The Importance of a Project ROI Analysis
How is your current project progressing? Have you entrusted it to a team that is failing to produce results?
It happens far too often; the technology partner you have trusted is letting your project run long and over budget. Have you stopped to ask why? Projects primarily fail simple because the need itself is not fully understood. Projects become too big, too complex and are managed without focus. Poor project definition combined with a lack of defined measures will always result in a failed project. Fortunately, the answer to this problem is incredibly simple. A Return on Investment (ROI) analysis process is your fail safe against another failed project. ROI can be much more than just measuring a return…
An ROI analysis defines the formula of success for every project. When it’s done at the outset it becomes an essential component in the planning stages. You build your project around it, and in turn, it becomes a key management tool to keep your team on track. A project with a clear definition of where and how you will gain value will include measurable goals. These goals will include, but are not limited to, the return you expect to earn and how you intend to earn it. Creating measurable goals puts every member of your team on the same path to success and holds them – and your contractor – accountable. Measurable goals guard against scope-creep, keeping you on schedule and on budget. You are, essentially, determining what success looks like for your project, and giving yourself a blueprint to achieve it.
With every project your company launches, you should expect to get back what you put in. However, an ROI analysis is essential even on projects where you don’t expect to make a return or expect a negative return. An ROI is your tool to not only define where and how you will gain value, but also to help you find hidden or unexpected value. In these cases, an ROI analysis might reveal a pathway to greater value by increasing the scope of the project. Or, it can highlight areas where you can streamline the project to reduce your losses.
Let’s consider the technology partner you are currently using. They have skipped an ROI analysis, and as a result there are no clearly defined measures to follow. There is no calculation that determines what success looks like, so from the outset it is only a vague idea. As the project progresses, the scope changes. More and more things are added, perhaps in the hope of adding value. However, the result is only a ballooning of the timeline, and the budget. The project grows more complex, and as it does, it loses value. Whatever cost-benefit analysis that may have been done, is no longer relevant because the project has changed goals and trajectory. And unfortunately, with poor project definition and a lack of defined measures, your project is on the trajectory towards failure.
So how does this compare with a technology partner that starts every project with an ROI analysis? From its conception the project has a clearly defined measure of success. The project is planned around this calculation, making sure that every resource is used with efficiency and clear purpose. Your team uses this formula at every stage – in every planning meeting, in every progress report. They are working together to a clearly defined goal. The scope of the project is set early and doesn’t waiver. The calculation is designed at the beginning of the project and measured at the end. When the goal of the project is clear and measurable, it holds your team accountable. And when your team is truly committed to the success of your project, what are the chances that this project will be completed on time, and on budget?
At Nobious we design our projects focusing on value. Because of this we have yet to deliver a project that did not add significant value to our customer. An ROI analysis should be completed at the beginning of every project. This is the only way you can truly identify and guarantee success. Make the inclusion of an ROI analysis your first criteria when you choose your next technology partner.
NEW 2019 OFFER:
100 free hours of development time
No catch, no buts, no contracts. We offer new clients 100 hours of free development time to try us out. During this time we define your requirements, create an ROI and deliver your first major feature. If you don’t like us, you don’t pay. It’s that simple. Contact us today!