ROI for your business

Blog Author: Aaron Smith | August 16th, 2012

Previously we’ve discussed downtime and some of the causes and strategies for dealing with it.

The main takeaway from this revolved around bearing in mind all the calculations that could affect equipment purchases, particularly when it came to staff productivity.  But what exactly does that mean in general and more importantly, to you?

Well, no two businesses are going to have exactly the same answer, but there is certainly a common thread that resonates with all business owners when it comes to getting a return on investment.

“How quickly will this baby pay for itself?”

When it comes to purchasing new IT equipment, the obvious place to start looking for your ROI is going to be in the time that it saves your staff.

An example might be a client who wants to enable external contractors to access their systems.  By implementing a Terminal Server solution, they might save a contractor 2 hours a week.  That external contractor doesn’t come cheap; at say $80 an hour, it’s only going to take 12 to 14 months to see a return on a $10,000 investment.

Another way of looking at it might be this; your staff members are nagging about the computer equipment being slow, but the last thing on your mind is buying new PCs at $1500 a pop!

“It takes so long to run this report, I pretty much go and make a coffee, take a bio break and hope it’s finished when I get back!”  Two minutes here, five minutes there; it is not inconceivable that by the end of the day, staff are wasting 15 – 20 minutes waiting for aged computers to tick over.

In this scenario, if the average hourly rate is $20 and performance issues are wasting 15 minutes a day, in dollar terms, there goes $5 per working day, per employee.  So now we have everyone in the company with old equipment effectively putting a match to a five dollar note for the 240 days of a year that they sit in front of that old computer.

A staff member on $20 an hour will have a new computer that pays for itself in just over a year.  The more you pay them, the faster you see your return on investment!

These are the sorts of calculations we can help you work through when it’s time to consider upgrading or replacing your infrastructure.  It is important to understand whether making (or not making) the investment makes good business sense.

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