it where it is not and where it is getting in the way. Failure to address this is throwing money in the garbage, literally.

Faxing is another area of waste when used more than essentially.

Faxing is great but take a closer look:

• Most documents faxed are created on a computer
• These documents are printed so they can be faxed
• The paper is faxed and then the copies must be filed
• The faxes received must also be filed
• The paper copy of the fax is uneditable
• If revisions need to be made the process starts over

Another close look at faxing:

• Document created on computer = digital
• Document printed = digital to analog
• Document faxed:
• Fax machine scans = analog to digital
• Fax machine sends = digital to analog
• Fax machine receives = analog to digital
• Fax machine prints = digital to analog
• Since it is analog, collaboration impossible
• All the conversion is a waste
• So is the extra phone line
• So are the supplies
• So is the space
• So is the electricity

Faxes are good for:

• Documents with signatures on them
• A boat anchor
• Not much else

Just like paper, faxes are not going away. But using them when they are not needed is wasteful. In addition to all the work and conversion, it produces paper, handling and storage costs.

The most hidden costs of paper:

• Finding it
• Storing it

For more information on ways you can get a better return on your technology investments, contact us.