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Software ROI Dilemma? Common ROI factor?

The returns on investment for purchasing new software system can pose a dilemma for companies as software costs money. It’s monetary returns may not be visible for some business but by measuring in quantitative factors, its benefit could be measured.

A simple method is the common ROI factor:

ROI % = (Gains - Cost of Software Investment) / Cost of Software Investment.

Gains is the potential returns in savings or revenue from the implementation of new software system. 

- Assuming an online E-Shop, gains would be the potential increase in sales.

- In Payroll Software System, gains would be the potential decrease in costs & time due to increase in data accuracy.

By measuring, one will be able to compare the merits & decide the best route forward.