According to the Harvard Business Insider, 95% of tech investments in AI tools fail to deliver their ROI. Not because the technology is bad – but because companies often measure the wrong things.
In times of rapid digitalization and constantly changing markets, technology investments are more than just a cost item for companies. They are strategic levers for growth, efficiency, and competitive advantage. But: Just because you invest doesn’t mean it automatically pays off. Today, decision-makers and executives care about one thing above all: Does an investment pay off – yes or no?
The classic ROI formula only answers part of the question: ROI shows costs versus direct benefits. Another indicator that must also be considered is the Total Economic Impact (TEI): TEI shows the full value, including direct effects, indirect benefits, and opportunity costs. In this article, we show step by step how to measure ROI and TEI, which factors to consider, and how to make the true value of your technology investments visible.
ROI And TEI – A Holistic Perspective
ROI provides insight into financial metrics, while TEI captures the impact on the entire business context. Combining both approaches creates a complete picture of the actual business value of a technology investment.
ROI measures financial benefit:
ROI = (Benefit – Cost) ÷ Cost
Costs: License, implementation, integration, training, maintenance.
Benefit: Revenue growth, cost savings, or qualitative effects such as customer satisfaction and compliance.
TEI expands the perspective:
Direct effects: Revenue, cost reduction, efficiency gains
Indirect effects: Productivity, risk mitigation, scalability
Opportunity costs: What happens if the investment is not made
Making soft factors measurable: Employee satisfaction, innovation speed, time-to-market
Practical example:
A CRM shows 120% ROI – solid on paper. TEI, however, reveals:
40% lower customer churn
3 months faster launch of new services
25% higher employee satisfaction in sales
ROI provides the financial perspective – TEI the full business impact.
Challenges In Determining The Real Value Of Software And Tools
To ensure your tech investments are truly effective, you should be aware of the following challenges when implementing new technologies:
Unclear goals – If it is not defined what exactly should be improved, the outcome is hard to measure.
Incomplete cost calculation – Many underestimate implementation or follow-up costs such as training, customization, and ongoing maintenance.
Weak data foundation – An IBM study shows that 47% of executives consider their existing data insufficient to make informed decisions. Incomplete, outdated, or opaque data can lead to flawed strategic analyses.
Lack of alignment with business goals – A technical upgrade only delivers real value if it not only satisfies internal stakeholders but also contributes to revenue growth, higher efficiency, or other measurable business results.
Underestimating soft factors – “Soft” metrics such as employee adoption, change management, user experience, etc., are often difficult to measure but critical for the ultimate value of a new solution.
Quick Check: Measuring The TEI Of Your Tech Investments In 6 Steps
Define goals & KPIs – Link every investment to clear business objectives.
Analyze costs & benefits – Include all costs (TCO) and quantify both direct and indirect effects.
Calculate financial metrics – ROI, payback period, NPV: Metrics that reflect economic impact.
Track performance – Continuously monitor KPIs and identify optimization opportunities.
Conduct benchmarking – Compare with industry standards and competitors; perform before-and-after analysis.
Collect stakeholder feedback – Gather qualitative insights from employees, customers, and success stories.
Conclusion: ROI Without TEI Is Tunnel View
TEI of technology investments is far more than a single number – the key is to systematically measure, manage, and demonstrate the contribution of the investment to business success. Only those who measure the full economic impact – direct effects, indirect benefits, opportunity costs, and soft factors – can make truly informed decisions, reduce risks, and secure long-term business value.
With the Total Experience approach, we make informed decisions with you based on current and reliable data. We bring together people, expertise, and perspectives that complement each other – across silos, responsibilities, and traditional agency boundaries.
The result: An ecosystem that delivers better user experiences, more efficient processes, and real TEI.
We support you from goal definition through implementation to success measurement – ensuring your investments not only incur costs but also deliver measurable value.
