Revenue vs Operational Efficiency

Are you torn between increasing your revenue or improving operational efficiency for your IT budget? There is only a fixed budget size and these objectives are opposite of each other. Often, there is no clear quantitative figures on how much Return On Investment (ROI) can be achieved. Here are some guiding light to let you do a common sense evaluation.

1 User Enhancement

Doing an enhancement for 1 single user is clear indicator that it is not revenue generation worthy. It may not justify the objective of operational efficiency. This type of enhancement will often comes from customer, top management or even compliance. The correct question is “Can this be resolved with other means?”. Do conduct sound ROI evaluation with user base and impact before allocating your budget for such request. Do not be shocked that this is a common fact in many organisations.

Enhancing for Future

Business likes to demand their need on certain “ABCD” features for the future and potential revenue generation. You may be force to implement “ABCD” at such demand only to find the potential revenue generation never materialise. An approach to counteract such whimsical request is to go Agile and do Proof of Concept (POC). This mitigate your investment risk and increase your alignment of the business requirements.

Consult your Data

There is a chance that your data can tell you more than you expected. Flat or negative growth will point that you are in need of revenue generating initiatives. On the other hand, increased resources and continued customisation requests show signs that you may require operational efficiency review.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s