Calculating ActivityInfo’s ROI for your organization

Return on Investment –usually written as ROI– is a useful metric that can help you quantify the value you are getting from an investment you make. ROI works as a good indicator to help your organization gauge if it is benefiting from selecting a specific solution and it is particularly helpful when the solution is software.

ROI is also useful when you are trying to decide whether to develop software from scratch or an off-the-shelf solution or go for an on-premise tool versus Software as a Service (SaaS) as it will give you the data to drive decision making and get buy-in from other stakeholders.

The nature of the social sector allows us to look at this concept from an additional perspective. For organizations that are committed to evidence-based processes and decision-making, using software to improve M&E and information management doesn’t necessarily aim at a financial return on investment. Instead, it makes sense to look at the value of the return in terms of impact. For example, thanks to improved processes resulting from the use of software, you might be achieving better health outcomes or reaching people you couldn’t reach before.

There are some important points to consider regarding ROI:

• You need to have a good understanding of all of the costs related to adopting a software solution.
• You need to be able to quantify the value you can get from the solution (benefits).
• For both the costs and the benefits you need to think of specific KPIs or indicators that will help you work with concrete numbers.
• ROI usually increases as time passes. This is because there are one time costs that usually occur once and at the beginning of the implementation. For a bigger picture, try to calculate the ROI for a longer period of time (e.g. 3-5 years). Make sure to include additional external and internal factors that might affect the future of the solution (e.g. use expansion to more projects, less training needs, etc.)
• You can consider ROI from two different perspectives: hard ROI (financial returns, measured for example in Dollars or Euros) and soft ROI (showcasing qualitative value, e.g. improved productivity or reputation, higher colleagues satisfaction leading to lower turnover, etc.). Soft ROI is equally important and can support your arguments when talking about the hard ROI.

The formula for estimating the ROI of a software solution is:

Software Return on Investment = (Value - Costs)/Costs

In this article, we will help you think about your organization’s needs so as to put together the numbers for this formula.

Do you wish to discuss in detail how ActivityInfo can support your organization? Never hesitate to contact us!

ROI: Cost of investment

Initially, you need to collect information about the total costs that come with selecting ActivityInfo. Things to consider:

• Annual subscription: This is the annual cost for accessing the software. We offer various options to match different team structures or organization-wide implementations. Customer support is included in the annual subscription. To fill in this number, take a look at our pricing page or use the calculator in the quote generator to estimate the complete cost.
• Onboarding and Training: This is an optional cost that can occur in the beginning of your implementation or on-demand when you need it. We offer different types of implementation packages to meet your needs. Consult our onboarding page for the cost or contact us for more information. If you wish to avoid this cost, we offer a wide variety of resources including extensive documentation with articles and videos, webinar recordings and live webinars and database templates to help you get started fast and at no additional cost.
• ActivityInfo Lead Person: We advise that your team has one or more colleagues who dedicate some time to get acquainted with the software and then remains responsible for coordinating its adoption and implementation. This is not necessarily a new cost for your organization since you can reassign the responsibility to an existing colleague or team of colleagues. We recommend assigning this to at least one M&E or Information Management professional or a combination of the two.

Calculating costs formula:

First year costs = Annual subscription + Onboarding and Training (optional) + dedicated ActivityInfo Lead (optional)

Subsequent years = Annual subscription + dedicated ActivityInfo Lead (optional) + cost of usage increase (optional) + additional training or onboarding (optional) - apply this formula for each year separately

Because ActivityInfo is an off-the-shelf SaaS solution, there are no other costs associated with developing the software, maintaining the software or servers or applying adjustments, everything is included in the cost of the subscription. As a result, the cost of ownership is lower than that of custom development where you would need to consider the cost of upgrades and maintenance.

If you are already using an existing information management system a factor you should take into consideration is the resources needed for data migration. Think of it in terms of time and people needed for planning and implementing the process.

ROI: Value of investment

To put together these numbers, you need to list the aspects of your work that will be impacted positively from the adoption of the software and assign a financial value to them. You might need to involve colleagues from other departments to help you estimate some of the numbers (e.g. the estimated value of the savings that can be achieved in diverse areas).

Consider how much time is saved thanks to the solution or the opposite aspect; how your organization’s growth, productivity or other costs would be influenced in the future due to the lack of such a solution.

Then, list the factors that account for the success of your organization and map them to the value that the solution brings.Depending on the structure of your organization, you could do that per department or project team that would be using the solution (e.g. field office, regional office, HQ or M&E department, planning department, project management department, etc.)

Here is a list of processes that could help get you started with the estimation of their associated financial value. If you find it hard to quantify the value you can get out of them, you can summarize each group of benefits to a single strategic value and assign a financial value to that.

Return on time saved: Staff cost

A quick way to get some hard numbers is by looking at the current situation of your M&E/Information management processes.

Key questions to ask are:

• How many people are currently involved?
• How much time is spent for monthly/quarterly reporting or for managing the whole information management process?
• What is the cost for the organization for managing the information management process? (From data collection to data analysis and reporting, think of the salaries involved, the time spent on the processes, etc.)
• How much time would be saved in the Information management process if it happened in real-time on a web based platform? (this is particularly useful if you use spreadsheets of fragmented systems to manage the process)

To get the total savings you could achieve, multiply the average employee salary with the number of employees involved in the process with the percentage of estimated time saved with the amount of years you are planning for.

