Information Technology in general has long faced the challenge of being categorized as an expense, with management focusing strictly on cost without considering how or where IT expenditures may actually be helping the bottom line. IT professionals struggle with overcoming this stigma and convincing decision-makers of the merits of investment in hardware or software systems as part of a long-term path to sucess.
To be considered a success at the simplest level, any solution must either increase revenue or decrease cost in excess of the resources allocated to its implementation. By this measure even a modest website can offer a return by communicating basic information such as store hours, pricing, directions, announcements etc. by freeing up the time of business owners or employees from having to answer common questions. For example, if you have a full-time employee paid an hourly rate of $10 spending on average 30 minutes each day answering questions over the phone, that represents a cost of $1300 per year. Assuming this company were to purchase a basic website from us at $800 plus $30/month, that would represent a savings of over $150 the first year and over $900 each year after that. This is only considering the time savings, and excludes the other numerous benefits of a website.
Obviously at this point in time it is an easy sell to convince a business of the need for a website, however, the challenge lies in the showing the benefits of specific features or for more complex tools. These can represent significant costs, however this is where the greatest potential lies.
To give a real-life example (without giving too much detail), one of my clients is a party rental company which does a very large volume of rentals. Many companies in this industry take orders over the phone (as does my client). Several years ago I built a web-based rental software solution which allowed their customers to place their orders online. While this represented a significant cost initially, the system has paid for itself many times over in a short period of time. In the past 3 years, business volume has tripled. They do have a full-time employee dedicated to taking orders over the phone, but phone orders represent only one-third of total rentals, with two-thirds being handled exclusively by the web system. Assuming that the web system did not contribute to the increase in business (which, in fact, it did) and that volume would have increased at that rate regardless, in order to handle the volume the company would have had to hire 2 additional full-time employees at $30,000 each plus benefits. Compared to the onging cost of employment at over $70,000 per year, the cost of a web system was incredibly cheap.
As businesses grows, it is a natural progression to add more staff. However, as each employee is added, it is wise to determine the net value of this employee to the overall profitability of the company. Will adding this employee increase revenue or decrease costs in excess of the salary that they will be paid? If the answer is no, then perhaps it is not the best decision to hire them. Generally speaking, even a low-level employee represents a much greater cost than a fairly sophisticated website, yet it is often easier to get business owners to hire additional human resources than invest in a web application.
It is the job of web application providers to show prospective clients exactly how the system will benefit them in measurable, specific terms. This involves familiarizing yourself with their business and current processes, and demonstrating tangible financial benefits. Information Technology is an investment with a significant rate of return if done properly. If it's an expense, you're not doing it right.
