Before delving into specifics, let’s clarify the concept of ROI:
Return on Investment (ROI) refers to the financial gain or benefit obtained from an investment relative to its cost. In other words, it represents the comparison of what you pay with what you will get over time.
For example, if you are investing in new software, ROI helps you quantify financial returns such as scrap rate reduction, labor cost savings, or production speed increase in relation to the cost of purchasing and implementing the software.
In the context of a SaaS (Solution as a Service) model like StarterPro, ROI involves evaluating both the ongoing subscription expenses and the initial set-up costs. Specifically, it assesses how these costs compare to the financial benefits gained from using the software.
For StarterPro, this means calculating the estimated ROI based on projected savings, efficiencies and other benefits, compared to the subscription and initial costs.
In this article, we focus on estimating ROI before the purchase decision, using expected benefits and savings as criteria for determining if the investment is worthwhile.
In practical terms, ROI is calculated as:
ROI (%)= {(Net Profit from using StarterPro−Total Costs / (Total Costs)} x 100%
Where:
For a SaaS model like StarterPro, the calculation is slightly adjusted to reflect operational expenses rather than one-time costs. The monthly subscription fees are considered part of the ongoing operational costs rather than a capital investment. Here is a more detailed breakdown:
ROI (%) = {(Net Profit from Using StarterPro−(Setup Costs + Total Monthly Subscription Costs))/(Setup Costs + Monthly Subscription Costs)}×100%
Where:
This metric is really important for working out how well investments are doing across different industries, including manufacturing, technology, and services.
Businesses and investors use ROI to see how successful projects, initiatives, or acquisitions are. It shows how well capital is being used and whether the returns are worth the costs.
Calculating ROI is very important for evaluating the potential success of new software system before making a purchase decision. It helps you make informed choices by estimating whether the software will deliver enough benefits to justify the costs. You can do the ROI calculation before a project to decide whether to move forward, or after implementation to assess actual performance.
In this article, we mainly focus on checking the ROI before a new purchase. In this case, the ROI calculation is used as a criterion for making a decision to check whether it is worth it or not.
When ROI is calculated beforehand, it helps on different levels:
By quantifying the financial benefits of a software investment, you can decide whether or not to proceed with software purchase and implementation.
ROI provides a clear, objective measure to justify expenses to stakeholders, ensuring that the subscription fee and any associated costs (e.g. implementation and training) produce sufficient benefits, such as improved efficiency, increased revenue, or cost savings.
In industries such as glass processing, where margins can be tight and price sensitivity is high, every euro counts. Understanding ROI helps assess how capital is used and identify areas for improvement.
For glass processors, investing in StarterPro aims to improve efficiency, cut costs and boost your profits. Here is how you can measure and evaluate the ROI of StarterPro effectively before making a decision:
To measure ROI accurately, start by identifying your specific objectives and KPIs for implementing StarterPro:
Then, define metrics to measure what exact results you hope to achieve:
At this stage, bear in mind that you are calculating an estimated return on investment (ROI) to determine whether it is worth proceeding with the purchase or not.
This estimate will be based on anticipated savings, optimizations and expected results. Once the project has moved from the decision phase to the implementation phase, and sufficient data has been collected, you can then calculate the actual ROI using the same procedure.
When you are thinking about investing in StarterPro, remember to consider both the upfront and ongoing costs. Once you have defined your objectives, KPIs and metrics, the next step is to understand the investment breakdown associated with StarterPro:
Since you are estimating ROI before the actual purchase, focus on projecting potential improvements rather than analyzing real-time data. Estimate the operational gains StarterPro could deliver, such as reduced scrap rate and increased efficiency, and use these projections to inform your decision-making process.
By following these steps, you can estimate the ROI of StarterPro and make a well-informed decision about whether to proceed with the investment.
Once you have collected all the necessary information regarding potential benefits and expected costs, you can proceed to calculations. Use the following formula to calculate the ROI of StarterPro:
Estimated ROI (%) = {(Estimated Net Savings or Gains – Total Estimated Subscription Costs – Initial Setup Costs) / (Total Estimated Subscription Costs + Initial Setup Costs)} × 100%
Suppose:
Total estimated investment = €5,000 (setup) + (€500 × 12) = €5,000 + €6,000 = €11,000
Estimated net savings or gains = €10,000 (scrap rate reduction) + €5,000 (labor efficiency) = €15,000
Estimated ROI (%) = {(€15,000 – €11,000) / €11,000} × 100% = 36.36%
This guide has walked you through the essential steps to estimate the ROI of StarterPro before making a purchase decision. By understanding how this software could impact your glass processing operations, you now have a clearer picture of whether it aligns with your business goals and justifies the investment.
Estimating ROI beforehand is not just about doing the math; it helps you make an informed choice, but also ensures that every euro spent contributes to the growth and efficiency of your business. This approach ensures that you make decisions based on sound financial evidence, leading to better resource allocation and greater profitability.
If you are ready to take the next step or need further assistance in estimating the potential ROI of StarterPro, feel free to reach out to us at sales@synerglass-soft.com. Our team is here to help you evaluate your options and guide you toward a decision that supports your your business needs and objectives.