You can then move on and look at each of the following benefits to get some more inspiration as to what you could add in the Value of Investment part.

Productivity

• Centralized information system in place of scattered systems: instead of siloed or data scattered in multiple systems such as spreadsheets and databases, you can have all data gathered in one place, making collaboration, data management and data analysis simpler and faster across one or multiple teams or projects.
• Standardization of data collection process: Instead of using multiple different data collection tools, and having to maintain guidelines or trainings for all of them, you can use the mobile app of ActivityInfo which is integrated to the software and makes the need to move data around redundant.
• Streamlined reporting: Instead of exchanging spreadsheets and emails or moving data from mobile app tools to other systems you can perform data entry in ActivityInfo using the platform’s interface or the data collection mobile app which is integrated with the platform, and view or analyze data the moment they are entered.
• Working from remote areas: Facilitate data collection in remote locations with no internet connectivity, making the life of field officers and beneficiaries easier. ActivityInfo allows for offline data collection both on mobile devices and desktop.
• Faster delivery of results: Allow all stakeholders to collaborate on the same platform, reduce time needed to collect, combine, analyze and present data thanks to the relational database model and the built-in analysis tools of the platform.
• Availability of support for questions and issues: Consider the value of having access to support from the ActivityInfo team included in your subscription. This means that issues and questions can be addressed quickly and you can resume your work fast and with confidence.

Example of Strategic benefit:

Organization/Projects growth: If you start managing projects faster, your organization will be able to save time and consider taking on more projects, thus increasing your reach and impact to more beneficiaries or regions.

Learning and decision making

• Improved data quality and accuracy: Keep data in one system that can impose data quality rules to ensure you avoid collecting redundant or duplicate data or data that don’t fulfill your data quality requirements.
• Better understanding of impact: Combine data from different departments, projects or even organizations and improve learning and your understanding of the impact of your work. Aggregate indicators from project to global level and evaluate the impact of your activities at any level of your results framework. Involve any stakeholder and inspire data-driven decision making.
• Cross-project learning: Combine data of different projects easily thanks to the relational database model and get insights that can help your project teams and the HQ improve programme delivery.

Example of Strategic benefit:

A data driven, learning-based culture: With good quality data and access to valuable insights you can improve the overall performance and impact of your organization while your colleagues have the tools to learn, showcase impact and do more with less.

Compliance and Donors relations

• Improved compliance with donor requirements: Increase donor requirements satisfaction with reports that are based on quality and timely data. Improve performance of proposal submissions with an organized approach to M&E.
• Improved performance in audits and evaluations: Keep all essential data in one place, easily accessible whenever needed. Reduce evaluation stress and improve overall confidence across teams.
• Data security risk mitigation: Consider the reputation damage and the cost of the risk of losing data or the impact of a breach due to the use of tools that don’t comply with essential security requirements. In ActivityInfo, data security and privacy plays a central role and we offer features to help you mitigate risks on a daily basis.

Examples of Strategic Benefits:

• New funding opportunities thanks to improved donor engagement: When submitting proposals, you can increase your chances of getting the donors’ attention and funding by presenting a clear, organized M&E plan and a carefully planned information management strategy supported by a tested information management platform such as ActivityInfo.
• Safeguarding reputation: Risks related to data security and data privacy can harm your projects and the overall reputation of your organization. Consider the value you can get out of an informed data risk mitigation strategy in combination with a software that provides you with the means to protect the data.

Operational success

• Reduced time spent on procurement: Streamline the purchasing process by discussing a Global Frame Agreement with us and make it easier for country offices to purchase the software.
• Decrease labor costs through web based collaboration: As your team won’t need to spend time chasing reports, exchanging spreadsheets and cleaning up data, there will be no need for additional hirings and there will be more free time to engage with other valuable activities that can help your organization expand its reach and impact.
• Decrease in turnover: Improved tools and processes increase the satisfaction rate among colleagues and can decrease the chances for them leaving the organization.
• Improved collaboration with other departments: Support other departments access information whenever needed and facilitate internal collaboration (e.g. budgets, projects progress, key learning outcomes, etc.)
• Scalability to more projects: Once you set up ActivityInfo for one project, you can use it as a pilot and easily scale up the use of the platform to more projects, spreading the benefits of streamlined information management across the organization.

Example of Strategic benefit:

Improved internal satisfaction: With a solution such as ActivityInfo, you will be able to have in place updated, quality and timely data and reports for different types of stakeholders. This can improve your organization’s reputation among them.

Conclusion

Now that you have all the ingredients for the formula in place you can calculate the ROI of adopting ActivityInfo for your organization. Typically, in the software industry ROI ranging from 5% to 10% is considered a good return. But don’t forget the unique nature of the social sector and the Return On Impact.

What ROI did you come up to and what did you include in the costs and value?

Do you wish to discuss in detail how ActivityInfo can support your organization? Never hesitate to contact us!