Any investment in the business is aimed to bring in productivity and profitability. Some investments can help your business reap financially, and others may increase the productivity of your business which means profits remain unchanged; however lesser time and effort are required to bring in the same amount of profits. Information technology returns on investment are of two types, financial and non-financial returns, thus IT empowers both productivity and profitability. You can get more information about New Venture Competition and Technology Management at UCSB online.
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Financial ROI refers to information technology that helps in increasing revenue and/or decreasing costs, sometimes information technology can help a business totally avoid initial costs. For an instance, if manually sending faxes requires dedicated personnel, automating fax machines using information technology would not require manual involvement, thus the cost to hire fax personnel can be cut completely.
Non-financial ROI refers to productivity aspects of information technology. Some examples of non-financial gains are better customer service and satisfaction with the use of the latest information technology, enhanced decision making with the usage of analytics software, ability to spread the organization globally, advanced internal business and external communication over the network, increased reach to market and thus better sales.
Both financial and non-financial gains are coupled with some risk factors, even though most information technology solutions for businesses are aimed at increasing benefits. Information Technology at the basic level is controlled by the assigned authorities and to a major extent, the correct usage of a system will allow a business to prosper with the help of implemented IT solutions.