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What is ROI, anyway?

What is ROI, anyway?

You’ve probably read the word ROI somewhere. But do you really know what it is?

ROI stands for Return on Investment. It represents an indispensable metric for any business, project, new product launch, or any other initiative where capital investments and return expectations are involved.

In a very summarized way, this metric allows us to analyze the viability of a return on capital invested in a certain business or project, which allows us to help decision making. In other words, through its usage, it is possible to verify if the investment is worthwhile and monitor those already made in order to be optimized. Thus, it is crucial that ROI is calculated not only at the beginning of a project but throughout its duration.

Why is ROI so important?

The importance of this KPI can be summarized in the following points:

– Assists the decision-making process of the company or investors in a more rational and numbers-based manner;

– Allows a follow-up of long-term goals and not just immediate results;

– Organizes target plans and set business goals based on realistic results;

– Evaluates how various initiatives (which may include marketing campaigns, new equipment acquisition, hiring new team members…) contribute to achieving results;

– Enhances an increase in returns and profits.

What is the main goal of WFM software?

According to Carla Gomes, Customer Success Manager at SISQUAL, “the main goal is to bring productivity to the company. This productivity is usually measured by the activity the company performs, that is, the return on activity versus the cost of personnel. To increase productivity, the company must increase sales or decrease costs”.

Where does SISQUAL help? How does a WFM software help with variables to use in ROI?

“SISQUAL helps with both. First how the company will achieve better planning, will get a higher return on productivity. The cost of attendance will also decrease. Why will it decrease? Because the company will have a fully automatic process, which is accounted for every minute, every hour, or every factor paid in salary. For example, if an employee does 1h55min of night work, he will only receive those hours, not 2h. In a normal process, the company would pay 2h. This 5min may seem irrelevant, they represent only 2€ or 3€, but these 2€ or 3€ multiplied by 1000 employees in a full year implies a lot of money. This return is easily identifiable”.

When we move from a paper process to a WFM process with the payroll calculated on the basis of hours worked, we have an immediate reduction between 3 – 5 % on the payroll. In other words, if the company pays 1 million euros it will have 300,000 savings per month.

But besides the reduction in payroll, there are still more benefits!

There are also two more volatile variables that are directly related to the employees’ quality of life, the SISQUAL Quality of Life Portal presents a reduction in absenteeism of between 12% and 20%, a very significant reduction in unannounced absenteeism. Employees now have the mobile APP and through the portal, they are able to warn their management much more easily that they will be absent or that they will have commitments that will not let them work on the shifts assigned to them, for example.

Employee participation in the planning of working hours gives greater responsibility to team managers and greater involvement of people in the choices of their schedules, which results in a reduction in staff turnover, which easily reaches between 12 – 20%.

And with these variables in mind, how do you calculate ROI?

To calculate ROI, and taking into account the monthly savings variable of 3%, a minimum rate expected with the strict classification of working times, together with the reduction of overtime and flexibility of working hours that the company can easily achieve with moving to an automated WFM process, these values quickly overlap the investment value of the WFM project.

The range of benefits that SISQUAL WFM has is so wide that the pains it can solve vary from business to business and from industry to industry, so get in touch with one of our experts and we will together discover the ROI potential of a project according to the needs of your company!