Calculating the ROI of a Website Project
The question is often asked of the CivicPlus staff, "How do I show the return on investment of my website redevelopment project when a website isn't a physical product that someone can hold in their hands?"
The answer to this question is two-fold ... with one part being hard numbers and one part being more, shall we say, obscure. But both can help reveal answers that help further explain the value and importance of a local government website.
Part I - The Dollars
In the end, we want to see the dollars, right? Governments are using taxpayer money to fund everything, so showing a return on any investment often is and should be at the forefront of a government employee or elected official's mind.
Take the case of Stafford County, Va., a county of roughly 130,000 residents about 40 miles southwest of Washington, D.C. When the county began the process of looking into redeveloping its website, return on investment and cost savings jumped to the top of the list of decision points.
"One of the things we pride ourselves on in Stafford is being responsible and accountable with taxpayers’ money," says Cathy Vollbrecht, Director of Communications for the county. "We wanted to make sure that whatever action we took with the website would give our community and our government the most value for the money."
Cathy and Stafford County are not unique in this sense. It's cliche, but it's all about getting the biggest bang for the buck.
So with that in mind, let's look at a typical in-house website installation vs. a CivicPlus project.
In the traditional example, you first have the service aspect of the project: the design, the development of getting the site up and running, the time spent managing the project, the creation and development of content on the site, the training on the system itself, and ultimately, the installation of the project.
Whether this is done by in-house staff or outsourced to a vendor, there is a cost involved. Cost for any in-house staff development can be easily calculated based on hours spent on the project and money spent purchasing hardware and software (among other investments), while hiring a vendor is obviously going to have a price tag associated with it.
Then you have the ongoing costs: hardware upkeep, hosting and maintenance. Again, hardware and hosting are easily calculated, while maintenance (upgrades to hardware, disaster recovery methods and backups, archiving data, software updates, etc.) typically is based on hours spent.
What is slightly more difficult to determine are support costs and the productivity dollars lost as staff - whether its I.T., communications, or whomever the tasks fall to - become charged with troubleshooting the system as issues arise (and they will arise), pulling staff away from their intended job duties and focusing them on fixing the website.
Essentially you've got two costs here: time spent on support, and time lost. An hourly rate can be attributed to these, and a cost can be determined.
In going back to our Stafford County example, Vollbrecht says the cost of simply keeping up with technology is a point that cannot be overlooked.
"We knew we had an outdated website," Vollbrecht says. "As technology advanced, we realized we needed to keep up with it. We have a very tech savvy community in Stafford -- a large military population near Quantico, defense contractors, federal government employees and others who telecommute. They’re used to doing business online. As a local government, we needed to give them that virtual office for interacting with us, but with a more personal touch."
The point here is that no matter what, there will ALWAYS be an ongoing cost for a website project. A website's costs don't end when the site launches, and it is incredibly important to track time and money spent on hardware and software upgrades, maintenance, support, and staff time spent, as these costs can fluctuate wildly if ignored.
The CivicPlus - or, said another way, the Software as a Service (SaaS) approach - is to remove the burden of the unknown when it comes to hardware, hosting, maintenance, and staff-time costs from the equation.
The SaaS approach boils it down to two numbers: the development cost and the ongoing subscription cost.
Because a SaaS company like CivicPlus already has the hardware and hosting infrastructure in place, the development and up-front costs of the implementation can be better used in the service aspect of building the new site: better design, more content development, best-practice consultation, training, etc.
Infrastructure costs become nonexistent.
Then, with the ongoing cost, it's simple. Take hosting, take software upgrades, take maintenance of the system and servers, take support ... bundle that all together ... press it down to size ... and out comes one single number.
One number that entails all the ongoing costs, and gives you a single, predictable and stable figure with which to budget around. One number that removes the volatility of unplanned - and unbudgeted - costs in a traditional software implementation.
To be fair, there will be staff time involved in maintaining and adding to the information on the website, but that will be the case no matter which option a government organization chooses, and again, cost savings are about removing the extra time, not the necessary time, spent on website management.
"You don’t need to know HTML to update our new website," Vollbrecht says. "In just a few minutes of going through the process, anyone can learn how to update it … and can do it from anywhere with an Internet connection and a computer, mobile device or iPad. We have thousands of pages to keep fresh. This translates into a valuable return on investment in terms of time savings and enhanced community service."
Part II - The Soft Costs
There is another question that cannot be ignored when calculating the ROI of a website project, and that is: What is it worth to you to have a website and communications strategy that is scalable, flexible, and easily managed as a foundation for interacting with the public?
Is that worth something to you? It was certainly worth it to Stafford County.
"We have a large commuter population," Vollbrecht said. "The website and mobile applications we offer make it easy for people to pick up their phone or go online and see what’s happening in Stafford County. If they can’t come to the actual event, they can see it online. We’ve had a lot of visitors go to the video section of our new site ... There are so many things to appreciate about our website that CivicPlus developed."
Scalability and the knowledge that your website can grow immediately as your needs grow, shift or change...putting a monetary value on that is hard, but that does not diminish the importance of it.
You must ask: Is there value in being able to quickly and easily adjust to technology trends and changes, to increase citizen engagement and interaction with their government, to provide ever-growing online services that meet citizens where they're most comfortable?
If the answer to any of these questions is yes, the ROI question becomes far less daunting.