When it comes to selecting a technology vendor for your organization, there are many things that you consider. First and foremost, you are likely considering the features, technical specifications and how they will fit within your needs. Beyond that, you might consider the implementation process and resources, maintenance costs, security features and the degree of user-friendliness for your users. All of these things are important, but there is something more that is missing from the picture.
While cost is certainly central to the conversation in terms of “can we afford this?” and “is there a budget?,” value is another story. You need to prove the benefits that will be gained from the investment. The Return of Investment (ROI) of your prospective solution could be the single most important evaluation criterion - and most likely, you aren’t even considering it.
Why ROI Should Be Central to the Vendor Selection Process
ROI is the measure that puts the rest of the selection criteria in perspective. Without ROI, it’s hard to tell if the potential solution will pay off for your organization. Furthermore, it is difficult to see whether or not the cost of the solution is “worth it” in terms of establishing ongoing value for your organization. The lowest cost solution might present some initial appeal, but if the ROI falls short compared to other solutions, your firm could still be wasting money on a solution that won’t deliver. Finally, ROI is the bridge that connects your technology solution to your overall goals. It not only justifies the purchase as a budget expenditure but is an active strategic decision toward achieving your stated targets.
So, where should you get started?
Questions to Ask Your Technology Vendor About ROI
When it comes to evaluating a technology vendor, the ROI conversation should be welcome. The vendor should be able to help you establish a clear sense of what the investment will yield in terms of a return. Here are a few questions to ask:
- How much (time, revenue, etc.) can I expect to recover by implementing this technology?
- How much (time, resources, revenue) will be prevented from being lost by your solution?
- What is the projected ROI based on my firm’s current status?
- Can you provide examples of ROI that your customers have experienced after implementing your solution?
- How long will it take for my organization to see an ROI on your technology?
- How many users will need to adopt the solution to break even or experience an ROI?
When it comes to selecting a technology vendor, there are many factors to consider. So many, in fact, that it can be overwhelming! Whatever you do, be sure not to ignore the most important factor: ROI. Asking the right questions will pay off.
One of the key areas where ROI plays an important role for law firms and other professional services organizations is time entry. The vendor that you choose can have a direct impact on time entry performance and how much ROI you are able to generate through the chosen technology.
If you are interested in seeing how timekeeping can contribute or detract from ROI, download our Time Entry Calculator.
How do you factor ROI into your vendor selection process? Share your insights below.