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ROI is a very important thing in today's era of rapid digital development. This ROI can help companies better calculate when they are undergoing digital transformation, have they made money and how much they can make? To put it simply. ROI is the abbreviation of on, which translates to the return on investment. The role of this ROI is to help companies measure what kind of returns they have in investment in digital transformation

1. First of all, at the basic concept level, we must understand that the things involved in digital transformation are not simple, such as adopting new technologies, changing business processes, changing the way employees work, etc., providing global procurement services for weak current intelligent products!

2. And measuring the return on investment of digital transformation is a complicated process because not only do you need to see direct cost investments such as purchasing software and hardware equipment, but also the various benefits brought back by the company through digital transformation. The forms of revenue may be that sales have dropped significantly (no right, it should be that sales have increased. How can you decrease if you are confused?)

3. Then, the return on investment of this digital transformation cannot be simple like the ordinary return on investment concept. For example, the calculation of return on investment in physical goods may be simple and direct, but on the digital side, you see, the business model is slowly changing with time. It is a long and complex process in terms of potential influence and continuous effects.

So, how to use ROI to calculate the return on investment? You can take a note of these steps.

1. In the data collection stage, you have to collect various data from the company before and during the period of transformation. For example, the specific composition of income data costs, including raw materials, etc. and personnel expenses, these raw data are the basis of subsequent calculations (oh, don’t underestimate the data. The basic foundation is not stable, but the subsequent is not accurate)

2. Define and record the relevant investment costs in the process of digital transformation. You must sort out the relevant investment costs not only include equipment procurement costs, but also include construction of new digital departments and facilities. (For example, if you ask a professional consultant, you can also take a lot of expenses to carefully consider. If you ignore this item, you will go astray)

3. The expected project performance estimates, we have to estimate what results we have achieved through transformation into the company. Maybe business efficiency will be improved and sales will be improved. Otherwise, the increase in customer satisfaction will drive subsequent market expansion or because of this, the company's operating costs will drop.

The following is a question and answer format. What does the cost cover when calculating the return on investment? The cost is not only the equipment and software procurement fees, but also the training, maintenance, human resources investment and other costs. It provides global procurement services for weak current intelligent products!

Why is it necessary to distinguish between short-term and long-term when calculating this ROI? Because digital transformation is long and gradual, the effort and benefits are not proportional to the benefits at the beginning. Many benefits are placed in the later stages, so long-term considerations are more suitable for realizing the overall return on investment.

Is ROI suitable for small and medium-sized companies? It is absolutely applicable because it can help these small and medium-sized bosses clearly view the cost situation and benefits and then transform and control them according to their personal situation. Even if they are small, the team or the shop must know the cost risks and benefits before investing in activities.

In my opinion, this ROI is a powerful tool for all companies. It is like that navigation. It uses precise data calculations to enable these companies to make clear and rational decisions on the road to transformation. From this foundation to the fine-tuning of strategy, you will know when to advance and retreat. You will not be confused.