Your Software Can Perform Better or How to Maximize the Business Value of Software?
In this Article:
1.3 Cost reduction
2.2 Listen your team
2.4 Flexibility
4. Summary
Business-oriented software development with clearly defined ultimate goals can bring significant value to your company. Software can emerge as your primary asset if you consider selling products, upgrading them, or seeking new growth opportunities. Let’s find out how software can be useful, how to select the right option, and make the most out of it.
The key metrics and objectives to define the business value of a software
Return on investment
Calculating the financial return generated by software investments is crucial. For instance, if you invested in custom development, you can compare the costs associated with production, implementation, and maintenance with the resulting benefits. These may include increased revenue from improved sales processes, cost savings from streamlined operations, or enhanced productivity, leading to greater output.
Key performance indicators
Identifying the right KPIs depends on your business objectives. If you work on an e-commerce platform, conversion rates, average order value, and customer lifetime value are essential. You can measure the impact on your business's overall performance by implementing software solutions to improve metrics, such as a personalized recommendation engine or a robust customer relationship management (CRM) system.
Cost reduction
The software can significantly contribute to cost reduction. By automating repetitive tasks, optimizing inventory management, or enhancing supply chain visibility, organizations can experience notable savings. Business owners can use an enterprise resource planning (ERP) system to streamline various processes, reduce manual effort, minimize errors, and lower operational costs.
Customer acquisition and retention
The ability of software to attract and retain customers directly impacts business growth. By leveraging customer relationship management (CRM) software, you can track and analyze customer interactions, personalize marketing campaigns, and optimize client support processes.
Long-term strategic alignment
The software’s alignment with long-term strategic goals ensures its value over time. Assess whether the software supports your business’s growth objectives, expands market reach, enables innovation, or opens additional revenue streams. As an illustration, implementing data analytics software can empower data-driven decision-making, leading to strategic advantages and fostering innovation.
How to select the right software solution?
Selecting the right software solution begins with meticulously evaluating the available options. While this may seem straightforward, it is unfortunate that many businesses overlook its importance. Research indicates that a staggering 70% of digital transformations fail to achieve their intended objectives.
Define business requirements
Begin by establishing clear criteria and understanding your specific requirements. Take the time to determine the objectives the software solution needs to achieve, identify the pain points it should address, and quantify the anticipated value in terms of time, money, or organizational benefits.
Listen your team
Involving your team early in the process can be highly beneficial. Specialists possess firsthand experience with the current software system, understand its shortcomings, and encounter the problem daily or weekly.
Scalability from the very beginning
Assess the software’s ability to accommodate your organization’s growth and changing needs over time. Determine whether the software can handle increased data volumes, user load, and transaction levels without compromising performance or functionality. Look for solutions that offer scalability features such as modular architecture, cloud-based infrastructure, or the ability to add or remove users easily.
Flexibility
Evaluate the software’s flexibility in adapting to your business processes and requirements. Consider whether it offers customization options or configurable workflows that can be tailored to your organization’s needs. Learn how well the software you want to develop or purchase can integrate with other systems and applications within your technology ecosystem. Consider the availability of pre-built integrations, APIs, or connectors that allow for seamless data exchange and interoperability.
High ROI and lower TCO
Evaluate the initial expenses, including development costs, software licenses, implementation or setup fees, and hardware or infrastructure upgrades. Consider recurring expenses such as maintenance and support fees, data storage, and additional licensing or subscription fees. Estimate the potential costs involved in customizing the software to fit your specific needs and integrating it with existing systems. Identify potential areas of cost savings through increased efficiency, reduced manual effort, or elimination of redundant systems or processes.
Software monetization examples
Software monetization involves deriving revenue from the value of your intellectual property by implementing the right strategy. It includes targeting the right clients, incorporating desired features, and employing a practical pricing approach, leading to business growth and profitability. If you want to expand your audiences and revenue streams - it’s the right way to follow, since business giants like SAP, Bosch and Amazon have already used this approach to maximize the value of software developed.
Shopify is an e-commerce platform allowing businesses to set up and manage online stores. They monetize their software by offering various subscription plans to merchants. These plans provide different functionality, features, and support levels, allowing businesses to scale their operations and customize their online stores. The company also generates additional revenue through transaction fees for sales made on its platform.
QuickBooks is an accounting software designed for small businesses and self-employed individuals. Intuit, the company behind QuickBooks, monetizes the software through a subscription-based model. They offer unique plans tailored to the specific needs of businesses, such as invoicing, expense tracking, payroll management, and more. QuickBooks generates revenue by charging an annual fee for access to these features and services.
Summary
To get the most out of your software, you should try hard during the discovery and implementation stages. By defining key metrics and objectives, businesses can measure and enhance the value derived from software solutions.
Furthermore, software monetization examples demonstrate effective strategies for deriving revenue from offerings. Stimulating a culture of innovation and adaptation and prioritizing employee training is essential for maximizing the business value of software.
Have a project in mind? Share it with the XME.digital team to get the best-fit starting point for your software development journey.