Measuring Web Development ROI & Impact

Ah, ROI. One of the top considerations for greenlighting software and web development projects. And it makes sense—after all, it’s the simplest way to quantify any initiative’s success. But is applying the (Gains – Cost)/Cost formula the best way to measure the actual value of your investment? Unlike equipment or tangible tools, measuring the benefits of custom web development or expanding your software isn’t always straightforward.

The definition of success for web development projects varies from company to company. Nearly every business leader we speak with has a different response when it comes to impact metrics.

Evaluating what success looks like to your organization is critical to determining how to prioritize projects. If some parts of your system will demonstrate more value than others, we’ll help you prioritize development for maximum impact.

Establish how you will measure success

The first and perhaps most obvious factor to consider when embarking on a software development project is how much value the solution will provide. The amount you spend with a strategic web development partner should be relative to the project’s overall impact. Your investment won’t pay off if you work with a partner who wants to implement over-the-top systems that are expensive and fail to meet your specific goals.

Increased revenue is often a significant consideration when choosing a strategic software development partner. However, many projects have goals that aren’t directly tied to revenue, such as process improvements and upgrades to stay competitive or improve compliance.

Upon project completion, what are the specific value-adds the solution will bring to your organization? Before you begin logging requirements, it’s essential to discover the value and identify the hard and soft outcomes. Here’s a list of questions to help you get started:

Will your solution help you increase profits? Since sales are the engine of profit, your new web solution or software implementation should enable your organization to sell products and services more smoothly and frequently. Think about tools and solutions that will free-up time, energy, and brain space for your sales team or consider software that gives customers increased participation in the purchasing process and removes barriers to buying.
Will web development save costs by reducing resources? There are multiple opportunities to minimize costs, including asset management improvement and consistent price monitoring. Whatever your strategy, you should always keep in mind how your new web app, expanded system, or new software will save costs well into the future. Think about paper-driven or outdated processes and how much time and effort will be saved with efficient workflows. Your workforce will be able to focus on higher-value tasks if you implement the right solution.
Will you eliminate data entry errors and work faster? Human error can be costly. Software that automates tasks and auto-updates data entry significantly lowers the risk of clerical mistakes. Solutions that include automation capabilities have the added benefit of saving time, which directly translates into saving money.
Will you be empowered to make smarter business decisions?Large amounts of data need to be organized in a way that allows your organization to utilize it intelligently. Part of that means having quick access to the right information at your fingertips when you need it. That’s where great software and web tools can play a key role. Without the right solution, an organization can have all the data in the world and still be ineffective. After all, data-driven decisions can only be made when data is categorized, stored, and made available systematically.
Will you reduce your risk exposure? When it comes to maximizing your software’s return, you should be looking to minimize risk as much as possible. A data breach or exposure to non-compliance risk could damage your reputation, invite penalties and legal fees, and send customers running to your competitors. The average cost of a data breach in 2020 is $3.86M and takes an average of 280 days to resolve (IBM). Non-Compliance with laws and regulations has its own rabbit hole of issues. For example, healthcare organizations that fail to adhere to HIPAA compliance requirements pay costly fines (American Medical Association).
Will your customers (both internal and external to your organization) be happier? Happy customers keep the doors of your business open. According to Business Insider, fostering brand loyalty and retaining existing customers are critical strategies for survival, especially during the pandemic. Innovation and reputation are also critical factors in retaining customers. With so many choices in an ever-growing marketplace, organizations increasingly need to set themselves apart with solutions that make them stand out as modern and competitive. According to Gartner, customer experience drives over two-thirds of customer loyalty, outperforming brand and price combined. Your solution needs to consider customers every step of the way.

Consider the project estimation and software development costs

The estimated total cost of designing, developing, deploying, and maintaining your system should not outpace the expected value. Beware of low-ball proposals, as they often indicate hidden fees or a lack of expertise. It’s critical to work with a trusted partner who will be upfront and honest about costs.

The safest proposals offer flexible changes, such as a fixed price proposal or work package. Keep in mind that your development partner should not only optimize your spend on custom software, but they should prioritize reducing ongoing spend in your business.

And speaking of ongoing spend, consider any risk of downtown for system migration and training. Will there be added internal cost for project governance? What about subscription costs of continuing maintenance and infrastructure? Things like bug fixes and agile adjustments can be costly if your developers aren’t invested over time. Lastly, because no web or software development project is static, the timing and cost of upgrades need to be included in your cost analysis.

Look at the opportunity cost price tag

It’s expensive to maintain the status quo. The true cost of doing nothing can be catastrophic. If your data is stagnant, you can’t make informed decisions or respond quickly to audit questions. If your systems aren’t secure or making tasks easier for your staff and your customers, internal frustrations will arise, which are guaranteed to spill over onto your customer base. If competitors give users a better UX and offer consistent innovation, it will be increasingly challenging to retain your customers. If you’re using paper or unsupported software, what would the loss look like in the event of unforeseen loss or software failure? In these cases, most of the benefits discussed would be secondary.

Thrive with a strategic development partner

If you’re hyper-focused on quantitative benefits alone, you might overlook some of the more qualitative gains. As you work through how your organization measures project success and web development value, you’re likely to discover more expected outcomes than you initially thought! Of course, ROI matters, but don’t forget about all the other factors that go into choosing a strategic development partner, one who cares about your business today and tomorrow.

See what your organization can achieve with the trusted American Web Devs team. Reach out today!