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How to calculate the real cost of system integration investment

The objective of creating system integrations is to create more productive services, which in turn provide greater customer outcomes. It’s a simple combination, but the tools and methods of getting it right are swimming in an ocean of complexity. (Download a free tool for calculating total cost of integration ownership at the end of the page)

 Business service and system integrations, such as connecting up your finance systems to HR tools, or marketing software to your CRM are all achievable goals. But how do you go about proving the value that really creates? The traditional metrics we gather for each service or function cannot in isolation demonstrate ROI. We need a more curated approach to understanding success.

Common metrics that don’t help

IT measure ticket resolutions, outages and SLA’s. Finance measures outgoings, expenses and credit. Marketing measure cost per acquisition, click rates, and traffic… all the metrics tell a certain story. But you need to learn to scale-up these metrics if you want to see how they contribute to the success of integrated business software.

In the SIAM (Service Integration and Management) model, we tend to rely on a single platform to provide metrics and reports. However, when you look at integration at a broader level across multiple business functions, you need to do something more intelligent and thoughtful. Combining and curating metrics that help populate the story you need to tell is key.

Let’s say, you create a set of integrations which allow support tickets to pass freely between an IT support system, software development platform and a customer service tool. How do you find a common metric between them all to measure that success?

First, we look at the end-goal. We want to increase the efficiency around how requests to IT for improvements to our customer app, get built and delivered to customers. So, how do we measure that?

Each system has unique metrics. We track the submission of requests in one system, the completion of new features in another and then the result that has on customer issues in another. When we curate the collection and measurement of these metrics, we begin to understand the overall customer outcomes our integrations contribute to.

What is the customer outcome you are working towards?

Picking the appropriate metrics, depends on the outcome you are working towards and that has to be based on the unique value your business is aiming to create for its customers. In the example above, we have an app for our customers and we want the development of that app, to reflect the demands our core customers have.

What is your business’ version of the same story?

When you can talk about the customer outcome clearly and confidently, you can then start building your integration ecosystem and means of measurement backwards from there.

A great customer outcome is something that increases their value to you as a brand, as well the value you can create for them. So, asking pertinent questions such as ‘Will this increase the lifetime revenue of a customer’ or ‘Will this create a more loyal customer’ are great places to start.

 Once you see how that works, you look for the touch points around the software and service ecosystem and see where the strongest opportunities are to invest in integrations. Taking this approach ensures that the investments you make into business integrations all work towards a common goal. It will also support you in prioritising your integrations to create the best possible efficiency and productivity.  

Integrations should enable productivity  

The method used to attribute the success of integration to the customer outcomes you create, comes from monitoring specific areas of productivity in your ecosystem. If passing customer support data from one team to another, is a key component of the integration, look for markers in that process which you can take measurement from.

It might be as simple as seeing how many data transactions were made in a given period, or how quickly they were worked on in one system after being created in another. The important thing is that your metric demonstrates movement. This is because productivity in these complex integration ecosystems all comes down to seeing software, process and people working together quicker, smarter and more collaboratively. And that any static behaviour in the system is a sign of waste!

 In practical terms, this looks like measuring the time between support ticket escalations and resolutions, rather than just the total number of tickets. You wouldn’t for example; measure your productivity on how many emails you get, but instead on how many you were able to reply to in a given time frame.

Productivity + customer outcome = ROI

The real magic trick in all this, is to be able to form a working relationship between how you measure productivity within your integrations, to the customer outcomes they create. As the integration itself and the act of making it ‘productive’ is where your investment is going.

The outcome is the value that has created. When you can collect enough data and metrics on how that is working, then step back to look at the big picture… this is when you really started to understand ROI.

Correlating the data, so that you can see where you have seen dips or spikes in productivity, then seeing how long it takes for that change in productivity to have an impact on the outcome, is really what you are looking for here. When you find the signs of the activity and impact happening in tandem, this is how you can now take your evidence of ROI to the rest of businesses.

If you are struggling to see any correlation, it maybe because you are measuring the wrong things and you need to review your metrics (this applies equally to negative results as it does to positive ones!).

Lowering the cost of system integration

Using the right system integration tools, understanding integration project phases and resourcing and finally getting all your systems well connected is key. A reliable and centralised integration automation platform enables you to connect up software quickly, with very little cost and provides complete flexibility over bring new data points, tools and processes into your integration setup.

Try our Total Cost or Ownership calculator to understand system integration project costs and calculate ROI for you integrations. (no registration needed)



If you'd like to learn more about leveraging this kind of value and ROI in your organisation, get in touch with our expert team of integration specialists today, who will be very happy to discuss your ideas, goals and challenges around service or system integration. Book a 15 minute assessment here

Already have a system integration strategy aligned with business strategy? If not, read this first: How to create an integration strategy that REALLY works?