The Flawed Concept of ROI in Technology Purchasing

April 26, 2021
Tarry Schabel

The High Cost of Doing Nothing in the Modern World

We’ve all heard about, seen or even used the concept of return on investment (ROI) when it comes to purchasing something for our business or selling something to another.

Bottomline:  Does the cost justify the future gain? What is the net value? And while this is a good starting point for most purchasing considerations, the concept by itself is a bit flawed, particularly regarding technology and software in today’s world.

Modern companies must take other factors into account when looking at new technologies for their business. Those factors center around three areas: Security, Customer/Employee Sophistication, Next Gen Development.



Security, as it relates to technology, seems like an obvious consideration. But we have all decided to buy the cheaper phone case, or even worse, skipped the phone case altogether, only to have big regrets later while we stare at a cracked phone screen. While this analogy is over-simplistic, it applies to business technology as well.

Cyber attacks and ransom attacks have become more and more common over the last couple of decades. According to CNBC, only 14% of small businesses are equipped to deal with cyber attacks. These cyber attacks cost all businesses, regardless of size, an average of $200,000 (CNBC, 2019,

And increasing security does not just mean protection from bad guys, as we unfortunately have learned in the past year. Because of Covid-19, businesses are changing their business plans (Spiceworks Ziff Davis, 2020)

  • 44% are increasing the pace of their digital transformation
  • 33% are tightening their security and risk and governance management
  • 30% are developing additional training resources for remote workers
  • 36% are working on improving their IT operations and systems performance
  • 32% are planning to connect with employees through standardized, secure and intuitive tools
  • 27% are polishing their current disaster recovery setup

All of this is due to something we likely had never heard of at the start of 2020 — How has your company changed in the last year due to Covid? Was your technology ready?


Customer/Employee Sophistication

Another area that is often overlooked when a company strictly focuses on ROI for a technology purchase is customer and employee sophistication and its rapid growth and change. In other words, they don’t consider the customers OR employees that they could disenfranchise or even LOSE if they don’t keep up.

For example, Millennials are twice as likely to want to use more visual communication methods at work compared to baby boomers. More than 64% say they understand information faster when it’s communicated visually, vs. just 7% who don’t ( With the majority of baby boomers on the cusp of retirement, and a new wave of millennials and Gen Z-ers set to join the workforce in the coming years, this is an indication of changes that likely lie ahead, Upwork’s CEO Stephane Kasriel told CNBC Make It.

“As younger generations ascend in the workforce and become the majority of managers in corporate America, they’ll reshape work as we know it,” said Kasriel. “Millennials and Gen Z currently account for slightly over a third of the workforce (38%). In the next decade, that figure is set to shoot up to 58%, making the youthful generations the most dominant in the workplace. With that will come a greater number of them in managerial positions, too. Already today, 48 percent of younger generation managers are director level or higher.” (

This shift in the workforce will change things as simple as everyday communication, as indicated above, or as complicated as our world’s infrastructure with the expansion of IoT, or the internet of things. IoT is a system of interconnected computing devices in a single network.  It makes it possible to create smart cities, homes, connected cars, utilities, and wearable gadgets. IoT is expected to dominate a lot of aspects of our day-to-day life in the very near future. There were 26.66 billion IoT devices in 2019. It is expected that number will surpass 75 billion by 2025 (Forbes).

Our employees and customers will expect us to be fluent in IoT and we don’t even know what will be available in five years.  So, our technology purchases need to focus on agility.


Next Gen Development

Is your business ready for this change? Is your technology stack ready?

Which leads us to the next factor to consider — Next Gen Development. One of the first things we discuss when we engage with a new potential client is very simply, “Why are we talking? What is missing in your current system and do we have a solution?” We have all heard the stock sales questions. “What keeps you up at night?” Or, “If you could change anything about your business, what would it be?” But what if you sleep fine?  What if your business is humming along? What if you wouldn’t change anything? As we have learned in the past year, things can change on a dime.

Prior to 2020, a lot of businesses had no need to be mobile. It wasn’t even a thought. Things were fine as they were…until they weren’t. And then they faced two problems. They needed to adjust to remote employees, but their technology stack didn’t allow it. So, they had to upgrade technology and then adjust their business, and they had to do it very quickly.

For me, 2020 was an enlightening one. Most companies operate by the adage, “if it isn’t broken, don’t fix it.”  But I learned very quickly that in today’s world, that might not be good enough. Just because it isn’t broken today, doesn’t mean it won’t be tomorrow. And even if it doesn’t break, can it keep up with today’s world?

We are finding that nimble companies are upgrading to next gen solutions for this very reason, even though their current solution works fine. New development and new technology advancement take place in next gen platforms. They understand that working fine today might not lead to a smooth segue to technology tomorrow. And if that segue must happen quickly, they simply can’t afford the downtime.


Is your legacy platform ready for the future?

The Cost of Doing Nothing

And that brings us to a phrase I have used for a while, and I am not even sure where I found it. I read it somewhere and really liked the way it applied in sales. So, apologies to whoever coined the phrase “the cost of doing nothing.” But with most business sales/purchases that I have been a part of in the past decade or so, along with ROI, every company must understand the ramifications and costs incurred when no action is taken.

Admittedly, it may be difficult to quantify the cost of doing nothing. However, understanding the cost of inaction and its overall business impact should be a part of every business strategy discussion and every buying decision, particularly as it relates to technology.