Use These 3 Simple Steps To Calculate Your Technology ROI

Matt Mullenweg knows a thing or two about technology. And people. And how the two can help your firm grow its bottom line.

While he may not be a household name, you’ve likely used some of the innovations Matt helped create. For example, he was the founding developer of WordPress, whose software powers nearly one-third of the millions of websites on the internet. He went on to found Automatic, a company that’s currently a driving force in changing the way we work each day.

“Technology is best when it brings people together,” Matt says.

Which brings us to your financial advisory firm.

So, you’ve decided to invest in new technology to step up your game. That’s good. But it’s not enough. There’s more to it than that. You must also learn how to apply that technology properly to help you improve your client relationships. Developing a Return On Investment (ROI) strategy is the first step in that process.

We have a limited number of hours in each day. How we use that time goes a long way in determining our success. Would you believe up to 40 percent of your day is spent on mundane tasks, things like rushing from one meeting to the next, slogging through seemingly endless emails, and wading through mountains of reports and data? All that busywork is robbing us of an essential duty we should be performing: taking time to explain to our clients what all this financial information means to their unique situation.

To make that happen, we need to take the following steps.

Establish a baseline – Take a quick inventory of how much time you’re currently spending per task for each client. The numbers will probably surprise you. Because while 15 minutes here replying to an email or 90 minutes for a meeting there doesn’t seem like a lot, when you add it all up, the final figure is remarkably high. With the inventory, you can identify just how much time is being spent on which specific tasks. Once you have that information, you can create a baseline necessary for gauging your technology ROI.

Use technology to cut time – Now you’re ready to take the next step: Determining precisely how to best use technology to your advantage. You will then be able to identify targets of opportunity for integrating technology to speed up the process (for instance, using Docusign to obtain E-signatures) and thus save you that most scarce of resources, time.

Calculate the Value – Pull out the calculator and first add up the amount of time you have saved with technology. Remember, if you can shave off just three minutes from a routine task that you perform 200 times annually, you will have saved 600 minutes over the course of a year. That’s five hours! Now, multiply your hourly rate by the number of hours saved each year per team member. That’s how you determine the ROI on your technology investment.  

But there’s a benefit beyond the financial advantages of technology. Because not only does time freed up from being wasted on busywork increase your bottom line, it also provides additional time for you to give personalized attention to each client. How often do you find yourself thinking, “I wish I could do a better job of explaining this to my clients by going into greater detail, but I’ve just got too many other things to do.”

As I have shared in this blog so many times before, no service we provide is more than important than actually listening to our clients’ questions and concerns and then making sure that each one is thoroughly answered and addressed. The additional time created by the thoughtful, applied use of technology can make that possible. Not every once and a while, but on a regular basis.

Remember Matt Mullenweg’s observation? “Technology is best when it brings people together.” Determining the ROI on your firm’s technology creates a mechanism that allows you to do just that—with great frequency, too. And everybody wins then.