Technology
How to Make Sure a Software Investment Pays Off
Published by Jessica Weisman-Pitts
Posted on October 29, 2024
5 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 29, 2024
5 min readLast updated: January 29, 2026
Software has the potential to transform and enhance your business
Software has the potential to transform and enhance your business, granting new capabilities, streamlining operations, and generally improving productivity. At the same time, software is expensive in many cases.
Purchasing or developing new software can bolster your business, but how do you make sure that your software investment pays off?
The ROI Equation for Software
The best way to determine the relative value of a piece of software is to calculate its potential return on investment (ROI). As with other areas where ROI is applied, this essentially means calculating all of the costs and all of the benefits, then comparing them. If all of the benefits collectively outweigh all of the costs, you can feel reasonably certain that your software is going to be a worthy investment.
The only problem with this is that ROI is hard to estimate, and even if you do a great job, it’s still only an estimate. That said, you can be as thorough as possible in your analysis to make that estimate accurate – and you can always make modifications to your suite of software if you find it to be inaccurate in the future.
Doing Your Due Diligence
Before selecting software to add to your company software portfolio, you need to do your due diligence.
Making Changes
On an ongoing basis, you’ll want to review the value of your software and make appropriate changes.
There’s no guarantee your software investment will pay off. But if you analyze your needs closely and pay close attention to the ROI of each new software acquisition, you’ll be in a much better position to secure a positive return.
ROI, or Return on Investment, is a financial metric used to evaluate the profitability of an investment. It compares the gain or loss from an investment relative to its cost.
Due diligence is the process of thoroughly investigating and evaluating a potential investment or acquisition to understand its risks and benefits before making a decision.
Software expenses include all costs associated with acquiring, implementing, and maintaining software, such as purchase price, training, and ongoing support costs.
Explore more articles in the Technology category
