Why 4.5% ROI over three years can be a success

In 1519, the Portuguese explorer Ferdinand Magellan led a crew of around 245 men on five ships from Spain on a voyage around the world in search of spices. Three years later, only Spanish captain Elcano and 17 men returned with one ship. The sale of the spices they returned with generated meager profits – only 4.5% net.

Any business will tell you such a figure for a three-year endeavor is horrific. But look a bit deeper, and you’ll see a lesson we can learn and apply to enterprise in 2020.

I visited an exhibition in Seville called the Longest Voyage, which immortalized Magellan and the Spanish crew that went on that voyage. As a history enthusiast, I was interested in the journey, but also as a professional working in technology, I was intrigued all the more. That’s because there are two ways to look at the Longest Voyage in retrospect. Looking purely at the financials, the journey was indeed a failure. But looking at the broader implications, it was invaluable.

As a result of Magellan’s mission, we were able to discover a previously uncharted route from Spain to the Spice Island in Indonesia across the Pacific Ocean. This was probably the first worldwide communications project in history. And because they didn’t fall off the edge of the world, they also found out that the earth is round. It changed the way Europeans saw the world, yet because of the profitability of the journey in financial terms, this impact was overlooked.

There’s a danger that we could do the same thing today, particularly when we look at collaboration and communications projects. Even when you put the financial performance to one side, the soft intangible benefits derived from better collaboration can make the project a success.

Unified communications and collaboration projects actually carry a high ROI. According to Forrester, the use of Microsoft Teams has an ROI of 832%. But the dollar value of a solution shouldn’t be the only marker that dominates the decision to deploy. As a business, you will have a broad range of people with a diverse range of roles. So, whether it’s a head of communications, head of HR or head of legal – each person will have their own set of elements that they value most. Many of these won’t have much to do with financials, but they do help the business to perform at an optimum level.

Broader view

For example, if you head up HR, rather than looking squarely at ROI, you might be more interested to know that collaboration tools improve worker satisfaction, which reduces attrition rates. When your people can collaborate more effectively, they are more likely to stay with the company. Or maybe your main beat is sustainability, and it is a major concern for your entire business, not just the sustainability manager. If you can cut down on the need for international travel through collaboration tools, the world suddenly becomes a lot smaller, and large amounts of carbon emissions are saved.

ROI is important for any business, but when it comes to implementing collaboration services, it’s important that the company doesn’t have a myopic view of the benefits. Companies should seek buy-in from all parts of the business to see what a productive and efficient workforce looks like. Even if there aren’t direct financial benefits, you’ll often see indirect financial benefits from a team that collaborates well. They make decisions faster, they are more innovative and they make better use of the expertise of their global teams and specialists.

Big picture trumps small-scale thinking when it comes to collaboration. Firms who leave a legacy, just like Magellan, focus on how their actions today affect future innovation, not just present profitability. 4.5% ROI might seem small, but if there are other valuable insights and benefits to gain, they should not be overlooked.

Javier Sanz-Blasco

Javier holds an MBA at Henley Business School (UK) and has more than 20 years’ experience in Unified Communications. He currently works as Sales Executive at Orange, where he maps the business requirements of the biggest multinationals to a service. An avid reader and former chess player, he enjoys hiking with his family the mountains of Picos de Europa in Spain and long distance running along the Thames River.